(Bloomberg) -- One of Gilead Sciences Inc.’s biggest bulls says the drugmaker’s experimental therapy for coronavirus has at best a 50/50 shot at success.
Developing a treatment for the deadly virus “remains a somewhat risky, unclear opportunity,” RBC analyst Brian Abrahams wrote in a note. While the need for medicines sets the bar very low for Gilead’s remdesivir, prior disappointments in Ebola, confounding data and limited dosing results add to risks.
Investors appear to be more optimistic on Gilead’s chances given the almost $17 billion rally in its valuation since Jan. 21. If remdesivir succeeds, RBC believes the drugmaker could make $80 million to $150 million off the treatment in the near term, though more is possible given peak pandemic sales of Roche’s Tamiflu were $1.8 billion. IV administration probably will limit remdesivir to severe cases where patients are hospitalized, and it’s possible the drug may also be stockpiled, Abrahams said.
Wells Fargo analyst Jim Birchenough isn’t worried about “underwhelming” survival results for remdesivir in Ebola. He expects the medicine will meet the main coronavirus study goals of reducing fevers and driving a higher hospital discharge rate. This could add as much as $20 to Gilead’s stock price, he said. Wells Fargo has a Street-high price target of $87, $1 ahead of RBC.
The study results are expected to be made public on April 27.
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