More Patience Needed at Gilead

The biotech also recorded $64 million in sales for Epclusa, the first treatment for all genotypes of hepatitis C. What’s notable about this figure is that it was achieved between June 28, when the FDA approved Epclusa, and the end of the second quarter on June 30.

It has 61.87 million of outstanding shares and its shares float measured at 60.35. You’d be right. Gilead announced second-quarter earnings of $3.5 billion.

While the list price has not changed, Gilead has offered discounts to certain insurers.

Gilead reported total revenue of $7.78 billion in the second quarter.

Analysts projected the maximum potential price target of $135 however minimum reachable price target is $80 expected by them, according to WSJ data. However, sales of Sovaldi, registered year-over-year growth of 5.2% to $1.4 billion. Kevin Young, Gilead’s Chief Operating Officer estimated that roughly 45% of payers were in the public sector, adding that the Department of Veteran Affairs (VA), for example, was “very motivated to essentialy eradicate the virus from that population”.

The bright spots for Gilead came from its newer drugs.

Rapid success of Harvoni, along with its precursor Sovaldi, had shot Gilead to the top of the hepatitis C market in 2014 and 2015. The company hopes to establish Epclusa as a standard, mainstay therapy for the disease in the coming years. Sequentially, there was an increase in HIV, HCV (U.S.) and other products that was offset by a decline in HCV sales in Japan and Europe. Because TAF poses less of a risk of liver damage than Viread, newly launched therapies including it can be used in more high-risk patients. The stock has a consensus analyst price target of $116.86for twelve month.

Gilead’s product sales dropped to $7.65 billion compared to$8.13 billion one year ago during the same quarter. Its other products include AmBisome and Macugen. Analyst consensus had an EPS estimate of $3.02 and $7.79 billion in revenue.

It turns out in retrospect, that peak use of the drug occurred within six to nine months after it was introduced, Milligan said during the conference call.

Viread is the brand name for tenofovir disoproxil fumarate (or TDF), which is the main component in the majority of Gilead Sciences’ HIV drugs.

Those trends heighten concerns about Gilead’s flagging growth. The stock has a P/E ratio of 7.58. This was the second consecutive quarter that disappointed. Shares traded down some 4% after-hours on the earnings release yesterday and are down another 4% pre-market today. The company market cap of 1.16B.

Merrill Lynch said in its report that it has a Neutral rating, but the firm lowered its price objective to $100 from $105. In our view, Gilead will stick to its strategy of building a long-term pipeline through acquisition of a string of early-to-mid stage development assets and be opportunistic about M&A. Eight research analysts have rated the stock with a hold rating, twenty-one have issued a buy rating and one has assigned a strong buy rating to the company. North Star Investment Management Corp. now owns 2,165 shares of the biopharmaceutical company’s stock worth $181,000 after buying an additional 700 shares during the last quarter. Maxim Group downgraded the shares of GILD in a report on April 29 to “Hold” rating.

Credit Suisse analyst Alethia Young cut her price target to 115 from 120. He continues to be believe that the company’s internal pipeline can not materially improve its outlook, and a deal decision is needed.