These analysts are skeptical of Gilead’s coronavirus treatment ahead of studies results

Global biopharmaceutical giant Gilead Sciences (NASDAQ: GILD) is scheduled to release late-stage results from a study of its potential coronavirus therapy called remdesivir this month, but two analysts said Tuesday they think results could disappoint.

What is remdesivir?

Remdesivir is Gilead’s antiviral therapy that was successfully used to treat Ebola and has seen anecdotal success in treating coronavirus patients across the world. The company has two clinical trials to determine the safety and efficacy of remdesivir as an approved treatment for coronavirus in China.

Results from China are scheduled to come out at some point in April while data from U.S. patients are likely to come out in May.

Remdesivir is one of a few potential treatments that scientists across the world are evaluating. One of the other treatments, Hydroxychloroquine, is gaining more media spotlight after U.S. President Donald Trump said it is a potential “game-changer” in the battle against the virus.

Investors seem to be betting on Gilead succeeding in the race to find a potential cure as shares hit a two-year high in early March but have traded mostly flat since then.

Baird’s Skorney: ‘certain level of skepticism’

Baird analyst Brian Skorney said on Tuesday’s CNBC’s “Closing Bell” he has a “certain level of skepticism” as the core purpose of the drug is not meant to target symptoms of the coronavirus. On the contrary, the therapy was designed to target the inhibition of replication of the Ebola virus.

Assuming remdesivir is a cure for coronavirus is “a lot of wishful thinking” and everyone including the analyst himself hopes he is wrong. The unfortunate reality is there are few examples of a therapy designed to treat one serious illness that also “works really well” in treating another illness.

Barlcays analysts appear to be just as skeptical and are modeling a 20% chance the two studies from China will succeed, according to a Tuesday Bloomberg report. Adding to the complexities, in the event Gilead succeeds in its studies, it will face what the research firm describes as “commercial realities.”

The biopharma company will then need to resolve a difficult manufacturing process along with challenges associated with pricing and selling a proven therapy to treat a global pandemic, Bloomberg noted.

All hope not lost

The vast majority of people who recover from the coronavirus do so without the need of any sort of treatment, Skorney also said on CNBC. So far, there has been no formal data on controlled studies which makes it more difficult to model a successful treatment.

Skorney acknowledges he is not a medical doctor or a scientist, rather a trained equity researcher and analyst. As such, his job requires a focus on available data and existing knowledge of the realities of pandemics.