Analyst: Gilead Sciences, Inc. Still A Buy After Cancer Drug Fail

Published: Sep 17, 2014

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September 17, 2014

By Riley McDermid, BioSpace.com Breaking News Sr. Editor

News that Gilead Sciences, Inc.’s new pancreatic drug simtuzumab did not significantly increase progression-free survival is not enough reason for investors to exit the stock, an analyst from Guggenheim Partners said late Wednesday.

Gilead’s double-blind Phase II trial consisted of 236 patients with advanced pancreatic cancer, who received intravenous gemcitabine plus either 200 mg intravenous of simtuzumab, 700 mg of simtuzumab or a placebo in cycles of 28 days.

However, progression-free survival did not differ in a statistically significant way among the three groups. The addition of simtuzumab to gemcitabine did not cause any more adverse reactions in patients compared to the addition of placebo to gemcitabine.

The news pushed Gilead stock down almost 1 percent in Wednesday trading to close at $103.84. The hiccup didn’t faze some analysts.

“Although this simtuzumab news is a minor setback for GILD, we believe there is little value for the company's oncology pipeline, beyond idelalisib, reflected in the stock's current price,” wrote Bret Holley, a biotech analyst and medical doctor for Guggenheim, in a note to investors. “We would remain buyers of GILD, especially on weakness ahead of the NT launch of Sovaldi+ledipasvir.”

Holley said that and news that the Foster City, Calif.-based company would continue testing the drug’s efficacy treating cancer and fibrotic diseases could create upside for Wall Street.

“GILD has several additional Phase II shots on goal with the mAb, including colorectal cancer, myelofibrosis, IPF, NASH and PSC,” he wrote.

Guggenheim has maintained its buy rating on the stock.

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