Shares of Gilead Sciences (NASDAQ:GILD) are up 17% so far this year, well ahead of the S&P 500, which is down 12%. But whether that trend continues and Gilead remains on that strong trajectory is still a question mark. There's a lot of potential for the stock to rise sharply in value or crash this year as how well the stock does this year will depend to a great degree on remdesivir.

Investors won't have to wait long to find out which direction Gilead's stock will go this year as the next month will set the stage for how the stock will perform from here on out.

It'll soon be clear how effective remdesivir is in treating COVID-19

How Gilead's stock will do this year will hinge on the success of remdesivir. There's a lot of hope that the drug can help treat patients with COVID-19 and not only prevent deaths, but also reduce recovery times as well, thereby reducing the load on hospitals.

The problem is that the results thus far have been mixed. A Chinese study, which was limited in its insight because it only involved 158 patients, found that patients who took remdesivir didn't fare any better than those who took the placebo.

Prescription pills spilled out from a bottle

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However, the National Institute of Allergy and Infectious Diseases conducted a larger study of 1,063 patients, and it found that patients who used remdesivir recovered four days quicker than those who took the placebo. The mortality rate was also a bit better, with 8% of patients taking remdesivir dying from COVID-19 compared to 11.6% when patients took the placebo.

But even the larger study is still fairly modest given how complex and unpredictable COVID-19 has been thus far. In the coming month, the public should have more solid answers about how effective remdesivir is. That's because on May 1, the Food and Drug Administration issued emergency use authorization of remdesivir for patients with severe cases of COVID-19.

Gilead has started distributing remdesivir out to hospitals, and once doctors administer the drug to COVID-19 patients on a wide scale, there will likely be little doubt as to how effective the drug is in treating the disease. Although the distribution of remdesivir hasn't been optimal thus far, with states not receiving nearly as much of the drug as they had hoped for, there could soon be enough doses to treat close to 10,000 COVID-19 patients throughout the country. There are currently more than one million active cases of COVID-19 in the U.S.

While not all COVID-19 patients will end up receiving remdesivir, it'll still be a much larger sample size than the previous studies. And that will help doctors and scientists ascertain whether the drug does improve recovery times on a consistent basis and how much of an improvement there is in the mortality rate.

One of the limitations with small studies is that other unknown factors can skew the results. A larger sample size can normalize those results and provide more clarity. And in the coming weeks, as patients start to receive remdesivir, health officials will have more information and can begin to observe the effectiveness of remdesivir closely to see how many patients are doing better because of it.

Why it's likely the stock will see a big jump once there's a concrete conclusion on remdesivir

The success or failure of remdesivir will make or break Gilead's share price this year. If health officials endorse the drug and say it's effective in treating COVID-19, that could send Gilead's stock soaring well past $100. After all, if remdesivir becomes the drug of choice, and doctors used it to treat COVID-19 patients, there will be no shortage of demand: There have been more than 4.5 million cases of COVID-19 around the world.

And with the potential for there to be a second wave of coronavirus that may hit in the fall, there could be an ongoing need to treat the illness until a vaccine is made available, which may not be for at least another year. Remdesivir could generate revenue related to COVID-19 for Gilead for multiple years, which would inevitably make investors more bullish on the stock. Any revenue growth would be valuable for Gilead as the company's top line was flat in 2019, and sales were down 14% from where they were two years ago.

On the flip side, if remdesivir proves to be a flop and doesn't have encouraging results to report, the healthcare stock could end up giving back the gains it's achieved this year, and a 15% to 20% drop may not be all that unlikely. Investors have likely priced the optimism surrounding the drug into Gilead's share price already. And without remdesivir, investors could be left with just a stock that's growing at a low rate and that's only been paying a dividend for five years. While it can still be a solid long-term buy for investors who value stability, the stock will lose a lot of steam if remdesivir fails and the hype and excitement will wane.

The good news for investors is that they won't have to wait much longer to find out which of these two scenarios will likely play out this year.