Gilead Sciences, Inc. (NASDAQ: GILD) announced a strategic collaboration Wednesday with Scholar Rock Holding Corp (NASDAQ: SRRK). Although not strictly a nonalcoholic steatohepatitis, or NASH, deal, the initiative could be a sign that “Gilead is in NASH for the long haul,” according to Raymond James.
Analyst Steve Seedhouse maintains a Strong Buy rating on Gilead with an unchanged $94 price target.
Given the limited scope of Gilead’s in-house NASH assets, the company will need to enter into more NASH deals over the next 12-18 months, Seedhouse said in a note.
A significant possibility exists of Gilead’s ongoing Phase 3 STELLAR3 and STELLAR4 trials failing, which would lead the company to consider more deals to grow within the NASH market, the analyst said.
Gilead could purchase a commercial-ready NASH asset, Seedhouse said, which points to two options: Intercept Pharmaceuticals Inc (NASDAQ: ICPT) and Genfit SA.
There’s a higher probability of Gilead buying Intercept, given the better prospects of Ocaliva versus elafibranor, as well as the likelihood of success of the Phase 3 REGENERATE trial,he said.
Data from the trial is expected in the first half of 2019, and there’s a 90-percent probability of at least one approvable endpoint being met, Seedhouse said.
Another strategic option that Gilead may take is to acquire or develop a good cardiometabolic asset, according to Raymond James.
Gilead shares were trading near-flat at $64.22 at the time of publication Thursday.
Intercept Pharma Notches 2 Upgrades On Ocaliva Prospects
Latest Ratings for GILD
|Dec 2018||Morgan Stanley||Maintains||Equal-Weight||Equal-Weight|
|Oct 2018||Raymond James||Maintains||Strong Buy||Strong Buy|
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