Buy Gilead Sciences (NASDAQ:GILD) On Weakness, BMO Capital Says; PT Dropped $20 On News
BMO Capital analyst Jim Birchenough dropped his price target on Gilead Sciences (NASDAQ: GILD) to $150.00 (from $170.00) after assessing the impact of Express Scripts' (NASDAQ: ESRX) move make GILD competitor AbbVie's (NYSE: ABBV) VIEKIRA the exclusive option for HCV genotype 1 (GT1) infections. However, the firm reiterated an Outperform rating and told clients to buy on weakness.
"While we understand that this decision might suggest that a commoditized market we believe that features of differentiation with GILDS HARVONI are too great to be held back from patients," Birchenough.
He added, "We understand from GILD that its own negotiations are ongoing with Express Scripts and we expect, at a minimum, that alternative treatments will need to be available on the ESRX formulary given several restrictions on VIEKERA use. Our reduced target assumes 10% share loss for SOVALDI HARVONI and 20% price discount to other PBM's and may be overly harsh. We would buy on weakness."
Disclosure: The author is long GILD.