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Researchers from the University of Chicago Medicine have given a potential breakthrough showing fast recovery for 125 COVID-19 patients by using the Remdesivir drug from Gilead Sciences. GILD stock is 10% up.
On Friday, the Dow Jones Industrial Average (DJIA) jumped 3% or 700 points on positive development related to COVID-19. An industry report suggested that a Gilead Sciences (NASDAQ: GILD) Remdesivir drug has been effective in treating coronavirus patients.
Researchers from the University of Chicago Medicine said that they also saw “rapid recoveries” in 125 COVID-19 patients tested using the Remdesivir drug from Gilead as part of their clinical trials. The University of Chicago hospital reported that patients with severe COVID-19 symptoms showed much faster recoveries in fever and respiratory systems after taking the Remdesivir drug.
Gilead Sciences stock jumped nearly 10% on Friday. The price of Gilead shares has reached $83.99 amid the news about Remdesivir.
However, Gilead has cautioned that anecdotal reports don’t necessarily prove any efficacy. The company said:
“The totality of the data need to be analysed in order to draw any conclusions from the trial. Anecdotal reports, while encouraging, do not provide the statistical power necessary to determine the safety and efficacy profile of remdesivir as a treatment for COVID-19″. Thus, it added that “drawing any conclusions at this point is premature and scientifically unsound.”
Analysts Request to Maintain Caution
The news of the new drug being very effective has certainly created a huge optimism in the global community. However, it is too early to say anything concretely at this stage.
Jefferies equity analyst Michael J. Yee calls the Chicago as an “incremental positive”. But at the same time, he cautions investors with a sudden spike in Gilead stock. He expects a pullback in the near term with broader awareness in the market. Further echoing his point, Jefferies wrote:
“Similar to the NEJM publication last week, yesterday’s reports are based on one site and there is no placebo.”
Similarly, JPMorgan biotechnology equity analysts said:
“This clinical trial experience appears to represent another encouraging, albeit largely anecdotal, data point for this high-profile drug candidate.”
Besides, one more point is that the data comes from a single trial. Hence, it would be too early to jump on any conclusions said that Barclays health-care equity research team.
Dow Surges on Trump’s Go-Ahead
In addition to the positive development with clinical trials, the Dow Jones surged on Friday after U.S. President Donald Trump spoke about opening the economy back. With the coronavirus infecting nearly 7 lakh people in the U.S. a majority of the industries remain in shut down.
This has massively impacted the economic output. Earlier this week, the IMF also said that the coronavirus recession could be worst since the Great Depression of 1930. Besides, the global economy is predicted to contract nearly 3% by the end of 2020.
From the economic point of view, things look pretty fragile at this stage. While the Fed has initiated a number of measures over the last month, the demand/supply chain has taken a huge backseat. In such a case, the talks of opening the economy back has given some hope to the markets.