Gilead Sciences shares halted after 'positive data' from clinical trial

Shares of US biotechnology outfit Gilead Sciences were halted after the company notified markets that "positive data" were emerging from a clinical trial being conducted by the US government's National Institute of Allergy and Infectious Diseases for the use of its Remdesivir treatment against the Covid-19 coronavirus.

The company said it "understood" that the trial had met its so-called 'primary endpoint' with detailed information set to follow at a briefing from NIAID boss Dr.Fauci scheduled for later in the day.

In a separate announcement, the outfit said that another clinical trial into the relative benefits of five or 10-day dosing with Remdesivir had shown that the two groups of patients who participated in that company-sponsored study had shown a similar level of clinical progress.

Commenting on the implications of the second trial, Gilead's chief medical officer, Merdad Parsey, said: "These study results complement data from the placebo-controlled study of Remdesivir conducted by the [NIAID] and help to determine the optimal duration of treatment with Remdesivir.

"The study demonstrates the potential for some patients to be treated with a 5-day regimen, which could significantly expand the number of patients who could be treated with our current supply of Remdesivir. This is particularly important in the setting of a pandemic, to help hospitals and healthcare workers treat more patients in urgent need of care."

Analysts from Makor Securities labelled the news out of the biotech giant "encouraging" given recent negative news coverage around Remdesivir.

Nonetheless, they believed financial markets were already discounting that Remdesivir would show some degree of efficacy and obtain approval from the Food and Drug Administration.

Furthermore, the drug remained "difficult to administer, unpleasant to receive, and won’t halt transmissions (it’s not the medical silver bullet some are making it out to be).

"This news will cause a positive knee-jerk reaction in markets, but investors are still advised to phase the SPX."

For their part, analysts at RBC Capital Markets said: "The data suggest remdesivir is likely approvable and should have a role in certain corona subpopulations, which based on recent trading patterns on remdesivir news we believe should send GILD shares back well into the $80s or higher, even with near-term monetization for GILD remaining unclear.

"Remdesivir effect size details will be key and we would not anticipate based on prior data it will necessarily be dramatic, but any benefit should contribute to helping manage the ongoing crisis."