Healthcare Analysts Weigh In on Gilead Sciences, Inc. (GILD) and Incyte Corporation (INCY) Following Management Meetings

Analysts were able to meet with management from Gilead Sciences, Inc. (NASDAQ:GILD) and Incyte Corporation (NASDAQ:INCY) to gain insight into both companies’ future plans. Below, analysts dive into pipeline developments and long-term expectations for both biotech companies.

Gilead Sciences, Inc.

Jefferies analyst Brian Abrahams had a chance to chat with Gilead CFO Robin Washington at a conference last week, leaving the analyst to comment on the company’s business development plans. Abrahams takes a closer look at the long-term and near-term implications of these plans.

The analyst explains that Gilead’s business development plans are “proactive and open.” He elaborates, “Despite openness to larger transactions as well as potentially bringing in revenues near-term from an existing product, [management] seem[s] more inclined towards acquisitions where headcount is limited and they can provide scientific, regulatory and developmental expertise rather than operational synergies.” As for pipeline additions, the company is focused on areas “where they currently have some inroads” including liver disease, such as hepatitis B, and inflammation.

Abrahams also touches on Gilead’s Hepatitis C franchise, where it used to rule the market with Harvoni and Sovaldi. However, this dominance has been challenged recently with new, competing drugs entering the market. Gilead is now focusing on “balancing retention of share with maintenance of pricing in this increasingly competitive market,” which will be reflected in the stock in the long-term.

Abrahams reiterates a Hold rating on Gilead with a $96 price target. While the company’s low multiple is attractive, the analyst awaits clarity on growth necessary for near-term upside.

According to TipRanks, 57% of analysts are bullish on Gilead and 43% are neutral. The average 12-month price target is $114.17, marking a 36% potential upside from where shares last closed.

Incyte Corporation

Incyte CEO Herve Hoppenot met with JMP Securities analyst Liisa Bayko to discuss the company’s place in the immunoncology space.

Hoppenot is quick to clarify that there is more to Incyte than immunoncology. Bayko explains the CEO’s thoughts, explaining, “Mr. Hoppenot thinks it will be a battle to win market share in the immunoncology space with different niches for a variety of products… He is confident that INCY will find market share due to its emphasis on early science, which eventually translates to superior candidates, citing INCY’s cMET, IDO, and JAK programs.” While there is plenty of room for the company in the cancer field, the company is already exploring opportunities in graft versus host disease (GVHD) and alopecia.

For now, all eyes are on Incyte’s IDO inhibitor, epacadostat, currently in Phase 1/2 trials to test the drug with PD1/PDL-1 antibodies. According to Bayko, Hoppenot believes “INCY is one of the few companies developing a combination with PD1/PDL-1 that is advanced enough to perform a pivotal trial compared to a PD1/PDL-1 monotherapy.” Aside from epacadostat, Hoppenot points to baricitinib’s potential to be a “multibillion dollar product, which will grow for ~14 years.”

Bayko reiterates a Market Outperform rating on Incyte with a $100 price target. She explains, “We continue to recommend INCY shares for longterm investors and we like INCY’s diversified immunoncology pipeline. We specifically look forward to data in 4Q, which should provide some direction as to which tumor types INCY and its partners will seek to expand the IDO program beyond melanoma.”

According to TipRanks, 100% of analysts covering Incyte are bullish on the stock with a 12-month average price target of $90.14, marking a 12% upside from where shares last closed.


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