Gilead (GILD) Bullish Stance Reiterated at Maxim Group Following Priority Review for Sofosbuvir in Chronic HCV

Gilead Sciences (NASDAQ: GILD) announced that the FDA has granted priority review to the company’s New Drug Application (NDA) for an investigational, once-daily, fixed-dose combination of the nucleotide analog polymerase inhibitor sofosbuvir (SOF) and velpatasvir (VEL-NS5a) for chronic genotype 1-6 HCV infection. In the ASTRAL trials, the overall cure rate was exemplary at 99%, 99%, 94%, 95%, 80% and 83%. No change to the Buy rating or $137 PT.

Gilead filed the NDA for SOF/VEL on October 28, 2015, and the FDA has set a target action date under the Prescription Drug User Fee Act (PDUFA) of June 28, 2016.

The FDA has assigned SOF/VEL a breakthrough therapy designation. Recall that the NDA for SOF/VEL is supported by data from four phase 3 ASTRAL trials, which evaluated the fixed-dose combination in hepatitis C genotypes 1-6.

A marketing application for SOF/VEL is also under review in the European Union and was validated by the European Medicines Agency (EMA) in December. The data included in the application, which was submitted on November 17, 2015, also support the use of SOF/VEL among patients with genotype 1-6 HCV infection, including patients with compensated and decompensated cirrhosis.

The analyst arrives at his $137 price target using 3 equally weighted valuation multiples. The FCFF model uses a 15% discount rate averaging it with an EPS and sum-of-the-parts models with a PE of 15x.

For an analyst ratings summary and ratings history on Gilead Sciences click here. For more ratings news on Gilead Sciences click here.

Shares of Gilead Sciences closed at $98.01 yesterday.

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