Shares of Gilead Sciences (GILD 1.57%) rose by just over 2% Friday after the company publicized a report that used a controversial method of analysis to suggest that its experimental antiviral drug, remdesivir, greatly improves patients' chances of surviving a case of COVID-19. During the single-arm Simple trial, severe COVID-19 patients treated with remdesivir in addition to standard of care had a 62% reduction in their risk of death compared to severe COVID-19 patients given standard of care alone.
Does this comparison between two different populations mean remdesivir is on its way to becoming a blockbuster COVID-19 treatment? Unfortunately, this update raises more efficacy questions about the drug than it answers.
Gilead Sciences called the results of its retrospective analysis "an important finding that requires confirmation in prospective clinical trials." This statement's a real head-scratcher because some confirmatory data has been available since April.
A phase 3 study run earlier this year by the NIH enrolled 1,059 severe COVID-19 patients who were split randomly into groups that received either remdesivir or a placebo. At two weeks, mortality estimates were 7.1% for the remdesivir group compared to 11.9% in the placebo arm. The measured benefit wasn't strong enough to be considered statistically significant at the interim update, but we still haven't seen final mortality data from this study yet.
Investigators were able to measure a significant improvement in recovery times for severe COVID-19 patients treated with remdesivir. Despite the experimental antiviral's failure to demonstrate a significant survival benefit, the FDA authorized its use in emergencies in an effort to shorten hospital stays. More recently, the European Commission granted remdesivir conditional approval based on the same NIH study.
The lack of effective treatments for COVID-19 was a big part of the argument that earned Remdesivir its emergency use authorization, but that will lapse once there's no longer an emergency justifying it. The FDA hasn't levied any specific threats, but that EUA will be skating on thin ice as soon as some other experimental treatment in development produces more convincing efficacy results.
In the EU, where remdesivir is now marketed as Veklury, regulators have given Gilead some deadlines. By December, the company must submit final reports of remdesivir studies that include final mortality data due next month.
By the end of 2020, regulators weighing whether or not to extend emergency use access to remdesivir will probably have more than just one treatment option to choose from. That's because Regeneron (REGN 2.22%) recently began phase 3 studies of REGN-COV2, a pair of antibodies that glom on to the surface of SARS-CoV-2 to prevent it from entering host cells.
Remdesivir is a broad-spectrum antiviral that Gilead already had laying around after it failed to provide as much of a mortality benefit for Ebola patients as a rival treatment. Regeneron's Ebola candidate, REGN-EB3, outperformed several others, including remdesivir, in a 2018 phase 3 study, and the company applied the same techniques that it used to develop that treatment to its development of REGN-COV2.
More than just a coronavirus stock
If REGN-COV2 works nearly as well as it's expected to, Gilead can kiss future sales of remdesivir goodbye. That's hardly a reason to dump shares of this highly successful drugmaker, though.
Sales of Gilead's HIV treatments rose 14% year over year in the first quarter to an annualized $16.5 billion, and overall operations have generated a whopping $8.2 billion in free cash flow over the past year. Even if remdesivir sales disappear before the end of 2020, the company won't have any trouble paying (or boosting) its dividend, which it has increased by 58% over the past five years.