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Can anything slow Gilead down? Analysts say no

Is there a more belovedor finickybiotech stock than Gilead Sciences? After sinking as much as 8 percent intraday on Friday, the hepatitis C drugmaker bounced back Mondayand not without much cheerleading from analysts.

Gilead Hepatitis C
David Paul Morris | Bloomberg | Getty Images

The swoon came after a Bloomberg report that Gilead planned to offer lower-cost versions of its hepatitis C pill Sovaldi to developing countries. The drug has been a lightning rod for criticism of high drug prices, at $84,000 for a 12-week course of treatmentor $1,000 a dayin the U.S. It's set a record for the speed and magnitude of its uptake, drawing $5.75 billion in its first two full quarters on the market.

Gilead's stock ultimately recovered to close down just 1.4 percent Friday, but not before setting off alarm bells across the Street.

Read MoreThe $84,000 question: Will focusing on drug prices rein in costs?

"HCV emerging market strategy fears misplaced," a note from Nomura Securities analyst Ian Somaiya was titled Monday. He recommended using any decline in Gilead's stock as a buying opportunity.

Robyn Karnauskas at Deutsche Bank also pointed out concerns over coming competition in hepatitis C and a potential "over reliance" on the hepatitis C virus franchise.

"We believe these concerns are overblown," Karnauskas wrote Friday. Her bottom line? "We'd be buyers on the weakness."

Michael Yee at RBC also defended the stock, noting the plan to make lower-cost Sovaldi available in developing countries "is nothing new and something they already do with HIV pills and already expected."

And ISI Group's conclusion? They "continue to think the stock grinds higher" into October.

Gilead has already gained 73 percent in the last 12 months, compared with an increase of 35 percent for the Nasdaq biotechnology index. Its market cap of $161 billion exceeds those of Eli Lilly and Bristol-Myers Squibbcombined.

Read MoreWhy dying kids can't get the drugs they need

So why do analysts think it's got room to run?

First, Gilead's got a PDUFA datethe date by which the Food and Drug Administration is set to make a regulatory decisionof Oct. 10 for its new combination pill for hepatitis C. Already there are signs of Sovaldi's massive sales slowing as physicians and their patients await this new regimen, which aims to cure hepatitis C without the need for injected medicines.

Sales of Sovaldi in the third quarter are tracking at about $2.5 billion, Citi's Yaron Werber wrote Friday in a research note. That's down from $3.48 billion in the second quarter, though Werber said he expects the numbers to bounce back after the combination pill is approved. He estimates the drug will post sales of $13 billion for the year.

Next, there's some fear of coming competition from AbbVie, Merck and others. Data on those regimens are expected at the AASLDAmerican Association for the Study of Liver Diseasesmeeting in November. And while analysts acknowledge those compounds look strong, Karnauskas said the approval of a competing drug and announcement of its pricing could actually remove a main overhang on Gilead's stock.

Read MoreWhy Merck's Idenix deal is bad news for Gilead

Beyond hepatitis C, the company has programs in HIV (the previous driver of its stock), cancer, cardiovascular ailments and respiratory diseases. Data on a new program in HIV are expected later this month, Karnauskas said.

Gilead is already among the 10 best performers in the Nasdaq 100 this year. So can anything slow this behemoth down? If you ask the analysts, it sounds unlikely.

—By CNBC's Meg Tirrell