Gilead Sciences’ antiviral drug remdesivir is no vaccine, but it could help treat the Coronavirus while one is being developed, reports Joe Duarte.
Shares of Gilead Sciences (GILD) a global biotech leader in combating viral diseases broke out convincingly on March 6, 2020 as the market is hoping that the company reports positive results on its ongoing phase 3 trials of its antiviral drug remdesivir. Clinical trials of remdesivir in the treatment of Coronavirus are being conducted in China by the Chinese government while global trial, including patients in the United States is being conducted by Gilead (see chart).
This is purely a technical play at the moment, given the fact that all we know is that remdesivir has been proven to be effective in treatment of a handful of patients with Coronavirus as well as having acted well against the virus in vitro- test tube - studies. But the chart is very compelling at the moment with the stock taking out long standing overhead resistance near $80 on heavy volume and confirmation from On Balance Volume and Accumulation Distribution (ADI).
That said, given the fact that a vaccine, if one can be developed is likely to be available perhaps by summer 2021, Gilead seems to have the upper hand at the moment, which is what the market is betting on. Interestingly, remdesivir – which is not a vaccine as some are erroneously reporting - has been around for a while and has had success in lab tests against the SARS and MERS viruses, which are Coronaviruses (not the current Covid 19 strain). Thus, for now, GILD gets the benefit of the doubt based on remdesivir’s lab test background, the small sample of known real life successes on Coronavirus patients, and the fact that the stock has momentum. Moreover, with little else on the horizon for 18 months, barring an unexpected vaccine breakthrough, remdesivir seems to be the only show in town.
Of course, there are no guarantees, and the wait for the current clinical trial results is likely to be over by April, so the trade may not have much time left. My premium subscribers have been actively trading GILD profitably for the past couple of weeks. To subscribe for a free 30 day trial click here.
Disclosure: I own GILD as of this writing.
Joe Duarte is author of Trading Options for Dummies, and The Everything Guide to Investing in your 20s & 30s at Amazon. To receive Joe’s exclusive stock, option, and ETF recommendations, in your mailbox every week visit here. I’ll have more for subscribers in this week’s Portfolio Summary. For a 30-day Free trial subscription go here. For more direction on managing the GILD trade, go here.
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