• Lallic Partners

What Gilead has to offer against COVID-19

Michael Chai | April 4th 2020

Symbol: GILD

Recommendation level: 8/10

The Drug

Currently, efforts to fight the coronavirus are only basic treatments from local hospitals and solidarity trials directed from the CDC, with no official cure or vaccine released. As of today, Gilead leads the process of searching for a new drug to cure COVID-19. They are currently focusing on the antiviral drug remdesivir, with no other pharmaceutical company coming close to their findings. Already approved by the FDA, they are currently in phase three, conducting trials internationally in the UK and Gilead expects to observe the results within weeks, hopefully, less. More recently, the chief executive of Gilead, Daniel O’Day, stated that they were able to speed up the process of creating the drug from a year to six months. By October 2020, they expect to treat well over 500,000 patients, and after revising the drug they estimate to treat another 500,000 patients before the end of 2020. In the meantime, the company is establishing multiple pharmaceutical and chemical manufacturers globally, to further its production rates.

With these trials and new information come optimism from reputable titles with the World Health Organization deeming it the “most promising” candidate against COVID-19 in a recent panel. The WHO has also approved clinical trials to be held testing remdesivir, with trials being conducted by the WHO itself.

The Stock

When the first quarter of 2020 ended, the S&P 500 dropped over 20% with many blue-chip stocks falling with it. However, Gilead has remained unprecedently secure being up over 10% from last month and remaining one of the top stocks to increase during the first quarter. However, this company’s success has not diminished. As of today, their earnings per share read 4.22 which is generally a promising number, as the higher the EPS the more investors can expect in return. Comparing it to Enanta Pharmaceuticals, another company attempting a cure for COVID-19 at 1.61.

Main Takeaways

Overall, Gilead Sciences is a great, low-risk buy. The general optimism from the World Health Organization as well as the general pharmaceutical community yields it to be a promising solution to the entire COVID-19 crisis. The company itself is and will be stable because the effects of coronavirus on the market do not reach Gilead’s stock, as it is leading the fight against it.

Edited by Koki Mashita

Written for Lallic Partners

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