Gilead Sciences’ HIV Franchise Is Poised to Recapture Share, Says Senior Analyst Phil Nadeau


Gilead Sciences, Inc. (NASDAQ:GILD), which built its reputation on turning HIV drug cocktails into easy-to-use, daily, single-pill regimens, announced today that the FDA has approved its HIV combo drug Biktarvy.

In reaction, Cowen analyst Phil Nadeau reiterates an Outperform rating on shares of Gilead, with a price target of $90, which implies an upside of 9% from current levels. (To watch Nadeau’s track record, click here)

Nadeau commented, “Our consultants report that prior to the approval of Biktarvy, they had to prescribe either a single tablet regimen that lacked a best-in-class agent (dolutegravir or TAF) or give up the convenience of a single tablet to combine Descovy (F/TAF) with Tivicay. Our consultants have been clear that if bictegravir is merely “just as good” as dolutegravir in terms of both efficacy and safety, then Biktarvy will become their clear first choice regimen. In fact, under this scenario our consultants report they will have “no need” for Tivicay or Triumeq and would rapidly shift prescribing toward B/F/TAF.”

“We think that the details of bictegravir’s Phase III data suggest that it is just as efficacious, safe, and well tolerated as dolutegravir. Therefore, we think that Gilead is poised to recapture share in the HIV market now that Biktarvy is approved. Since physicians prefer TAF and single tablets, the TAF-based Biktarvy should help Gilead regain share from ViiV and could become a HIV therapy backbone in the 2020s. As Tivicay and Triumeq are currently at an approximate $4B annual revenue run rate, should Gilead capture even 25% of their patient share it would drive meaningful incremental revenue for GILD’s HIV franchise, which we project will have $14.8B in revenue in 2018.”

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The Street largely seems to echo Nadeau’s positive sentiment on the biotech giant, considering TipRanks analytics showcase GILD as a Buy. Out of 14 analysts polled in the last 3 months, 8 are bullish on Gilead stock, while 6 remain sidelined. With a potential upside of nearly 8%, the stock’s consensus target price stands at $89.70.