Investors watched in horror as shares of the world's largest biopharmaceutical companies tumbled during the first quarter of 2020. However, thanks to some swift action when the novel coronavirus was still just a blip on the radar, Regeneron (NASDAQ:REGN) and Gilead Sciences (NASDAQ:GILD) did more than avoid the COVID-19 carnage -- their stock prices soared.
In mid-March, The iShares U.S. Pharmaceuticals ETF was down more than 25% from where it started 2020 and it's still down 5.9% on the year. But investors flocked to Regeneron and Gilead because it was clear they had already started digging tunnels through the mess that lay ahead.
On March 17, Regeneron announced efforts to develop a combination of antibodies for the treatment of COVID-19 or to prevent its transmission altogether, and the biotech's recent track record is impressive. The FDA recently accepted an application to treat the Ebola virus with REGN-EB3, an antibody cocktail that showed strong evidence of efficacy in a head-to-head study with other experimental Ebola treatments.
Will their plans come together?
Gilead Sciences' stock soared because it had a broad-spectrum antiviral candidate called remdesivir ready to put into human trials against SARS-CoV-2 while all of its peers, Regeneron included, were still selecting candidates to begin pre-clinical testing. Before getting too excited, though, it's worth remembering that remdesivir was tested against Ebola in the same clinical trial as REGN-EB3, and Gilead's drug produced fairly disappointing results.
An early peek at data from a controlled clinical trial that was halted before it could be completed suggests remdesivir didn't improve outcomes for COVID-19 patients. Gilead was quick to point out flaws in the unpublished paper. By contrast, healthcare industry news website STAT last week reported that the section of Gilead's ongoing remdesivir trial being conducted at University of Chicago Medicine had seen very promising results.
Given the conflicting studies, it's likely too soon to come to any conclusions about the experimental antiviral drug.