The Food and Drug Administration just gave Gilead Sciences, Inc. (NASDAQ:GILD) investors reason to celebrate on a day that the broader markets, too, are buying the dips amid the “Brexit” aftermath.
That’s because GILD now has a new FDA-approved drug in Epclusa, a hepatitis C treatment notable for being the first drug to treat the six major forms of HCV, giving GILD a huge tailwind in the lucrative hep-c market.
Conversely, Regulus Therapeutics Inc (NASDAQ:RGLS) is taking a beating to the tune of 48% after the FDA placed its hep-c treatment on hold.
What FDA Approval Means for Gilead
Epclusa is used to treat adults with chronic hepatitis c, either with or without cirrhosis of the liver.
The Centers for Disease Control and Prevention estimate that 75% to 85% of patients with HCV become chronic sufferers. The FDA found that after 12 weeks of using Epclusa, up to 99% of chronic HCV patients had been cured of the disease.
Indeed, the response from investors and the health care industry alike has been positive. Here’s what the Mount Sinai Beth Israel Chairman of Medicine Ira Jacobson, MD, had to say:
“The approval of Epclusa represents an important step forward in the global effort to control and potentially eliminate HCV as it provides a safe, simple and effective cure for the majority of HCV-infected patients, regardless of genotype. Building on the established backbone of sofosbuvir, Epclusa demonstrated consistently high cure rates across all genotypes, including among patients with genotype 2 and 3, who traditionally have required ribavirin or other multi-pill regimens.”
According to the director of the Office of Antimicrobial Products at the FDA’s Center for Drug Evaluation and Research, Edward Cox, M.D., “This approval offers a management and treatment option for a wider scope of patients with chronic hepatitis C.”
Bottom Line on GILD Stock
Analysts have been unrelentingly bullish on GILD stock, with 16 out of the 25 analysts covering the stock rating it a “buy” or better. They’ve also set a 12-month price target of $111, which gives GILD about 35% upside, even after Tuesday’s 4.2% gain.
The latest FDA approval for Gilead comes as great news to those still salty from Gilead’s drop in hepatitis C revenue in the first quarter, which fell nearly 6% as competition gobbled market share.
Last quarter’s disappointing results concerning HCV sales sent GILD stock plummeting through the roof of its 50- and 200-day moving averages. Today’s victory for Gilead could really pay off for those who saw potential in GILD while it languished.
