Will Gilead Sciences Earnings Get a Boost From a Collaboration?

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Gilead Sciences Inc. (NASDAQ: GILD) is set to report its most recent quarterly results after the markets close on Tuesday. The consensus estimates are $1.67 in earnings per share (EPS) on $5.4 billion in revenue. In the first quarter of last year, the biotech giant said it had EPS of $2.23 and $6.5 billion in revenue.

Back in February, Gilead announced the collaboration of its subsidiary Kite Pharma with Sangamo Therapeutics. Specifically, Kite is collaborating with Sangamo’s zinc finger nuclease (ZFN) technology platform for the development of next-generation ex vivo cell therapies.

Under the terms of the agreement, Sangamo will receive an upfront payment of $150 million and is eligible to receive up to $3.01 billion in potential payments, aggregated across 10 or more products utilizing Sangamo’s technology, based on the achievement of certain research, development, regulatory and successful commercialization milestones.

Essentially, Kite will use Sangamo’s ZFN technology to modify genes to develop next-generation cell therapies for autologous and allogeneic use in treating different cancers. Allogeneic cell therapies from healthy donor cells or from renewable stem cells would provide a potential treatment option that can be accessed directly within the oncology infusion center, thus reducing the time to infusion for patients.

We can look for an update on this collaboration in the report coming out late on Tuesday.

Over the past 52 weeks, Gilead has underperformed the broad markets, with its stock up about 5%. In just 2018 alone, the stock is only up about 1%.

A few analysts weighed in on Gilead ahead of the earnings report:

  • Credit Suisse has a Hold rating with an $80 price target.
  • Barclays has an Overweight rating and a $95 price target.
  • RBC has a Buy rating with a $94 target price.
  • Leerink Swann has a Market Perform rating with an $80 target.
  • Mizuho has a Buy rating and a $95 price target.

Shares of Gilead were last seen trading at $72.02, with a consensus analyst price target of $89.05 and a 52-week range of $63.76 to $89.54.

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