The Dow Jones rallied upwards of 700 points on Friday as Gilead’s (NASDAQ:GILD) “Wonder Drug” has shown promising results according to a Chicago University source. The video of Infectious Disease Professor Kathleen Mullane, goes into some detail over the success of Remdesivir in recent trials with patients reporting fast recoveries from COVID-19. Now if you aren’t subscribed to us, you may not have been aware of the official Trial results released on the 10th of April. These results saw 68% of patients using Remdesivir, see improvements over the 18 day period. The full trial data can be accessed below:
— Gilead Sciences (@GileadSciences) April 10, 2020
Last week, I specified that these trials hold enough momentum to push Gilead to $80-$85 – now priced at $83.99. Our projections were correct however we are still anticipating the results of 400+ severe COVID-19 patients on Remdesivir late next week. From what we know these results are likely to be positive, therefore we are forecasting Gilead to hit $90-$95 by the end of April (forecast not advice). The biggest asset Gilead currently yields is their embedded roots into the US healthcare system as well as boasting a $105 billion Market Cap. The more evidence we see of Remdesivir’s effectiveness, the faster the US Government will advance Gilead’s set Trial dates. Trial result dates can be accessed here.
How long will this optimism last?
Some Investors believe that until we find a vaccine or treatment, the markets will never truely recover. However, it does seem ridiculous that one leak of information over a 400 patient trial could drive the market up 3%. Gilead is definitely onto something significant, however Gilead will still be trialling Remdesivir in July this year. The US rally seems premature for what is a realistic expectation for this drug. This factor will definitely impact GILD’s share price as short-term investors lose patience and another drug takes over with a better survival rate. For example, we published an article to our readers on Thursday regarding Pluristem having a 100% survival rate with their stem cell treatment.
Gilead’s trial results released next week will boost the price of the stock (opinion). However, long term shareholders may become concerned with GILD attracting more speculative investors ready to dump the stock if trial results cave-in. These are all things we think are important to understand before buying into COVID-19 related Biotechs.
Gilead is leading the charge in producing an effective treatment for COVID-19 patients. From what we have seen in previous trials as well as what Kathleen Mullane discussed – Gilead is forecasted to hit $90-$95 by the end of the month as official results release next week (research not advice). Lastly we see this optimism as short lived. Gilead’s stock price will be at risk to speculative investors and other treatments yielding a higher success rate.
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Tyger Fitzpatrick, Founder of YIG.