Key Takeaways From William Blair’s Annual Growth Stock Conference: Gilead Sciences, Inc. (GILD), Exelixis, Inc. (EXEL)
William Blair analyst John Sonnier is out highlighting standout insights from his 37th Annual Growth Stock Conference held yesterday. Gilead Sciences, Inc. (NASDAQ:GILD) and Exelixis, Inc. (NASDAQ:EXEL) revealed corporate updates regarding business proceedings and clinical development program progress that have the analyst rooting for GILD's HIV franchise and Exelixis' strong short and long-term commercial staying power.
Before we start, as usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. According to TipRanks, which measures analysts' and bloggers' success rate based on how their calls perform, Sonnier is ranked #441 out of 4,578 analysts. The analyst has a 52% success rate and realizes 18.9% in his annual returns.
Let's take a closer look as to why Sonnier is casting bullish forecasts on Gilead and Exelixis:
Gilead's HIV Franchise in Fighting Form Against the Competition
Gilead's chief financial officer Robin Washington and executive vice president of commercial operations Jim Meyers presented at the conference, outlining a revenue pathway that could help Gilead steal market share away from its rivals. In reaction, the analyst reiterates an Outperform rating on shares of GILD without listing a price target.
Sonnier notes, "In our view, the HIV franchise provides a durable revenue stream for Gilead, and the company continues to make progress in the disease space. […] We highlight that bictegravir, like Tivicay, is a non-boosted protease inhibitor, and pending approval, we believe the emtricitabine, TAF, bictegravir regimen could help accelerate Gilead’s market share gain from competitors."
From an investor mindset, the analyst opines, "For the HCV franchise, investors continue to focus on the timing and magnitude of the 'steady-state' patient flow. Recall that management provided 2017 HCV guidance in fourth quarter 2016 that was significantly below the Street’s expectations; […]" However, moving forward, "We believe investors will continue to be keenly focused on the global patient flow in the second quarter and potential product launch of competitor product, glecaprevir/pibrentasvir, in early August, in the third quarter," concludes Sonnier.
TipRanks analytics indicate GILD as a Strong Buy. Out of 12 analysts polled by TipRanks in the last 3 months, 10 are bullish on Gilead stock while 2 remain sidelined. With a return potential of nearly 28%, the stock's consensus target price stands at $83.18.
Exelixis Profit Prospects Taking Off Thanks to Strong Cabometyx Launch
Exelixis chief financial officer Christopher Senner spoke of his biotech giant's momentum, riding a first tidal quarter of profits operationally on back of a robust launch for Cabometyx in the indication of second-line renal cell carcinoma (RCC)."In the midterm, we anticipate potential expansions into the first-line setting, based on positive Phase II CABOSUN study," predicts Sonnier, who reiterates an Outperform rating on EXEL without suggesting a price target.
The analyst underscores an evolution at hand for Exelixis, asserting, "We highlight in the past 24 months, the company has transformed from a development-stage to a commercial-stage biotech company, which we believe primarily drove the stock appreciation of over 540% during the time frame. […] We believe current clinical initiatives sets Exelixis up well for near-, mid-, and long-term growth."
Moreover, "We reiterate our view that Exelixis is a fundamentally sound company with a robust growth profile, driven by near-, mid-, and long-term initiatives. Exelixis reported its first profitable quarter, on an operating basis, in the first quarter, driven by the strong launch of Cabometyx in the second-line RCC setting. We believe near-term stock performance will primarily be driven by continued robust adoption of Cabometyx among prescribing physicians," continues Sonnier.
"Lastly, over the longer term, we anticipate visibility into the market potential of combining Cabometyx with anti-PD1 or anti-PD-L1 agents (e.g., Opdivo or Tecentriq) in RCC, HCC, and potentially other solid tumors," the analyst surmises, confident in Exelixis' irons in the fire.
TipRanks analytics show EXEL as a Buy. Based on 3 analysts polled by TipRanks in the last 3 months, 1 rates a Buy on Exelixis stock while 2 maintain a Hold. The 12-month average price target stands at $26.00, marking a nearly 31% upside from where the stock is currently trading.
