Does Anyone Care About Gilead's Beat, Guidance Boost?

In a report published Friday, Cowen and Company analysts maintained an Outperform rating on Gilead Sciences (NASDAQ: GILD), with a target price of $125.

Gilead Sciences reported better-than-expected 1Q results, with the EPS upside driven by robust HCV revenues. The company's 1Q HCV sales, at $4.55 billion, were significantly ahead of expectations.

Gilead reduced its net product sales guidance for 2015 from $26.0-$27.0B to $28.0-$29.0B. The company also declared its first ever quarterly dividend of $0.43 per share.

"Gilead attributed Q1's strength to an increase in patient volumes, partially offset by a higher level of rebates. The treatment volumes were driven partially by the launch of Harvoni, and partially by the relaxation of payors' restrictions on access to treatment," the analysts mentioned.

The company expects 250-300K US patients to be treated for HCV in 2015. "With the US and EU facing constraints, we expect treatment volumes to remain relatively stable through the rest of 2015. However, GILD did note that the impact of its price concessions to payors in order to open access phased in during Q1, and therefore the full impact on gross to net will be seen in Q2.," the report said.

"We suspect worries over the L-T prospects for the HCV franchise will persist. Although a re-rating likely must await pipeline or business development success, we continue to think GILD is undervalued," the analysts added.