J.P. Morgan Overweight On Gilead Sciences After Meeting With Management

J.P. Morgan Chase & Co. has an Overweight rating and a $45 price target on shares of Gilead Sciences GILD. In a note to clients, J.P. Morgan writes, "We recently hosted an investor meeting with Gilead in San Fran with John Milligan (President and COO), Robin Washington (CFO) and Kevin Young (EVP Commercial). Overall, the meeting was productive with a favorable tone going into meaningful 2H11 events (TMC-278/Truvada PDUFA: Aug 10; QUAD data). These pipeline assets are clearly differentiated relative to Atripla according to an HIV doc (Dr. Raphael Landovitz from UCLA), who participated in our "Day with Docs" in LA this week (see accompanying note). In terms of Gilead's core HIV franchise, demand trends remain solid and driven by: 1) increasing diagnosis rates (new screening initiatives launched in 10 cities in 2010), 2) DHHS guideline changes from Dec 09 (CD4 counts at initiation in 2010 of 318, versus 290 in 2009) and 3) emerging data such as the HPTN Study 052 for HIV prevention (May 12). ADAP purchasing trends were also a focus of the meeting; there is expected to be a partial recovery in 2Q, but a full recovery is more likely in 2H11 with greater clarity on state budgets expected in June. Consensus may have to come down a touch as it implies a snapback in 2Q WW HIV sales (+6% q/q growth; JPMe: +2%), but it is worth noting that IMS data do show monthly sales up 5.6% in the US so far. Either way, 2Q performance will be less relevant given closer proximity to major clinical / regulatory events in 2H11 that directly address terminal value concerns. Gilead remains a Top Pick in large cap biotech in 2011." Shares of GILD gained 14 cents yesterday to close at $41.42, a gain of 0.33%.