Joshua Schimmer at Piper Jaffray is chiming in on two biotech players, Gilead Sciences, Inc. (NASDAQ:GILD) and GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH), in his coverage universe following the first day of his the two-day Piper Jaffray Healthcare Conference in New York.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Joshua Schimmer is ranked #4,056 out of 4,241 analysts. Schimmer has a 41% success rate and faces a loss of 4.6% in his annual returns. When recommending GILD, Schimmer loses 3.7% in average profits on the stock. However, when suggesting GWPH, Schimmer gains 20.2%.
Let’s dive in to see why the analyst sees GILD and GWPH in solid positions approaching 2017:
Gilead: The Tale of Two Franchises – The Troublesome HCV and the Upside of HIV
Though Schimmer notes frustration with the biotech giant’s HCV franchise, deeming it unstable as it attempts to confront many challenges and variables, he nonetheless remains positive on the HIV franchise, the segment in a far better position. Therefore, the analyst reiterates an Overweight rating on shares of GILD with a $102 price target, which represents a 38% increase from current levels.
In GILD’s favor, the analyst commends the second of the giant’s franchises, noting, “The HIV franchise continues to do well and is positioned for further upside with the advancement of bictegravir, the once per day integrase inhibitor. GILD is confident that the 2-NRTI backbone will remain standard of care in HIV as it has been for nearly 2 decades.”
In the bigger picture, “When discussing broader strategy and capital allocation, the company continues to insist on their current course of action and points to NASH and other opportunities in the pipeline, though we and investors are growing increasingly inpatient as these programs continue to fail, shares wallow, and the multiple declines to even more unprecedented levels (now 6x forward earnings). That said, we continue to remain constructive on the stock as we see multiple attractive external opportunities and we ultimately expect management to reach this conclusion, sooner but maybe later by the sounds of it,” Schimmer contends.
TipRanks analytics exhibit GILD as a Buy. Based on 17 analysts polled in the last 3 months, 12 rate a Buy on GILD, while 5 maintain a Hold. The 12-month average price target stands at $98.43, marking a 33% upside from where the shares last closed.
As GW Pharmaceuticals prepares to present updated data this weekend at the American Epilepsy Society (AES) on back of success in its first 3 Phase 3 trials of Epidiolex, the biotech firm’s cannabis-based pipeline drug for epilepsy, Schimmer maintains a bullish perspective. The drug so far has performed well in two trials in Dravet Syndrome as well as one in Lennox-Gastaut.
Ahead of the AES data, the analyst reiterates an Overweight rating on GWPH with a price target of $147, which represents a just under 31% increase from where the shares last closed.
Schimmer opines, “We continue to believe that the strong profile of Epidiolex will be reinforced with additional detail from the Phase 3 studies this weekend and hope to ultimately put these bear concerns to rest, and further believe that Epidiolex will be well positioned for commercial launch after approval (NDA filing is anticipated in 1H17).
Overall, “While we consider Onfi a reasonable proxy for patient numbers (the company estimates 30-35k patients on Onfi currently in the US), we believe Epidiolex will benefit from several important differences at launch: strong efficacy with limited additional AEs, enthusiasm from the community, unprecedented level of real-world and clinical data, approximately 1,000 patients currently on drug, and premium pricing,” Schimmer surmises.
TipRanks analytics demonstrate GWPH as a Strong Buy. Out of 6 analysts polled by TipRanks in the last 3 months, all 6 are bullish on GW Pharmaceuticals stock. With a return potential of nearly 45%, the stock’s consensus target price stands at $161.80.
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