Bernstein on Gilead Sciences (GILD) Post Arcellx Acquisition: 'We Like This Deal'

Bernstein SocGen Group analyst Courtney Breen reiterated an Outperform rating and $160.00 price target on Gilead Sciences (NASDAQ: GILD).

The analyst commented: "GILD buys out Arcellx - a derisked acquisition as deal size trends back upwards; We like this deal: This is a step-up in spend for GILD (vs $1-3B BAU spend). But this stepup in spend is paired with a highly-derisked opportunity (4L+ approval is anticipated in Dec) & an extremely well-known partner, with unique technology. This deal is in an area of GILD (Kite) expertise, meaning diligence & future clinical development capabilities are stronger than were at the time for the equivalent immunomedics deal. What does this say about GILD M&A: This reminds us that GILD management are willing to do sizeable deals that continue to support diversification of the portfolio, but the set-up now is for greater rigor & internal capabilities to deliver on these diversification efforts compared with the past.

Our take: We like the deal, particularly the scale of sales milestone ($6B cumulative) attributed to the CVR (before year end ‘29) and the potential for returns relative to upfront spend (Exhibit 1). Gilead know this lead asset, the CAR-T technology, development and the market well to deliver above consensus expectations with Anito-cel (Exhibit 2), supporting their CAR-T business to return to growth. Near-term FDA approval & deep knowledge materially derisk deal return, with technology & earlier pipeline value incremental upside."

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 $149.83 yesterday.

You May Also Be Interested In

• Freedom Broker Downgrades Flexsteel (FLXS) to Hold
• Trump highlights ibogaine development push, Psyence BioMed responds
• Raymond James Resumes Safehold (SAFE) at Market Perform