Gilead’s Remdesivir Receives Emergency FDA Approval; Here’s What This Five-Star Analyst Has To Say - Yahoo Finance

Gilead Sciences (GILD) has announced that its remdesivir drug has received emergency FDA approval for the treatment of severe cases of Covid-19.

“It is reasonable to believe that the known and potential benefits of RDV outweigh the known and potential risks of the drug for the treatment of patients hospitalized with severe COVID-19” the FDA wrote in its approval letter to Gilead.

The decision was based on review of the topline data from the randomized, double-blinded, placebo-controlled trial conducted by The National Institute of Allergy and Infectious Diseases (NIAID) and from the Gilead-sponsored open-label trial that evaluated different durations of remdesivir.

Following the news, RBC Capital analyst Brian Abrahams commented that the approval was ‘unsurprising given [the drug’s] statistically significant benefit on shortening time to recovery in a large, controlled, government-sponsored study and strong trends on mortality.’

He notes that the FDA letter indicates that remdesivir should be directed towards "severe" hospitalized COVID-19 pts with <=94% SpO2 including those on ECMO and ventilators, as well as children with specific weight-based dosing instructions.

The Fact Sheet for physicians also suggests a course should be 5 days in non-ventilated patients, extendable to 10 days if there is no clinical improvement, and 10 days in patients on ventilators/ ECMO (extracorporeal membrane oxygenation).

“If many use the 10-day course, supply constraints between now and the fall could be more meaningful unless there is much slower disease transmission during the summer” points out Abrahams.

Interestingly, he also notes that the FDA letter indicates that distribution of the agent will be managed by the U.S. government.

“With the current inventory being provided for free and our expectation supply over the course of this year would be provided at cost, we believe GILD would only be able to profit from remdesivir for future stockpiling” says Abrahams.

However he ultimately believes that the company’s solid fundamentals deserve a buy rating and $88 price target (10% upside potential). That’s a more bullish take on the stock than the rest of the Street. Overall GILD scores a Hold consensus with a $79 average analyst price target, indicating marginal downside from the current share price. (See Gilead stock analysis on TipRanks).

Shares are currently trading up 23% year-to-date, but fell 5% in Friday's trading following the release of Gilead's first quarter earning results.

Related News:
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Is Gilead Sciences Stock a Buy Right Now? This Is What You Need to Know

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