What happened
Shares of Gilead Sciences (GILD 0.79%) rose 18.4% the first half, according to data provided by S&P Global Market Intelligence, as hospitals began using its drug remdesivir to treat COVID-19 patients.
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Early into the health crisis, Gilead began testing remdesivir as a possible treatment for the illness caused by the novel coronavirus. The antiviral initially had been studied in other coronaviruses -- severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS). More recently, remdesivir entered clinical trials for COVID-19, and as promising data emerged, the U.S. Food and Drug Administration granted the drug Emergency Use Authorization.
So what
All eyes around the world have been turned to companies working on COVID-19 treatments and vaccines. That's because a cure for the illness doesn't yet exist, and the pandemic has resulted in 10 million cases and more than a half a million deaths worldwide.
Though Gilead predicts its investment in remdesivir will surpass $1 billion by the end of this year, the company may recoup costs and eventually generate revenue as nations stockpile the drug. Gilead donated its initial supply of remdesivir and now is transitioning into selling the treatment. The company set a price of $390 per vial, which (as six vials are needed for a full treatment) results in a total cost of $2,340.
Now what
Clinical trials have demonstrated remdesivir's ability to help patients recover faster. A phase 3 study of the drug in hospitalized patients with moderate illness showed patients given remdesivir for five days were 65% more likely to show clinical improvement on day 11 than trial participants receiving standard care.
The FDA hasn't yet approved remdesivir for general use. The Emergency Use Authorization is temporary and may be revoked at any time. Researchers are currently studying remdesivir in more than 20 active or recruiting clinical trials worldwide. Now, as trials continue, Gilead is gathering data that it hopes will eventually support a regulatory approval. The European Commission granted remdesivir conditional marketing authorization for the treatment of COVID-19, Gilead said in a July 3 statement.
Strong evidence of remdesivir's efficacy in treating the virus and FDA approval are essential for Gilead to maintain a leading role in the COVID-19 field and generate long-term revenue from remdesivir. Any positive trial news is likely to drive the shares higher in the coming months. And finally, the FDA is reviewing Gilead's rheumatoid arthritis drug candidate, filgotinib, and a decision may come at any moment. That also may provide direction for shares of the biotech company.
