December 3, 2021

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Gilead Analysts Spar Over Leaked Chinese Data Claiming Drug Flop

(Bloomberg) — Gilead Sciences Inc. analysts offered a broad range of views on the inadvertently leaked abstract that indicated the company’s remdesivir failed to provide a benefit in a placebo-controlled trial in Chinese patients with severe Covid-19.

Skeptical analysts included Baird’s Brian Skorney, who said the negative results “should be very sobering” given the lack of an improvement and argued that the result is “pretty close to a worst case scenario.” Others on Wall Street argued that investors should hold off on jumping to conclusions.

“The bottom line is that stating the trial flopped appears overly aggressive and premature, particularly in light of Gilead’s comments,” Piper Sandler analyst Tyler Van Buren said in a note. Gilead shares tumbled 8.5% before erasing some of the losses as investors studied the leaked report.

Mizuho analyst Salim Syed was quick to point out that there are “limitations” and negatives from the leaked results, though there are “no real positives at this stage.” He is looking forward to data from Gilead’s trial in severe Covid-19 patients, which are expected soon.

Here’s what analysts are saying about the update:

Piper Sandler, Tyler Van Buren

“No one expected remdesivir to work in all patients, and antivirals are best when used early. The bottom line is that stating the trial flopped appears overly aggressive and premature, particularly in light of Gilead’s comments.”

“Have patience, let’s see the full published dataset, and more importantly, data from the higher quality Gilead severe trial to make conclusions.”

Maintains overweight rating, $90 price target.

Baird, Brian Skorney

“Results should be very sobering: no effect on clinical improvement or mortality and maybe even more concerning, no effect on PCR. If remdesivir, as an antiviral, can’t even get an antiviral effect, it’s highly unlikely there will be any role, even in earlier stage patients.”

“It is unfortunate that this program did not work out, because it is obviously what is most readily available, but this was an obvious hail mary pass attempt that didn’t work out.”

“This is pretty close to a worst case scenario as not only did the clinical effect not manifest, but there wasn’t even an antiviral effect to explore” with apparent side effect imbalance showing potential safety risk.

Maintains neutral rating, $76 price target.

Raymond James, Steven Seedhouse

“Bottom line, this Chinese controlled dataset will drive the prevailing view of remdesivir, which is that it likely isn’t working in severe patients. Gilead’s uncontrolled severe Covid-19 data expected any day is unlikely to change that.”

“We’ve been skeptical of remdesivir’s purported efficacy given it is barely effective in monkeys when used 12 hours post viral challenge and clinical reports have been uncontrolled and inconclusive.”

Maintains outperform rating.

Mizuho, Salim Syed

“Recall, this trial was terminated early due to lack of enrollment. While the study was pbo-controlled, at 237 patients prior to termination, it’s still not that large of a study and therefore the statistics coming out of the trial aren’t exactly robust.”

“Hopefully if there is no more leaked data from any institution, the next results we get should be from Gilead. Data is expected soon. These will be in severe Covid patients as well. Note this trial is not placebo-controlled, but it is randomized.”

Maintains buy rating, $81 price target.

Jefferies, Michael Yee

“This will be a setback for the elevated stock expectations recently on Rem-D but we reiterate this was the study out of China that was stopped due to low enrollment and never completed; we’ve repeatedly said Rem-D might be modestly helpful but likely not a magic bullet cure anyway.”

“The moderate study in May against a placebo may show some modest benefit but it’s not a magic cure pill.”

Maintains buy rating, $89 price target.

SunTrust, Robyn Karnauskas

“Fundamentally, as we’ve said previously, we don’t see Gilead making a profit from this drug. We do not include remdesivir in our model.”

“We see no read-through from the leaked remdesivir study from China as the study was terminated early. Because it was in severe patients, viral load may have been too high and we can’t draw too many conclusions on little data points for cross-trial comparisons.”

Maintains hold rating, $70 price target.

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