Deutsche Bank Reaffirms Buy On Gilead Sciences Following Discussion With Management


In a research note published today, Deutsche Bank analyst Robyn Karnauskas reaffirmed a Buy rating on Gilead Sciences (NASDAQ:GILD) with a $142 price target, following a discussion with GILD’s management.

Karnauskas wrote, “We spoke to GILD management recently about HCV business and how they think about issues such as pricing and competition, especially on the shorter duration front. Management comments make us believe that the pricing of all Oral HCV pill could be in-line with our model at $66K/8 week. Also management noted that FDA cares more about the high SVR rates than lower duration of treatment. Speaking to the co, it will be very difficult for these newer combos at 4 weeks would be able to achieve the high SVR bar (≥ 95%) set by Sovaldi combo which may be required by the FDA.”

Karnauskas continued, “GILD and Merck both are doing trials to look at possibility of 4 week HCV cure. Notably GILD showed high cure rates (90-100% range) at 6 weeks with triple combo. Given the success seen with 6 wk treatment, GILD has decided not present 4 wk data at AASLD this yr & expect to present data at EASL next year. We believe it is likely that 4 week treatment did not produce high cure rates which may be needed for FDA approval. The 95% cure rate bar may be difficult to achieve with 4 week treatment.” The analyst added, “We highlight that GILD has the best in class nuke and if it is difficult to cure patients with the best in class drug at 4 weeks, we believe it may be equally/more difficult for other players. However, we believe other combos could still work at longer durations & model competition accordingly.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Robyn Karnauskas has a total average return of 10.8% and a 69.4% success rate. Karnauskas has a 47.3% average return when recommending GILD, and is ranked #239 out of 3326 analysts.

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