NEW YORK -
A Friedman, Billings, Ramsey analyst on Tuesday raised his price target on HIV drug maker Gilead Sciences Inc., saying changes to regulatory guidelines could leave the company's Truvada drug as the only preferred treatment in the category.
FBR analyst Jim Reddoch lifted his price target to $57 from $54 and maintained his "Outperform" rating on the stock. After hosting a conference call with a leading HIV expert, he believes negative hypersensitivity data on rival drug Epzicom may drive Health and Human Services to remove the drug from its current prescription guidelines.
As a result, 10 percent to 15 percent of GlaxoSmithKline (nyse: GSK - news - people ) PLC's Epzicom and Trizivir prescriptions could shift over time to Truvada, a combination of Gilead's Viread and Emtriva medicines.
"Furthermore, early diagnosis efforts by the Centers for Disease Control and SMART study results, which showed it is better to put AIDS patients on HIV anti-retroviral therapy earlier rather than later, are both background tailwinds to Gilead's HIV franchise," Reddoch wrote in a note to clients.
Reddoch raised his U.S. Truvada sales estimates by roughly 7 percent through 2011, with 2008 U.S. sales now forecast at $927 million instead of $866 million. He also thinks there could be more upside to estimates based on results of the AIDS Clinical Trials Group trial, due out later this week.
Gilead shares dipped 57 cents to $48 in morning trading. Over the past year, the stock has ranged between $34.15 and $49.05.
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