Here's Why Gilead Sciences Is More Than Just a COVID-19 Play
Pharmaceutical and biotechnology investors are exposed to significant risk. Stocks can rise to dizzying heights after a clinical trial success, only to plummet after a single failure. Once the darling of healthcare investors, Gilead Sciences' (NASDAQ: GILD) stock is down 7.9% year to date and has lost nearly 30% of its market value since late May. The company had encountered multiple challenges unrelated to the coronavirus pandemic. The market for its hepatitis C drugs was shrinking, oncology drug Yescarta was bringing in lower-than-expected revenue, and it had few late-stage assets in the pipeline.
Despite these troubles, the stock soared in May after its antiviral drug remdesivir (Veklury) became the first therapeutic to secure an emergency use authorization from the U.S. Food and Drug Administration (FDA) for treating hospitalized patients with severe COVID-19. However, the stock fell in early August after the company released disappointing second-quarter results. The decline was further exacerbated in late August after the FDA sent Gilead a complete response letter regarding filgotinib when used in moderately to severely active rheumatoid arthritis. Disappointing interim results from the World Health Organization's (WHO) Solidarity study of remdesivir in COVID-19 patients have further added to investor worries, though the FDA granted the drug approval last week.
Image source: Getty Images.
Source Fool.com
