It has been a year of two halves for Gilead Sciences (GILD). Following the pandemic’s onset, the pharma heavyweight was initially one of the main beneficiaries. Hopes were high Gilead’s experimental Covid-19 antiviral drug remdesivir will play its part in combating COVID-19, and shares dutifully took off.
But since April’s yearly highs, Gilead has faced a series of headwinds which have stunted its market performance.
Disappointing earnings, a CRL (complete response letter) from the FDA for rheumatoid arthritis (RA) treatment filgotinib, and concerns regarding remdesivir’s commercial potential, are among the reasons why shares have swung into the red in 2020.
Now remdesivir is back in the headlines again, after it was announced Trump is being treated with the drug, since being diagnosed with COVID-19.
Remdesivir has been given emergency use authorization (EUA) by the FDA for the treatment of hospitalized COVID-19 patients and patients with moderate symptoms. The biotech submitted an NDA (new drug application) for the treatment in August based on results of a study overseen by the National Institute of Allergy and Infectious Diseases (NIAID).
Although the treatment didn't show any significant evidence of a survival benefit, in the NIAID study remdesivir meaningfully reduced the amount of time COVID-19 patients spent in the hospital. Most patients who took the treatment recuperated after 11 days or less vs the 15 days it took for the placebo group.
After scouring the latest data available from the study, Raymond James analyst Steven Seedhouse believes the new data does not significantly change what is already widely known.
The 5-star analyst said, “The updated data continue to suggest RDV provides only incremental benefit to some hospitalized patients but no clear mortality benefit. Recall the original corresponding NEJM publication for this trial pointed to a potential (but not yet stat sig) mortality benefit at day 14 that appeared driven really only by patients with baseline ordinal score of 5 (hospitalized, requiring any supplemental oxygen).”
As a result, Seedhouse keeps a Market Perform (i.e. Hold) on GILD shares but does not provide a fixed price target. (To watch Seedhouse’s track record, click here)
Overall, opinions differ on Wall Street regarding Gilead’s potential trajectory, leaning slightly to the bullish side. Based on 9 Buys, 10 Holds, and 2 Sells, the stock has a Moderate Buy consensus rating. A clearer picture emerges where the price target is concerned, as on average, the analysts expect shares to add 26.5% over the next 12 months. (See GILD stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.