stock is falling following the latest data from its trials of remdesivir in patients with Covid-19.
Gilead said that in its late-stage clinical trials of remdesivir in patients who were moderately ill with Covid-19, those taking the broad-spectrum antiviral medication for five days were 65% more likely to show clinical improvement, compared with those receiving standard care. However, no statistically significant improvement showed in patients taking a 10-day course of the medicine.
At the end of April, Gilead released a report showing improvement in patients taking remdesivir in a government-funded trial, although a different study in China did not yield similar results. A day later, the Food and Drug Administration authorized the emergency use of the drug for Covid-19.
It’s been a wild ride for Gilead stock, as hopes for remdesivir, created to fight ebola, wax and wane. Although the shares, up nearly 20% year-to-date through Friday’s close, jumped on hopes that it could deliver an effective coronavirus treatment regimen, many analysts warned that bulls had gotten ahead of themselves, especially as the company wasn’t profiting from the drug yet. Yet others balanced estimates of what Gilead might charge for a treatment against potential supply shortages.
Disappointment among bulls looking for more solidly upbeat news in the most recent trial may be contributing to today’s slide. While the improvement in patients on the five-day course of treatment was positive, the results weren’t as overwhelming as some might have hoped, and the lack of benefit to the ten-day treatment cohort clouded the picture even more.
As Jefferies’ Michael Yee notes, “consensus already understands remdesivir is not a silver bullet.” That said, with a “statistically significant positive (but modest) result,” bulls and bears are likely to be able to pull what they like from the report.
Evercore ISI’s Umer Raffat notes that “a fair amount of critical data has not been disclosed just yet,” which could also be tempering reaction to the trail results—especially, he notes as the primary endpoint was changed from patients discharged after two weeks to improvement after 10 days.
At this point, a good deal of investor sentiment was already focused back again on the hunt for a vaccine. In addition, the most recent Gilead data is for moderately ill patients, i.e. those most likely to survive anyway. That’s less dramatic than a headline about the drug helping the patients most in danger, and while remdesivir will likely continue to be used in the fight against Covid-19, those wary that Gilead’s shares already reflected too much optimism may feel less inclined to stick around.
Gilead was down 3.9% at $74.79 at 11:02 a.m., while the S&P 500 was off up 0.1%, and the Dow Jones Industrial Average has ticked up 34.18 points, or 0.1%. The iShares Nasdaq Biotechnology ETF (IBB) has declined 0.5%.
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