Gilead Sciences, Inc. (GILD) Takes Promising Step with NASH Asset, Cheers J.P. Morgan

Cory Kasimov: GILD's Phase II study data may be early, but first signs speak to a well-tolerated treatment.


Yesterday, at the 68th Annual Meeting of the American Association of the Study of Liver Diseases (AASLD) in Washington, D.C., Gilead Sciences, Inc. (NASDAQ:GILD) released promising initial data from its Phase II trial in nonalcoholic steatohepatitis (NASH).

J.P. Morgan analyst Cory Kasimov is encouraged to see the biotech giant’s ACC inhibitor GS-0976 hinting at a positive profile of efficacy and safety. Even if the data is not fully cooked just yet, the analyst takes yesterday’s meeting as a bullish clue towards “proving the combination potential of 0976.”

In reaction, the analyst maintains an Overweight rating on GILD stock with an $85 price target, which implies a 6% upside from current levels. (To watch Kasimov’s track record, click here)

“Though early and far from conclusive, we view the results as a step in the right direction (good safety and initial signs of efficacy). At the higher 20mg dose, GS-0976 produced stat-sig reductions in liver fat (assessed by MRI) and TIMP-1 (a serum biomarker for fibrosis). Of note, improvement in fibrosis stage (which is the primary endpoint for the Phase 3 selonsertib studies) was not reported. Recall that in addition to GS-0976, the ASK inhibitor selonsertib is currently in two separate Phase 3 trials and the FXR inhibitor GS-9674 is in a Phase 2. GILD’s intention has been to bring some combination of the three assets into larger Phase 2 trials in 2018. For now we await additional readouts (GS-9674 monotherapy and Phase 2 combo safety studies) to help clarify the ultimate potential for these assets in this significant unmet need,” Kasimov surmises.

Wall Street is in a toss-up on this drug maker, considering that according to TipRanks, based on 16 analysts polled in the last 3 months, 9 rate a Buy on Gilead stock while 7 maintain a Hold. The 12-month average price target stands at $88.55, marking a nearly 11% upside from where the stock is currently trading.

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