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Is Gilead shopping to bolster pipeline?
Posted 27 June 2017
An uptick in the Gilead Sciences share price last week has fuelled speculation the company may be reaching into its reported US$14.1 billion war chest with a specific target in mind.
Gilead shares have been in rapid decline for the past year due to what the market sees as a looming bottom for its booming hepatitis C drugs and a lacklustre pipeline.
Its share price was slashed by almost half between June last year and early June this year, dropping to a low of US$64.12.
Then last week the unexpected happened - the share price began to rally, climbing 10 per cent throughout the week to close at US$70.52.
Although investment chatter is still predominantly negative, some analysts suggested the surge could be a sign the HCV/HIV biopharma company had finally identified a takeover target that would bolster its uninspiring pipeline.
Gilead's hepatitis C portfolio has proven to be a huge winner for the company but as sales of lead drugs Sovaldi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir) fall in major jurisdictions, the market is edgy that there is little waiting to take their place.
Analysts have been predicting that Gilead will need to make an acquisition if it is to fatten its pipeline sufficiently to allay market fears. And with it reportedly sitting on a US$14.1 billion nest egg, the market is hyped that the buy may be soon.
"Somebody clearly thinks they know something, and they're putting their money where their mouth is," speculated Small Cap Network editor James Brumley. "My best guess is it's driven by speculation that Gilead is finally going to deploy some of its cash."
Most analysts are waiting for the company's Q2 results before making a decision as to whether or not to recommend investing in Gilead.
"Gilead's HCV sales are falling," Brumley said. "Its pipeline is ok, but not exactly thrilling. The only path to respectable growth it has from here is to purchase it, but that's nothing unusual in the world of biopharma."
Megan Brodie
megan.brodie@lushmedia.com.au
Posted 27 June 2017
An uptick in the Gilead Sciences share price last week has fuelled speculation the company may be reaching into its reported US$14.1 billion war chest with a specific target in mind.
Gilead shares have been in rapid decline for the past year due to what the market sees as a looming bottom for its booming hepatitis C drugs and a lacklustre pipeline.
Its share price was slashed by almost half between June last year and early June this year, dropping to a low of US$64.12.
Then last week the unexpected happened - the share price began to rally, climbing 10 per cent throughout the week to close at US$70.52.
Although investment chatter is still predominantly negative, some analysts suggested the surge could be a sign the HCV/HIV biopharma company had finally identified a takeover target that would bolster its uninspiring pipeline.
Gilead's hepatitis C portfolio has proven to be a huge winner for the company but as sales of lead drugs Sovaldi (sofosbuvir) and Harvoni (sofosbuvir/ledipasvir) fall in major jurisdictions, the market is edgy that there is little waiting to take their place.
Analysts have been predicting that Gilead will need to make an acquisition if it is to fatten its pipeline sufficiently to allay market fears. And with it reportedly sitting on a US$14.1 billion nest egg, the market is hyped that the buy may be soon.
"Somebody clearly thinks they know something, and they're putting their money where their mouth is," speculated Small Cap Network editor James Brumley. "My best guess is it's driven by speculation that Gilead is finally going to deploy some of its cash."
Most analysts are waiting for the company's Q2 results before making a decision as to whether or not to recommend investing in Gilead.
"Gilead's HCV sales are falling," Brumley said. "Its pipeline is ok, but not exactly thrilling. The only path to respectable growth it has from here is to purchase it, but that's nothing unusual in the world of biopharma."
Megan Brodie
megan.brodie@lushmedia.com.au
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