How well Gilead Sciences (GILD 3.18%) does this year will inevitably depend on how effective the company's antiviral drug, remdesivir, is in treating COVID-19. If the drug proves to be a flop, the stock will fall from where it is today. However, if the treatment is effective and widespread adoption looks imminent, then Gilead's stock is likely headed skyward, hitting new all-time highs along the way.

Unfortunately, thus far, there have been conflicting results surrounding whether the drug can help COVID-19 patients. Let's take a closer look at the remdesivir results and what they mean for investors to decide whether the stock is a buy or not.

Here's how the data has shaken out

On April 23, the results of a remdesivir study in China were released to the public. And although the study didn't have enough patients to be completed, the initial results showed that for adults with severe COVID-19, remdesivir "was not associated with clinical or virological benefits." After one month, 13.9% of patients who received remdesivir died compared to 12.8% of patients in the control arm.

Gilead discounted the results. The company's spokesperson Amy Flood said the study "had too few patients" to be meaningful; just 158 patients took redesivir and 79 patients in the control group. The company also said the data suggested the drug had a potential benefit if patients used it in the early stages of COVID-19.

People working in a lab.

Image source: Getty Images.

But not even a week later, on April 29, the National Institute of Allergy and Infectious Diseases (NIAID) released data from its study which indicated more positive results for remdesivir. The study involved 1,063 patients and the results showed that using remdesivir led to quicker recovery times. Patients with COVID-19 who took remdesivir had a median recovery time of 11 days compared to 15 days for those who took the placebo. The mortality rate of 8% in the remdesivir group was also lower than the 11.6% of patients in the control group who died.

NIAID's head Dr. Anthony Fauci said, "the data shows that remdesivir has a clear-cut, significant, positive effect in diminishing the time to recovery" and that "what it has proven is that a drug can block this virus."

Why the results may be a little disappointing

Investors should disregard the study from China because the sample size is much smaller than the one from the NIAID, and it would be difficult to gain any strong conclusions from that data. COVID-19 has proven to be a volatile and unpredictable disease. Some people with COVID-19 have shown no symptoms, while others require hospitalization and in extreme cases, ventilators. Due to the disease's complexity, a large sample size is needed to get a good cross-section of patients and more balanced results.

What's disappointing isn't that the Chinese study showed no improvement but that the results from the NIAID were not definitive in showing that remdesivir stopped the virus. While the median recovery time did improve by four days, it's not the slam dunk that investors may have been hoping for to say that remdesivir can stop COVID-19 in its tracks and that it can completely prevent fatalities. But at the very least, the study was positive, and there's hope that remdesivir can reduce hospitalizations and deaths from the disease.

More definitive answers could be coming soon

The good news is that there will be a lot more data coming in the weeks ahead that will provide more insight into the drug's effectiveness. On Friday, the Food and Drug Administration gave remdesivir emergency use authorization so that it can be used to treat patients with severe COVID-19, which the agency defined as "patients with low blood oxygen levels or needing oxygen therapy or more intensive breathing support such as a mechanical ventilator." 

With more patients now able to access remdesivir, it will help give medical professionals more insight into how the drug works and which scenarios it's effective and in which it's not. And that can go a long way in arriving at some more definitive conclusions as to how useful remdesivir can be in the fight against COVID-19.

Should investors buy Gilead?

The key takeaway from the results thus far is that it's just too early to tell whether remdesivir will be a success in the battle against the coronavirus. As more patients are treated with remdesivir, there'll be more clarity as to which situations it works best in and which it doesn't. There's still a lot of optimism that remdesivir can help treat COVD-19 patients, and there's potential to make the stock one of the hottest buys of 2020.

But even without remdesivir, Gilead's still a good dividend stock to own. It pays a quarterly dividend of $0.68, which yields 3.4% annually -- more than you'd earn from the average S&P 500 stock that pays just 2% per year. Gilead's stock is up around 25% this year, as it has also outperformed the index this year, which is down 12%.

At a price-to-earnings ratio of 18, Gilead isn't a terribly risky buy today, even if remdesivir fails to live up to the hype. The company's been a safe bet to post a profit as it's been in the black in each of the past 10 years. In the past two years, its profit margin has been a very healthy 24% of revenue. 

Gilead released its first-quarter results of 2020 on April 30, which showed revenue growth of 5% from the prior-year period. And although the company's net income was down by 21% from where it was a year ago, that was largely due to higher taxes and other expenses; Gilead's operating income was 7% higher than Q1 2019.

Overall, there are good reasons to invest in the healthcare stock even without remdesivir, and that's why Gilead's still an attractive buy even if the drug fails. And if it succeeds, the sky's the limit for Gilead.