After Disappointing Data, We Lower FVE for Gilead
We lowered our fair value estimate for Gilead to $77 per share.
We're lowering our Gilead (GILD) fair value estimate to $77 per share from $79 following disappointing data for remdesivir as a treatment for COVID-19 and Galapagos' osteoarthritis drug candidate GLPG1972 (Gilead holds an option on U.S. rights). We think the shares look slightly undervalued at recent prices, and we continue to think that Gilead's HIV portfolio and immunology and oncology pipelines warrant a wide moat rating. However, the firm is clearly in a transitional phase as it digests large oncology deals like Forty Seven and Immunomedics, and if these deals fail to generate blockbuster oncology therapies that allow Gilead to gain a foothold on the market, we could see some erosion of the firm's competitive advantages.
We're lowering our remdesivir sales estimates to $1.9 billion in 2020 (from $3 billion) and below $1 billion in 2021 following mixed data from recent studies. While we still think the drug can benefit patients and will continue to be used under its emergency use authorization from May, we expect usage to decline significantly following publication of the Solidarity data. This is particularly true as we see the landscape for alternative treatments improving, ranging from generic steroid dexamethasone (the only treatment to have shown a survival benefit) and the advancement of several other potential treatments, particularly targeted antibody therapies from Regeneron/Roche, Lilly/Amgen, and AstraZeneca.
|Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.|
Karen Andersen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.