Gilead Sciences, Inc. (GILD) Positioned to Regain Share in HIV Market: Cowen

Gilead Sciences, Inc. (NASDAQ:GILD) impressed Cowen analyst Phil Nadeau with its successful four Phase III trials evaluating a dose combination of the biotech giant’s investigational inhibitor bictegravir with emtricitabine and tenofovir alafenamide, with each meeting primary endpoints of noninferiority. For Nadeau, though “the devil will be in the details of the data,” he more importantly believes that “the top-line results suggest GILD will be positioned to regain share” in the HIV market.

In reaction to the news, the analyst reiterates an Outperform rating on shares of GILD with a $90 price target, which represents a 39% increase from where the stock is currently trading.

Nadeau highlights, “Bictegravir’s 4 Ph. III trials met the primary endpoint of noninferiority. Our HIV physician consultants have said that if bictegravir is simply as good as dolutegravir, GILD would regain share as bictegravir/FTC/TAF would become their preferred regimen. The details of the Ph. III data will be important, but this morning’s results appear good enough. We continue to think that GILD is undervalued.”

What about the naysayer investors who are skeptical on the drug’s superiority? Some say Gilead’s franchise needs a step up. However, when Nadeau turns to his physician consultant checks, he argues otherwise, concluding, “Our consultants have been clear that by virtue of its ability to be combined with the best nucleoside/nucleotide backbone of FTC/TAF in a fixed dose once daily combo pill, a “non-inferior” bictegravir will position Gilead to recapture share. Therefore, though a full evaluation must await the presentation of the full data, today’s top-line release suggests that Gilead is positioned to reclaim some HIV patient share, and that there is a good chance that GILD’s HIV revenue growth will re-accelerate more than assumed in our current estimates […]”

Already, the analyst was projecting $13.4 billion in revenue by next year, which would imply a 1.5% year-over-year rise, with GILD reaching $15.5 billion in revenue by 2021, marking a 3% CAGR surge for 2016 to 2021. Moreover, the analyst anticipates “noninferior” bictegravir could bring in as much as an added $1 to $2 billion in revenue to his present expectations.

Looking forward, the biotech giant should file a domestic NDA for bictegravir in the second quarter, with an EU MAA to follow by the third quarter of this year.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Phil Nadeau is ranked #1,689 out of 4,571 analysts. Nadeau has a 43% success rate and earns 2.2% in his yearly returns. When recommending GILD, Nadeau forfeits 9.1% in average profits on the stock.

TipRanks analytics indicate GILD as a Buy. Out of 13 analysts polled by TipRanks in the last 3 months, 9 are bullish on Gilead stock while 4 remain sidelined. With a return potential of nearly 26%, the stock’s consensus target price stands at $81.10.

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