On Thursday, BMO Capital Markets sustained its positive outlook on shares of Gilead Sciences (NASDAQ:GILD), maintaining an Outperform rating and a price target of $85.00. The affirmation follows the recent approval of Livdelzi for patients with primary biliary cholangitis (PBC) who have not responded well to or are intolerant of ursodeoxycholic acid (UDCA).
The approval of Livdelzi, previously known as seladelpar, marks a significant triumph for Gilead Sciences, especially after the company's acquisition of Cymabay for $4.3 billion. This strategic move has expanded Gilead's portfolio and strengthened its position in the liver disease market.
The analyst pointed out the potential for Livdelzi's success, citing its unique benefits in treating pruritus associated with PBC, a chronic liver disease. The drug's approval is expected to be met with strong demand, leveraged by Gilead's established commercial presence in the liver disease sector.
Gilead's management has indicated that its current sales force is well-positioned to promote Livdelzi, with coverage of approximately 80% of potential prescribers. This extensive reach is anticipated to facilitate the drug's market penetration and support its uptake among healthcare providers.
The longer-term ASSURE data presented at the Digestive Disease Week (DDW) conference further underscores the drug's potential, contributing to the analyst's positive assessment of Gilead's stock. The company's recent developments and strategic acquisitions are poised to enhance its product offerings and market share in the treatment of liver diseases.
In other recent news, Gilead Sciences has seen a series of significant developments. The company's target price was raised to $83 by Truist Securities, following the FDA's approval of its new drug, Livdelzi, for primary biliary cholangitis. This new therapy, expected to generate sales exceeding $1 billion, strengthens Gilead's liver disease portfolio and sets the stage for future growth.
Gilead also reported a 6% year-over-year rise in total product sales during its second quarter of 2024, reaching $6.7 billion. This increase was driven by an 8% rise in sales for its HIV treatment, Biktarvy, and a 23% increase for the oncology drug, Trodelvy. As a result, Gilead has revised its full-year non-GAAP operating income and EPS guidance upwards.
In addition to these financial highlights, Gilead has received accelerated approval from the FDA for Livdelzi, based on the promising results of the Phase 3 RESPONSE study. The company is also preparing for the launch of seladelpar for PBC in the US and expects a European regulatory decision in early 2025.
Truist Securities maintains a positive outlook on Gilead's future, highlighting potential developments such as the PURPOSE-2 trial results and the results from the iMMagine-1 trial. Despite these advancements, the report noted that Trodelvy continues to pose challenges to market sentiment regarding Gilead.
InvestingPro Insights
Gilead Sciences' recent approval of Livdelzi and its strategic acquisition of Cymabay have positioned the company as a key player in the liver disease market. Supporting this outlook, InvestingPro data indicates a strong financial foundation, with Gilead boasting a market capitalization of $92.3 billion and an impressive gross profit margin of 77.44% over the last twelve months as of Q2 2024. This financial health is complemented by a consistent revenue growth, posting a 5.36% quarterly increase in revenue as of Q2 2024.
InvestingPro Tips highlight Gilead's shareholder-friendly moves, such as raising its dividend for 9 consecutive years, which aligns with the company's robust dividend yield of 4.15% as of the latest data. Moreover, the company's valuation implies a strong free cash flow yield, an attractive trait for investors seeking companies with solid financials and the potential for return on investment. For readers interested in a deeper dive into Gilead's investment profile, there are additional InvestingPro Tips available on InvestingPro that provide further insights into the company's performance and outlook.
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