Leerink Swann analysts were out today with favorable reports on pharmaceutical giant Gilead Sciences, Inc.(NASDAQ:GILD) and cannabis-based drug maker GW Pharmaceuticals PLC (NASDAQ:GWPH). Let’s take a closer look.
Gilead Sciences, Inc.
Leerink’s Geoff Porges reiterated an Outperform rating on shares of Gilead Sciences, with a price target of $120, after the company disclosed new data on its mythical second generation HIV integrase inhibitor (GS9883) now in phase III trials.
Porges commented, “This information is particularly important to our thesis about the stock, since our 2020 HIV revenue is approximately $7bn (50%) higher than sell side consensus. A key part of our sustained growth thesis through this forecast period is the introduction of the triple combination of GS9883/TAF and emtricitabine, which we expect to be Gilead’s ultimate combination.”
“We currently forecast this regimen launching in 2018, and capturing significant share rapidly (from many of the company’s other combinations as well as competitors), growing to over $4bn in global sales by 2020 (POS adjusted) and $7bn by 2022. Any disappointment with GS9883 (now bictegravir), would materially alter our outlook and thesis, although some of the revenue would certainly be retained near term by other Gilead combinations,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Geoff Porges has a yearly average return of -6.2% and a 9% success rate. Porges has a -5.5% average return when recommending GILD, and is ranked #3511 out of 3977 analysts.
GW Pharmaceuticals PLC
Leerink analyst Paul Matteis reiterated an Outperform rating on shares of GW Pharma, with a price target of $130, after the company said that it has been granted an orphan drug designation for its key treatment epidiolex for the treatment of infantile spasms. The company expects to begin a two-part phase III study in this indication in the fourth quarter of 2016.
Matteis noted, “The announcement of a new indication is not entirely unexpected, though the timing is somewhat of a surprise as investors are anticipating data from the ph3 Lennox Gastaut Syndrome (LGS) study that could emerge any day (June guidance reiterated this morning). Recall that competitor INSY has noted IS as a potential path to market for its synthetic cannabidiol; INSY is currently running a small phase II study (N=20) that is slated to read out in July.”
“On an indication-by-indication basis, based on the Orphan Drug Act, we believe each company’s cannabidiol formulation – with identical active moieties – would be deemed functionally the same. Thus, should GWPH emerge as the leader (which seems possible given multiple advantages outlined below), we believe INSY would need to find a new indication that is not one of the 4 (Dravet, LGS, Tuberous Sclerosis Complex and now IS) in late stage development for Epidiolex,” the analyst continued.
According to TipRanks.com, analyst Paul Matteis has a yearly average return of -13.8% and a 32% success rate. Matteis has a 20.3% average return when recommending GWPH, and is ranked #3781 out of 3977 analysts.