On Monday, Leerink Partners shifted its stance on Gilead Sciences (NASDAQ:GILD), raising the stock's rating from Market Perform to Outperform. The firm also increased the price target significantly to $96.00, up from the previous $74.00. This adjustment follows a positive reaction to Gilead's recent Phase 3 results for lenacapavir, a semi-annual treatment for HIV prevention.
The analyst at Leerink expressed agreement with the market's positive reception to the drug's prospects for HIV pre-exposure prophylaxis (PrEP) growth. Despite expectations for flat revenue in the near term, the firm believes Gilead has the potential to build on this momentum with upcoming data from its range of longer-acting HIV treatments.
Gilead's valuation could greatly benefit from successes in its HIV treatment portfolio, as sales of Biktarvy, its leading HIV drug, are estimated to account for approximately 45% of the company's revenue before its patent expires in 2033. Leerink also sees an opportunity for Gilead to improve the market's current negative view of its oncology offerings with upcoming Phase 3 results for three key products: anito-cel, Trodelvy, and domvanalimab.
Leerink holds a particularly optimistic view on the potential of anito-cel, an autologous BCMA-CAR-T therapy for cancer. The firm acknowledges that its positive outlook for Trodelvy and domvanalimab is more contrarian compared to consensus, suggesting a higher potential for upside in Gilead's stock should these products succeed in their clinical trials.
In other recent news, TD Cowen maintained its Buy rating on Gilead, despite the company's decision to withdraw mUC indication from its Trodelvy label.
The firm continues to forecast approximately $1.4 billion in revenue from breast cancer indications for Gilead by 2025. Wells Fargo also maintained its Overweight rating on Gilead, projecting Veklury sales around $260 million.
Gilead's HIV drug lenacapavir demonstrated a 96% reduction in HIV infections in a Phase 3 trial, with plans to file for approval by the end of 2024.
Furthermore, Gilead has signed agreements with six manufacturers to produce and distribute generic versions of lenacapavir in 120 primarily low- and lower-middle-income countries, pending regulatory approval.
Gilead reported a 6% year-over-year rise in total product sales, driven by an 8% rise in sales for its HIV treatment, Biktarvy, and a 23% increase for the oncology drug, Trodelvy.
These are recent developments that highlight Gilead's continued strides in both the HIV treatment and oncology sectors.
InvestingPro Insights
Gilead Sciences' recent positive momentum is reflected in InvestingPro data, which shows a strong 20.63% price total return over the past three months and a 32.72% return over six months. This aligns with Leerink Partners' upgraded outlook and increased price target.
InvestingPro Tips highlight Gilead's position as a prominent player in the Biotechnology industry, which is particularly relevant given the company's potential breakthroughs in HIV treatments and oncology offerings discussed in the article. The tip noting that Gilead is trading near its 52-week high further supports the market's positive reaction to recent developments.
Additionally, Gilead's dividend history is noteworthy, with an InvestingPro Tip revealing that the company has raised its dividend for 9 consecutive years. This, combined with a current dividend yield of 3.55%, may appeal to income-focused investors while the company pursues growth in its treatment portfolio.
For readers interested in a deeper analysis, InvestingPro offers 12 additional tips for Gilead Sciences, providing a more comprehensive view of the company's financial health and market position.
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