Gilead Sciences' (GILD) pipeline is underappreciated, an analyst said Wednesday after the biotech giant, along with rival Novartis (NVS), gained approval for cancer treatments in Europe.
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RBC Capital Markets analyst Brian Abrahams also noted the addition of Laura Hamill as Gilead's executive vice president of worldwide commercial operations, announced Tuesday. Further, Gilead should have Phase 3 data for a rheumatoid arthritis drug "any day/week," he said.
"We believe Gilead is well-positioned long term, and expect strong commercial execution coupled with progress from its underappreciated pipeline to drive appreciation, especially once the senior leadership team is re-established," Abrahams said in a note to clients.
Cancer Treatments Approved
Both Gilead and Novartis are working on CAR-T therapies, custom-tailored cancer treatments made from an individual patient's own blood. On Monday, European regulators approved Gilead's Yescarta and Novartis' Kymriah.
Yescarta grabbed approval to treat two forms of blood cancer, both known as lymphomas. Kymriah got the nod in a type of leukemia in children and adults up to age 25. Officials approved both drugs in diffuse large B-cell lymphoma, considered a critical market.
Diffuse large B-cell lymphoma is the most common form of Non-Hodgkin lymphoma in the U.S. and worldwide. But Novartis will stave off launching for that use in Europe as it works through manufacturing issues, Abrahams said.
This "should enable Gilead to have a key head start that establishes Yescarta across key EU (European Union) centers," he said. "We currently estimate EU Yescarta sales of $130 million next year growing to more than $600 million long term."
In the U.S., Novartis' Kymriah gained approval first. But Yescarta will likely have a broader share in Europe, Abrahams said.
Key Executive Appointment
Also this week, Gilead appointed Hamill to fill a role that had been vacant since February. Hamill previously worked in Amgen's (AMGN) inflammation business. This should serve Gilead well as it expands into oncology and rheumatoid arthritis/inflammation.
This signals "Gilead's clear commitment to diversity into these spaces and confidence in its pipeline," Abrahams said.
Hamill's appointment is particularly interesting given the fact Chief Executive John Milligan will step down by year's end, Abrahams said.
It's "intriguing, indicating the board is willing to take a major decision even before new leadership comes in — and suggesting that they may still be amenable to pulling the trigger on BD (business development) initiates as well," he said.
Abrahams kept his outperform rating on Gilead stock.
On the stock market today, Gilead stock added 0.9% to close at 75.62.
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The post Why This Biotech Giant Is 'Underappreciated' Amid Novartis Rivalry appeared first on Investor's Business Daily.
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