Given Gilead Sciences' (GILD) leadership position in liver diseases and the significant resources that the company has devoted in the development of nonalcoholic steatohepatitis, last night's clinical setback "will likely reinvigorate" the company's willingness to augment its NASH pipeline, William Blair analyst Andy Hsieh tells investors in a research note. The analyst believes Gilead's Phase 3 failure could have a positive read-through to Viking Therapeutics (VKTX), which he notes is one of the only two beta-selective thyroid hormone receptor agonists in clinical testing. Viking's VK2809 demonstrated highly competitive data in reducing liver fat while maintaining a benign tolerability profile, Hsieh contends. Pending positive results from the company's Phase IIb study involving biopsy-confirmed NASH patients, he believes Viking Therapeutics "could emerge as a prime M&A target." The analyst keeps an Outperform rating on the shares. Viking in premarket trading is up 7% to $8.71.

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Cantor Fitzgerald lowered the firm's price target on Gilead to $75 from $78 and keeps a Neutral rating on the shares. The firm, which made slight adjustments to all of its large-cap biotechnology models ahead of Q1 earnings season for the group, lowered its target for Gilead given slower expected HIV growth. The "usual seasonal headwinds that typically make this one of the weaker quarters for the industry," the analyst added in the preview note.