Biotech Mixed Bag: Jefferies Weighs in on Gilead Sciences, Inc. (GILD) and bluebird bio Inc (BLUE)

Jefferies analysts are diving into the latest biotech news, with Gilead Sciences, Inc. (NASDAQ:GILD) and bluebird bio Inc (NASDAQ:BLUE) on opposite ends of the spectrum. Gilead has found itself in a corner after halting Phase II/III studies for its leading pipeline drug, whereas bluebird is enjoying positive tidings after receiving the PRIME designation. Let’s take a closer look:

Gilead Sciences, Inc.

Gilead announced yesterday that it will be stopping Phase II/III studies for its pipeline drug GS-5745, an anti-MMP9 antibody designed to treat patients suffering with moderate to severe ulcerative colitis (UC). The healthcare giant’s decision comes on the heels of a recommendation from the DMC, halting for both efficacy as well as futility off of an interim analysis of both tested doses.

Jefferies analyst Brian Abrahams remains positive on the firm, reiterating a Buy rating on GILD with a price target of $91, which represents a nearly 12% increase from where the stock is currently trading.

Abrahams notes, “GILD’s ‘5745 ph.II/III termination in UC for futility is disappointing, as we had viewed past UC data as promising and the asset as overlooked; removal of prob-adj UC revs would have $1 negative impact to valuation. Still, we believe expectations were low, and see many other pipeline datapoints expected to read out over coming months (filgotinib, momelotinib, 9620, bictegravir, simtuzumab, 4997) that receive little value and could drive upside if successful.”

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Brian Abrahams is ranked #282 out of 4,175 analysts. Abrahams has a 62% success rate and garners 7.5% in his annual returns. When recommending GILD, Abrahams gains 18.4% in average profits on the stock.

TipRanks analytics exhibit GILD as a Buy. Based on 17 analysts polled in the last 3 months, 10 rate a Buy on GILD, while 7 maintain a Hold. The 12-month average price target stands at $105.50, marking a 29% upside from where the shares last closed.

blubird bio Inc

bluebird can celebrate after receiving the Priority Medicines (PRIME) scheme from the European Medicines Agency (EMA) for LentiGlobin in transfusion-dependent beta-thalassemia (BT), which is comparable to the U.S. Breakthrough Designation.

Jefferies analyst Gena Wang believes this indicates that the agency recognizes LentiGlobin’s initial clinical activity, anticipating accelerated regulatory path prospects on continued positive interactions with the EMA. As such, the analyst reiterates a Buy rating on BLUE with a price target of $80, which represents a nearly 10% increase from where the shares last closed.

Wang contends, “We continue to see upcoming ASH data as key to support potential drug efficacy with improved manufacturing process.”

From the analyst’s perspective, “We believe the Street does not give any credit to BLUE’s gene editing platform (MegaTAL), and assigns limited valuation to the bb2121 CART programs (targeting BCMA in multiple myeloma). Any additional updates on these fronts might provide upside opportunities.”

“Although no pts data are expected at ASH with new manufacturing process, we look for several data sets which could provide evidence to support potential of improved efficacy with the transduction enhancers,” Wang affirms.

For now, the analyst glances ahead to T87Q hemoglobin expression levels and VCN correlation indicated in existing points, based on in vitro studies, coupled with a noted “trend of continued expansion” of T87Q hemoglobin expression within SCD points, concluding, “we do not expect these pts to reach transfusion independence.”

We recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Gena Wang is ranked #3,941 out of 4,175 analysts. Wang has a 51% success rate and faces a loss of 11.9% in her yearly returns. However, when recommending BLUE, Wang gains 28.5% in average profits on the stock.

TipRanks analytics demonstrate BLUE as a Strong Buy. Based on 8 analysts polled in the last 3 months, 7 rate a Buy on BLUE, while 1 maintains a Hold. The consensus price target stands at $93.40, marking a 29% upside from where the stock is currently trading.screen-shot-09-22-16-at-05-36-pm

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