Biotechs universally share one mission. The industry aims to prevent or cure diseases to sustain a higher life expectancy. If a biotech successfully achieves its mission, humankind, the patients suffering, and investors all experience euphoria. However, if a biotech fails to develop a viable drug then the nightmarish scenario of people suffering continues.
It seems every biotech’s mantra now is let’s treat, cure, or develop testing kits for COVID-19. One treatment company that was capturing the eyeballs of investors was Gilead Sciences (NASDAQ: GILD). During April, we saw GILD trigger bullish rallies as its wonder drug remdesivir injected optimism into the market. Unfortunately, the story is less optimistic today as Gilead released mixed COVID-19 trial results.
Gilead’s mixed COVID-19 trial results
Early today, Gilead released good and bad results for its COVID-19 phase III trial.
It was found that patients who received a five-day course of remdesivir showed promising signs of improvement. Gilead reported that 65% of patients under the five-day program improved by day 11. However, patients who were administered remdesivir over ten days showed statistically insignificant improvement.
Essentially the results highlight how remdesivir is effective against early-stage COVID-19 patients. The design of antiviral drugs is to make it difficult for viruses to reproduce. Thus, it does make sense that remdesivir is generally less effective against the ten-day course patients.
— Reuters (@Reuters) June 1, 2020
There may be good and bad news in Gilead’s phase III. However, it seems investors are focusing on the negative news: GILD is already down 3% today (at the time of writing).
What do Gileads Phase III trials mean in the Big Picture?
Phase III trials by design expose any alarming side effects, test the efficacy of the drug, and compare it with existing standards fo care.
Gilead’s trial did not highlight any safety concerns. While the remdesivir is efficacious in five-day course patients, the standard did not appear in the ten day course patients. Despite the good/bad news divide, “remdesivir resulted in significantly greater clinical improvement versus standard of care alone”.
All the data from GILD’s phase III will be peer- reviewed in the coming weeks. The peer-reviewed publication should provide investors with a clearer picture of whether we should view Gilead’s phase III results as favourable or unfavourable.
Will Mesoblast pick up the pieces?
Just like the vaccine race, the COVID-19 treatment race is starting to weed out the unfit and breed potential winners. Pluristem (NASDAQ: PSTI) and Mesoblast (NASDAQ: MESO, ASX: MSB) are also receiving significant traction for their COVID-19 treatments.
Mesoblast, a stem cell biotechnology company, is on fire right now. Investors are rallying behind Mesoblasts COVID-19 treatment (Remestemcel-l). MESO’s phase I trial resulted in an 83% (10 out of 12) survival rate. Remestemcel-L is now under Phase II trials with 300 COVID-19 patients. A pleasing survival rate could see MSB erupt like a volcano.
While COVID-19 is moving Mesoblast into the spotlight, investors must understand that success is not new for MESO. Take away the COVID-19 hype. You are then have nine drug candidates ranging from chronic lower back pain, to cardiovascular and pediatric diseases.
Mesoblast is already up 3.5% at the time of writing. Indicating confidence is building under the growing stem cell biotech.
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The information above is not 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.
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Written by Patrick Mcloughlin, Senior Manager of YIG.