Analysts are weighing in on the pharmaceutical giant Gilead Sciences, Inc. (NASDA:GILD) and Cambridge biotechnology giant Biogen Inc (NASDAQ:BIIB), with mixed ratings and views.
Gilead Sciences, Inc.
Oppenheimer analyst Wendy Lam was out pounding the table on Gilead Sciences, reiterating an Outperform rating and raising the price target to $124 (from $120), which represents a potential upside of 22% from where the stock is currently trading.
Lam wrote, “Contrary to the bear argument, we believe a sharp drop-off in patient volumes is unlikely, due to improved drug access and increasing diagnosis/treatment rates. On competition, we suspect Merck’s entry in 2016 will be less disruptive, and we expect Gilead to aggressively defend its share. Longerterm, we see durable ex-US revs partially offsetting the US decline.”
Furthermore, “With its strong cash position, expectations for tempered growth, plus a weak pipeline with no clear blockbusters in the making, we believe Gilead will need to strike another major deal in the next 12-18 months to lock in longterm growth opportunities. We like oncology (specifically immuno-oncology) as a potential focus area, given strong synergies with Gilead’s existing franchise.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Wendy Lam has a total average return of -3.6% and a 25.0% success rate. Lam has a -6.8% average return when recommending GILD, and is ranked #2782 out of 3795 analysts.
Out of the 13 analysts polled by TipRanks in the last three months, 12 rate Gilead stock a Buy, while one rates the stock a Hold. With a return potential of 26.20%, the stock’s consensus target price stands at $128.75.
In a research report issued today, Piper Jaffray analyst Joshua Schimmer reiterated a Neutral rating on Biogen shares, while reducing the price target to $307 (from $361), despite strong third-quarter results and raised 2015 guidance.
Schimmer explained, “While the company seems to be in a better place today than yesterday, our lower PT reflects our growing concerns since our last BIIB update reflecting a number of competitive and IP factors.”
“Our cautions regarding Tecfidera’s patent estate are growing, and are concerned that the Street is underestimating generic risks. Roche’s ocrelizumab’s benefit in PPMS position it to do potential damage to Tysabri and potentially the rest of BIIB’s MS franchise, which we see as more a threat than benefit considering the royalty that BIIB receives on this product. Other MS threats include eventual genericization of Gilenya, emerging S1P1 competition, price competition in the MS space, and more macro/political pricing pressures. Roche/Chugai’s ACE910 threatens Eloctate. Gene therapy programs threaten the SMA program. And we have little confidence in the Alzheimer’s and LINGO pipeline programs,” the analyst continued.
According to TipRanks.com, analyst Joshua Schimmer has a total average return of -8.4% and a 27.5% success rate. Schimmer has a -11.3% average return when recommending BIIB, and is ranked #3744 out of 3795 analysts.
Out of the 21 analysts polled by TipRanks, 9 rate Biogen stock a Buy, while 4 rate the stock a Hold. With a return potential of nearly 43%, the stock’s consensus target price stands at $389.92.