WASHINGTON – The shares of Gilead Sciences (trading symbol: GILD), creator of the experimental drug remdesivir, took off like a shot Wednesday morning, due to reports touting the extremely positive results of a serious new coronavirus trial in the Chicago area. The report hit Wall Street like an electric shock and stocks erupted into a brand new display of irrational exuberance that lasted throughout the trading day. Most stocks in most sectors soared from the opening bell.
Ironically, Gilead and remdesivir had been trashed trashed just last week by a tag team consisting of the so-called World Health Organization (WHO) and the media. Both alleged that remdesivir — an orphaned drug created years ago in an unsuccessful attempt to fight Ebola — had also failed to have any significant effect on the coronavirus according to an essentially anecdotal Chinese “study.” Gilead’s stock was clobbered after this “leaked” report.
First, Gilead gets trashed
Medical reporting site STAT provided the same details on this WHO report that we read in an earlier Reuters story.
“The antiviral medicine remdesivir from Gilead Sciences failed to speed the improvement of patients with Covid-19 or prevent them from dying, according to results from a long-awaited clinical trial conducted in China. Gilead, however, said the data suggest a “potential benefit.”
“A summary of the study results was inadvertently posted to the website of the World Health Organization and seen by STAT on Thursday, but then removed.
“‘A draft manuscript was provided by the authors to WHO and inadvertently posted on the website and taken down as soon as the mistake was noticed. The manuscript is now undergoing peer review and we are waiting for a final version before WHO comments on it,’ said WHO spokesperson Daniela Bagozzi.”
Reading between the lines, it’s easy to see that this was a cleverly timed, intentional leak by the heavily Chinese-influenced and largely useless World Health Organization meant to deal President Trump and the Americans another coronavirus blow. (I’ll have more to say about this in an upcoming article. I’ll post the link here when it’s up.)
The Chicago remdesivir verdict begins a new day for the drug
But now, it’s a new day for Gilead and remdesivir. Wednesday’s 180-degree verdict on the drug changed everything for beleaguered investors starved for some good news on the pandemic front. CNBC provided relevant details of the apparent breakthrough in an online report Wednesday morning.
“Gilead Sciences said Wednesday preliminary results of a coronavirus drug trial showed at least 50% of patients treated with a five-day dosage of remdesivir improved and more than half were discharged from the hospital within two weeks.
“The company also said another trial by the National Institute of Allergy and Infectious Diseases met its main goal. It did not provide further details, however.
“Later Wednesday, White House health advisor Dr. Anthony Fauci said NIAID’s remdesivir drug trial, which enrolled about 800 patients, showed ‘quite good news’ and that the drug would set a new standard of care for Covid-19 patients. Speaking to reporters from the White House, Fauci said he was told data from the trial showed a ‘clear-cut positive effect in diminishing time to recover.’
“…Gilead’s smaller clinical trial involved 397 patients with severe cases of Covid-19. The severe study is “single-arm,” meaning it did not evaluate the antiviral drug against a control group of patients who didn’t receive the drug.”
The FDA makes a surprise announcement
Later in the day in yet another surprise, the FDA endorsed the use of remdesivir in the treatment of coronavirus patients. Gilead shares continued to gain throughout the day, closing up nearly 6% and leading the market to an astonishing gain. For more details on the current study, check out the latest news posting on Gilead’s website.
Wednesday’s release of the results from the Chicago trial put WHO’s phony leak in the penalty box. That’s yet another black mark for an organization that seems largely to have interfered with an international response to the coronavirus to allow its Chinese patrons to get themselves off the hook for letting the Wuhan coronavirus get completely out of hand.
Markets rejoice on Wednesday, as tech stocks regain lost ground
As for Mr Market, for Wednesday at least, he couldn’t have been happier. Most market sectors closed up significantly, may have gotten ahead of themselves. Perhaps investors suddenly began to reimagine a renewed American economy.
Tech stocks soared once again. That was a relief for tech investors after major tech shares, like Alphabet (Google, symbol GOOG or GOOGL), Apple (AAPL) Microsoft (MSFT) and others, which got clobbered Tuesday. Oil stocks got a significant boost. The shares of well-run companies like Conoco-Phillips (COP) and refining giant Valero (VLO) enjoyed particularly strong moves.
Previously rallying tanker stocks get hit
On the other hand, tanker companies took a nose dive. They stand to benefit greatly with their vessels serving floating storage bins for the world’s oversupply of crude oil. But after an earlier rally this week, these stocks suffered a smackdown Wednesday.
Earlier this week, we jumped into positions in three of these companies: Nordic American Tankers (NAT), Teekay Corp. (TK) and Tsakos Energy Navigation (TNP), plus liquefied natural gas carriers Teekay LNG partners a couple of days ago. We have some buy or sell decisions to make here.
Mr Market may be telling us we’ll recover our economy, and all those lost jobs, sooner. Much, much sooner than the dark doomsayers on CNN and MSLSD keep telling us. The actual outcome still remains a mystery, of course. But Wednesday, at least, the optimists and the Wall Street bulls were winning. All three major averages closed significantly higher at Wednesday’s closing bell.
As we know, however, Thursday is another day. I wouldn’t be surprised to see stocks take a tumble again. That’s a pattern we’ve seen repeated quite regularly since that first, sickening market crash in March.
– Headline image: Vials of Gilead’s experimental anti-coronavirus drug remdesivir. Image via news release appearing on Gilead’s corporate web site. Fair use.