Remdesivir’s journey

The COVID-19 pandemic will shape several future market trends within the pharmaceutical industry – trends that we need to understand the impact of today so we can successfully navigate them in the future.

In terms of emerging macro trends, one notable impact of COVID-19 has been on the stock market within the healthcare sector, historically considered a safe haven for investors during financial crises.

At the height of the financial disruption caused by the COVID-19 pandemic, the S&P Health Care Index lost 28% against a comparable loss of 33% in the entire S&P 500 (period late February to late March 2020). However, there were a couple of outliers bucking the trend – particularly Gilead, who saw their stock rise 18% over the same time period. This was anomalous in the pharmaceutical field with many other big players advancing COVID-19 therapeutics (GSK, Sanofi, J&J) experiencing typical losses.

As investors turned their attention to Gilead, their potential anti-viral COVID-19 therapy Remdesivir began to gather scientific, political and investor momentum. The COVID-19 pandemic not only accelerated Remdesivir’s clinical data development and market availability – it magnified Remdesivir’s impact on the stock prices. Financial writers went as far as starting to frame the Gilead stock in terms of a bell-weather for US investor sentiment, with readouts of Remdesivir performance in incomplete non-peer-reviewed trials seemingly causing significant shifts in Gilead stock price.

The infographic below plots significant events in Remdesivir’s recent history to contextualize this dramatic story and the seemingly disproportionate impact one product’s journey appeared to have on the overall company stock price. Beyond this there are additional trends that the Remdesivir story indicates will be part of shaping the future healthcare and pharmaceutical landscape.

Please note: COVID-19’s impact on pharma is continually evolving. All insights expressed here were formulated based on the situation as of June 29, 2020.

Remdesivir’s journey and its impact on share price

The Deallus perspective…

Deallus expects the trend of the magnified influence of single assets investigated in COVID-19 on corporate stock will continue, at least in the near term while global financial markets are pinning their hopes on COVID-19 treatments and vaccines to reverse the economic downturn. This means companies investing in possible COVID-19 candidates need to prepare a strategy to mitigate the possible corporate impact of a single asset’s development on stock price, corporate reputation and the wider portfolio.

The relatively complex structure of Remdesivir presents a significant manufacturing challenge both in terms of synthetic chemistry and supply chain production. In response to the pandemic, Gilead acted decisively and bulk-ordered critical APIs as well as provided sourcing support to CMOs. Additionally, they shortened the Remdesivir manufacturing time from 9-12 months to 6 months by rethinking the synthetic pathway. As uncertainty reigns on the likelihood, scale, and timing of future waves of COVID-19 and the rise of protectionism, the Remdesivir story points to increasing gains in optimisation of the manufacturing process.

Gilead also contributed Remdesivir and scientific know-how to 2 US Government NIAID adaptive clinical trials, where adaptive trials covered a combined population of 2,063 patients, and to a further WHO sponsored global adaptive clinical trial.

During a global healthcare crisis, any novel COVID-19 treatment will be faced with not only pressures from increasingly strained healthcare systems but public scrutiny on a level rarely experienced. The balancing act will continue to be the tension between funding innovation and generating returns for shareholders, whilst matching Governments’ willingness and ability to invest in novel drugs. The case of COVID-19 has the potential to kick-start the economy against spiraling debts. With COVID-19 rapidly evolving we are likely to experience the continued emergence of seemingly efficacious generics (such as the oral dexamethasone with an estimated £5 cost per course), which will further impact future COVID-19 therapeutic price negotiations for innovators.

The Remdesivir story highlights the national strategic importance of access to promising COVID-19 therapeutics undergoing trial. While Gilead donated 1.5 million doses to the US government (representing their entire supply), this prompted the question of access beyond the borders of the US. As the pandemic continues and further therapeutics and vaccines are established as efficacious, pharmaceutical companies with promising candidates will face mounting pressure to sacrifice income for ethical considerations and enter into voluntary licensing schemes such as those inked by Gilead at an international and governmental level.

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    Deallus Consulting is a life science consulting firm and does not give financial advice. Therefore this article and infographic is in no way a form of advice or recommendation on the purchase or sale of equities. While we are observing changes in the Gilead stock price on the date of highlighted events, we are not implying that these events directly/solely impacted the stock price. While every reasonable effort has been made to ensure the accuracy of the data used in this article, data should be read as indicative of magnitude rather than exact figures. All data quoted has been sourced from publicly available outlets and Deallus bears no responsibility for possible data inaccuracies from third parties. All data was accurate as of June 29, 2020.

    About the author

    Julie Munch Khan, PhD, Chief Commercial Officer

    Julie is a partner and vital account leader at Deallus. She has been with Deallus for over seven years and has provided strategic marketing support for several leading brands on both a global and regional level, with expertise spanning clinical and commercial development strategies. Julie brings extensive brand plan development and life cycle management expertise, as well as personalized healthcare approaches across numerous disease areas to the team.

    Julie Munch Khan – Deallus Chief Commercial Officer

    Visit our COVID-19 pharma news hub – where over the coming months, we will highlight the emerging patterns in the pharma industry caused by COVID-19 and crucially how this may shape the market in the future.

    COVID-19 pharma news hub