Gilead Strikes Deal with CVS, Hits Back AbbVie
Uri Gruenbaum | Jan 06, 2015 05:13AM ET
Gilead Sciences (NASDAQ:GILD) took a hit a few weeks ago when healthcare provider Express Scripts (NASDAQ:ESRX) chose AbbVie’s (NYSE:ABBV) hepatitis C drug over that of Gilead’s for exclusive distribution to its 25 million subscribers. Gilead produces Harvoni while AbbVie produces Viekira Pak, and the two compete as therapies for hepatitis C. Since January 1st, Express Scripts beneficiaries have only been able to purchase AbbVie’s Viekira Pak.
However, the tables turned yesterday on January 5th when Gilead made a deal with CVS Health Corp. Gilead and CVS reached a deal in which CVS will exclusively offer Gilead’s hepatitis C drugs. Gilead’s Harvoni will be on CVS’s preferred drug list and accessible for customers using the Affordable Care Act, Medicaid, and parts of Medicare. CVS customers will be able to finish current regimens of Viekira Pak but will need prior authorization to continue its use in the case of medical exceptions.
Analyst Robyn Karnauskas of Deutsche Bank weighed in, noting that Express Scripts controls about one third of the US pharmacy while CVS controls slightly less. Karnauskas reiterated a bullish rating on Gilead on January 5th with a price target of $125. She has a 71% overall success rate recommending stocks from the past year with a +13.0% average return per recommendation.
On average, the top analyst consensus for GILD on TipRanks is Moderate Buy.
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