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Gilead stock upgraded to buy from neutral at UBS

Sarah Toy

Analysts at UBS upgraded shares of Gilead Sciences Inc. to buy from neutral and boosted the price target on the stock to $77 from $75 on Wednesday, citing "two important clinical wins" that could each one day bring in more than $2 billion in revenue. "Following the failure of selonsertib in NASH, Gilead has rattled off two important clinical wins: positive Descovy PrEP data and filgotinib FINCH1/3 data," UBS analyst Carter Gould wrote in a note to clients. Descovy is currently approved to treat HIV, but it is not approved to be used as pre-exposure prophylaxis, or PrEP, to reduce the risk of acquiring the virus. Filgotinib is a promising investigational rheumatoid arthritis drug that Gilead is developing with Galapagos NV . "On the back of Biktarvy growth, Descovy PrEP utilization, and filgotinib, we have increased conviction that the top-line will grow and model faster growth," Gould wrote, adding he saw "less downside risk relative to peers (Amgen and Biogen)." He also raised his full-year EPS estimate for Gilead to $6.85 from $6.73, citing strong sales trends for HIV drugs Biktarvy and Truvada and lower projected SG&A expense due to the failure of selonsertib, an investigational drug designed to treat nonalcoholic steatohepatitis (NASH) that recently failed to meet the primary endpoint in a Phase 3 study. Shares of Gilead have gained 7.4% in the year to date, while the S&P 500 has gained 15%.