Gilead Sciences (GILD) notched a first last week, when its antiviral coronavirus treatment Veklury (remdesivir) received full FDA approval.
The treatment had previously been granted emergency use authorization (EUA), but the complete go ahead from the regulatory body makes it the first treatment to make it across the finish line.
However, ultimately, Raymond James analyst Steven Seedhouse does not expect the long-awaited approval to have the impact investors might hope for.
“The formal FDA approval doesn't change our estimates or outlook for remdesivir, given it has already been branded standard-of-care prior to formal approval,“ Seedhouse said. “But the label and approval is pretty much a best case for GILD vs. what could have been post SOLIDARITY results. It remains unclear how frequently Veklury actually gets used going forward. Especially given the myriad post marketing requirements including requirement to more rigorously look at viral shedding and viral load in all samples collected and submit to FDA (which we suspect will show limited or no effect and thus offer no mechanistic support).”
Gilead stock has been on a roller coaster ride in 2020. Shares rose dramatically following the pandemic’s onset, as hopes were pinned on remdesivir to play its part in the battle against COVID-19.
However, questions about the drug’s commercial potential and contradicting clinical results, amongst other issues, have sent the share price on a downward trajectory since April’s yearly peak.
Earlier this month, the World Health Organization’s (WHO) SOLIDARITY trial concluded the treatment does not reduce the risk of a COVID-19 related death or cut the length of patients’ time spent at the hospital.
Interestingly, Seedhouse notes, the treatment’s label makes no mention of this or two RCTs (randomized controlled trials) from China. “In other words,” Seedhouse said, “The label excludes negative trials/data for remdesivir.”
Neither does the label restrict certain hospitalized patients (according to oxygen support level or the gravity of the disease) from taking the drug. The label suggests a five-day treatment (and five extra days if not recovered) for patients not on invasive O2 support, while those requiring ventilation are recommended a 10-day course.
Overall, there’s no change to Seedhouse’ rating which stays at Market Perform (i.e. Hold). (To watch Seedhouse’ track record, click here)
Currently, the analyst consensus rates the stock a Moderate Buy based on 9 Buys, 10 Holds and 2 Sells. At $79.38, the average price target suggests shares will add 32% over the next 12 months. (See Gilead stock analysis on TipRanks)
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