Analysts from J.P. Morgan and BTIG are coming out with bullish casts of the dice for two biotech players: Gilead Sciences, Inc. (NASDAQ:GILD) and Synergy Pharmaceuticals Inc (NASDAQ:SGYP). One analyst expected Gilead to excite with its Phase 3 trials, and the giant did not disappoint, posting four successful Phase 3 top-line data read-outs in HIV. Likewise, another analyst remains impressed with Synergy’s robust prescription trends for Trulance, seeing a substantial market opportunity for chronic constipation patients in the U.S. Let’s dive in:
Gilead’s Key to Competitive Standing in HIV Market
Gilead’s four Phase 3 trials in HIV evaluating bictegravir +F/TAF (B/F/TAF) against different treatment controls all achieved primary non-inferiority endpoints, a quadruple success now in tow. While J.P. Morgan analyst Cory Kasimov is not shocked by the successful data read-outs, he certainly continues to sing the biotech giant’s praises, reiterating an Overweight rating on shares of GILD with an $80 price target, which represents a 24% increase from where the stock is currently trading.
From the analyst’s stance, bictegravir is crucial, because the drug offers the giant a non-boosted integrase inhibitor (INSTI), which is what GILD needs to keep its competitive edge sharp in the HIV market; especially considering that INSTIs have evolved to be considered standard of care for first line HIV treatment.
“Beyond this top-line information there isn’t much in the way of additional data in the release (as expected); the co plans to present more detailed data at a medical meeting later this year. The NDA filing is now expected in 2Q (vs. 3Q prvsly), and the MAA is on track for 3Q. Overall we are generally encouraged by the news, though not entirely surprised based on Ph2 data (our thoughts here). We’d also point out that B/F/TAF is the one GILD pipeline asset already included in our model. As noted in our HIV deep dive […] we think the launch of this product (in ~2018; potentially with expedited review using one of GILD’s 2 PRVs) could be key for GILD to help maintain market share in the face of continued dolutegravir growth and wave of patent expires in the next ~5 years,” Kasimov contends, projecting sales to hit a high of roughly $5 billion by the year 2022.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, Cory Kasimov is ranked #4,339 out of 4,571 analysts. Kasimov has a 36% success rate and faces a loss of 4.5% in his annual returns. When recommending GILD, Kasimov forfeits 12.7% in average profits on the stock.
TipRanks analytics show GILD as a Buy. Out of 14 analysts polled by TipRanks in the last 3 months, 10 are bullish on Gilead stock while 4 remain sidelined. With a return potential of 24%, the stock’s consensus target price stands at $80.10.
Synergy’s Trulance Sales Potential Circles $500 Million by 2022
Synergy’s weekly prescription trends keep looking better than ever for Trulance, says BTIG analyst Tim Chiang, who sees the chronic idiopathic constipation (CIC) drug going above and beyond initial forecasts. Therefore, the analyst maintains his long-term peak sales projection of Trulance attaining roughly $500 million within the next five years, seeing the goal as “achievable” when assessing a market that reaches out to approximately 40 million domestic patients afflicted with chronic constipation left to take laxatives over-the-counter.
As such, the analyst reiterates a Buy rating on shares of SGYP with a price target of $11, which represents a 225% increase from current levels.
Chiang surmises, “We believe the launch of the Co.’s Trulance continues to perform better than our expectations. While SGYP share weakness has not abated since Trulance was launched, we believe the product’s peak sales potential remains at ~$500M by 2022. Based on our analysis of prescription trends for Trulance (once-daily dosed plecanatide for the treatment of chronic constipation), we believe weekly run rate figures are now in excess of 800 prescriptions in its 9th week of launch. We remain confident in the Co.’s ability to meet our CY17 Trulance sales estimate of ~$21.5M. Another item we are beginning to track is Trulance refills, which have also begun to ramp. In the most recent week ending May 19, Symphony Healthcare reported ~101 refills being dispensed. We do think refills will be important to watch, as this is an indicator of patients continuing on Rx treatment.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, four-star analyst Tim Chiang is ranked #625 out of 4,569 analysts. Chiang has a 58% success rate and realizes 11.6% in his yearly returns. However, when recommending SGYP, Chiang loses 13.0% in average profits on the stock.
TipRanks analytics indicate SGYP as a Buy. Based on 4 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on Synergy stock and 1 issues a Sell. The 12-month average price target stands at $13.33, marking a 293% upside from where the stock is currently trading.