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Wait for More Clarity Before Buying Gilead Stock, Says Analyst

Gilead Sciences (GILD) has outperformed the market in 2020, up nearly 16%, as hopes have been pinned on its ability to bring a viable COVID-19 treatment to market.

The Phase 3 SIMPLE trial evaluating remdesivir as a 5 and 10-day treatment for moderately ill COVID-19 patients compared to placebo, found that by the primary end point of day 11, those given the medication for 5 days were more likely to show a clinical improvement than those receiving standard care. 

However, patients taking the medicine for 10 days displayed some clinical improvement but not enough to be statistically significant, compared to the standard-of-care treatment.

It should be noted that no new safety issues came to the fore. The full data is expected to be released later in the year.

Remdesivir is also currently being evaluated in an NIH (National Institute of Allergy and Infectious Diseases) Phase 3 ACTT-II trial, while a collaboration between Gilead and Roche on a Phase 3 trial of remdesivir combined with Actemra is slated to begin later in the month.

Needham analyst Alan Carr commented, “Our overall interpretation from both SIMPLE trials as well as the NIH ACTT-1 trial are that 5 and 10-day regimens are roughly equivalent and that the drug is of moderate benefit to COVID-19 patients. We acknowledge a central role for the drug in the treatment of COVID-19, but await clarity, on how, when, and for what price remdesivir will be distributed in the U.S. and ex-U.S.”

To this end, Carr maintains a Hold rating on GILD shares, yet hasn’t set a price target. (To watch Carr’s track record, click here)

Carr’s thesis is backed by a majority of the analyst community. Gilead’s Hold consensus rating is based on 15 Holds vs 9 Buys and 4 Sells. There’s upside of 7.5%, should the average price target of $79.95 be met over the next 12 months. (See Gilead stock analysis on TipRanks)

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