Please ensure Javascript is enabled for purposes of website accessibility

Why Gilead Sciences Stock Is on Fire Today

By George Budwell – Updated Apr 16, 2020 at 5:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Its COVID-19 treatment could be a game changer.

What happened

Shares of the large-cap biotech Gilead Sciences (GILD -0.76%) jumped by as much as 16.1% in after-hours trading Thursday afternoon. The biotech's stock leaped higher after an encouraging report by the science and medical news website STAT suggesting that Gilead's antiviral medication remdesivir may be effective at treating patients hospitalized with severe cases of COVID-19. 

While the preliminary data shouldn't be taken as gospel by either patients or investors, these initial results are impressive nonetheless. In one trial by the University of Chicago Medicine, for instance, researchers reported that the vast majority of patients treated with remdesivir were discharged in less than a week, and only two patients died during the study.  

A woman wearing a facemask while staring out of a window.

Image source: Getty Images.

So what

If the remaining study results are equally as noteworthy, Gilead should have a strong case for a historically quick approval for remdesivir in the United States, and perhaps in several international territories as well. The Food and Drug Administration has already signaled that it is willing to green-light a viable COVID-19 treatment in record time.

The big deal from an investing standpoint is that an approval should land Gilead a multibillion-dollar payday. While remdesivir's price point probably won't be as rich as Gilead's other antiviral medications, there should be more than enough demand to push this drug into blockbuster territory (sales greater than $1 billion per year) within a few short months. 

Now what

The full results from this late-stage trial should be released any day now. As such, biotech investors will definitely want to keep a close eye on this rapidly developing story. 

George Budwell has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Gilead Sciences Stock Quote
Gilead Sciences
GILD
$64.95 (-0.76%) $0.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.