The consensus estimates for Gilead Sciences, Inc. GILD appear overly conservative, especially given the prospects of remdesivir and products from the company’s recent collaboration with Arcus Biosciences Inc RCUS, according to Leerink.

The Gilead Sciences Analyst

Geoffrey Porges upgraded Gilead Sciences from Market Perform to Outperform and raised the price target from $85 to $94.

The Gilead Sciences Thesis

Remdesivir is likely to be sold for both commercial use and government stockpiles, reaching a revenue peak of $7.7 billion in 2022, Porges said in the Wednesday upgrade note.

Stockpile sales could begin by late 2021, the analyst said, adding that he expects the commercial price of remdesivir to be $5,000 per course in the U.S., $4,000 in Europe and $2,000 in other markets.

Although there is a great deal of uncertainty around the revenue and profit contribution from remdesivir, Gilead Sciences has other opportunities from the successful development of its expanded pipeline, Porges said. 

The recently announced deal with Arcus Biosciences provides Gilead with “critical mass in oncology with a diverse and synergistic pipeline, and boosts our confidence for investing in the stock long term,” the analyst said. 

Leerink raised its earnings estimates for 2020 and 2021 from $6.66 per share to $6.80 per share and from $7.01 per share to $7.74 per share, respectively.

GILD Price Action

Shares of Gilead Sciences were up 1.04% at $74.02 at the time of publication Wednesday.