Gilead Sciences (NASDAQ:GILD) has proven a bit volatile today. It swung back and forth between negative and positive before closing slightly higher, all thanks to a recent deal struck with Arcus Biosciences (NYSE:RCUS). The move didn’t mean great things for Gilead, but investors weren’t sure how far to take it.
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Reports from Gilead noted that the expansion of the research deal between itself and Arcus would actively lower earnings. Both GAAP and non-GAAP earnings per share would take the hit, measured at $0.02 for 2023. That’s largely because Gilead will offer some milestone payments to Arcus when the duo makes some discoveries. Previously, the pair worked together on oncology studies, focusing on cancer-fighting. Now, though, they’ll step things up and add inflammatory diseases to their purview.
Those inflammatory diseases, noted Gilead’s executive vice president of research Flavius Martin M.D., are often underserved in treatment and cures. This could open up a substantial new bill of business for both Gilead and Arcus, but they’re going to have to actually find the treatments first before they can start charging for them.
Currently, analysts are split on Gilead Sciences stock as a whole. Right now, there are five Buy ratings and seven Holds, making Gilead Sciences stock a Moderate Buy. However, with an average price target of $92.75, Gilead does offer investors 18.62% upside potential.
