The past week has brought more and more indicators that Gilead’s (NASDAQ:GILD) remdesivir drug, while not a cure for the novel coronavirus, greatly lowers its fatality.
It should be no surprise that remdesivir’s effectiveness as a treatment for the coronavirus will result in Gilead stock rising far above its current levels.
Japan Approves Remdesivir and EU Approval Looks Imminent
On May 7, Gilead announced that Japan had approved remdesivir as a treatment for Covid-19. Tokyo approved the drug “under an exceptional approval pathway,” the company reported.
On April 30, the European Medicines Agency (EMA), the EU’s version of the FDA, began considering Gilead’s drug through a “rolling review program,” FierceBiotech reported.
According to the publication, “EMA’s rolling review program enables the agency to assess data on a drug as they become available rather than waiting until the applicant has gathered all the required information before starting the evaluation procedure.”
The process usually “takes around two weeks,” although it can last last for “a month or two.” But given the pervasiveness of the pandemic in the EU, remdesivir should be approved in the EU sooner than later.
Meanwhile on May 11, the EMA recommended that hospitals start using remdesivir to treat patients “who need supplemental oxygen, non-invasive high-flow oxygen devices or extracorporeal membrane oxygenation.”
Previously, the agency had recommended that the drug only be made available to patients undergoing clinical trials and those “requiring invasive mechanical ventilation.”
Multiple Positive Comments
On May 6, Stat quoted Daniel Kaul, an infectious disease physician at the University of Michigan, whose hospital did not receive Gilead’s drug as saying that, “In my opinion, and I think in the opinion of many of my colleagues, there is a complete lack of transparency about how this decision is being made and who is making it.” In other words, Dr. Kaul was upset that his hospital was not selected to get the drug.
Meanwhile, New York City Mayor Bill De Blasio told the federal government that his city “needs remdesivir.” And even more impressively, a German newspaper reported that the head of Infectiology at the University Hospital of Cologne, Gerd Fätkenheuer, stated:
“We can say: Remdesivir works. We have proven that the drug alleviates and shortens the severe course of Covid-19 disease. No major side effects have been reported to date, but these and the best possible use of Remdesivir in covid-19 patients need to be investigated further. “
Fätkenheuerm, who is leading an international study of the drug, added that “remdesivir should be easy and cheap to produce.”
Could Remdesivir Have Lowered Death Totals?
Finally, after limited supplies of remdesivir were distributed to some states the first week of May, the daily covid deaths reported by at least some of those states dropped dramatically. For example, on May 9, 10, and 11, New Jersey reported 132, 146, and 77 deaths, respectively. On most days since April 10, the state’s death totals have at least been very close to 200.
The difference was even starker in New York City; on May 10 and 11, the city reported only 47 and 19 deaths, respectively; before May 7, it had routinely reported over 100 deaths per day. Similar phenomena occurred in multiple other states; in fact on May 9 and May 10, national death totals for covid were 750 and 1,008 respectively, the two lowest daily death totals since the end of March.
It’s possible that the large declines in daily coronavirus deaths shortly after states received Gilead’s drug was a coincidence or due to other factors, but the chances of such a coincidence don’t seem particularly high.
The Bottom Line on Gilead Stock
Signs continue to mount that remdesivir will greatly help coronavirus patients. Yet Gilead’s stock has not risen a great deal, as the market continues to doubt whether the drug will be a meaningfully effective treatment. Consequently, I continue to recommend buying the shares.
As of this writing, Larry Ramer owned shares of GILD stock. Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.
