Covid-19 Vaccine Speculators Whipsawed by Remdesivir Clinical Trial Results

The major U.S. equity stock indexes finished mixed on Thursday after a report that an experimental antiviral drug for the coronavirus flopped in its first randomized clinical trial.

What a Difference a Week Makes

On April 17, Gilead Sciences shares popped by more than 8% after details leaked of a closely watch clinical trial of the company’s antiviral drug remdesivir, showing what appears to be promising results in treating Covid-19.

The University of Chicago’s phase 3 drug trial found that most of its patients had “rapid recoveries in fever and respiratory symptoms” and were discharged in less than a week, healthcare publication STAT New reported on April 16.

“The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish,” University of Chicago infectious disease specialist Kathleen Mullane said, according to STAT News, which obtained a video of her remarks.

Gilead shares jumped as much as 16% in after-hours trading on April 16 immediately after the report was published.

Gilead didn’t immediately respond to a request for comment.

In a statement to CNBC, a University of Chicago spokesperson said, ‘Partial data from an ongoing clinical trial is by definition incomplete and should never be used to draw conclusions about the safety or efficacy of a potential treatment that is under investigation.”

But some speculators, aiming to get a jump on skeptical investors, did draw conclusions and aggressively bought shares of Gilead Sciences on the headline.

Indexes Tumble after Financial Times Reports Remdesivir Failure

Flash forward to Thursday when the major averages were taken for a wild ride during the regular session after The Financial Times reported – citing documents accidentally published by the World Health Organization – that Gilead Sciences’ drug remdesivir did not improve coronavirus patients’ condition. The documents cited by the FT referred to a Chinese clinical trial.

Gilead noted that the study was “terminated early due to low enrollment,” leaving it “underpowered to enable statistically meaningful conclusions. As such, the study results are inconclusive.”

Gilead Sciences slid as much as 9% on Thursday after STAT News reported trials of its experimental Covid-19 treatment showed no benefit for coronavirus patients. Trading of Gilead shares were temporarily halted soon after the report’s release as investors dumped the stock.

There is Still Hope for Remdesivir

CNBC’s Jim Cramer raised doubt over the trial conducted in China, advising investors to wait for results from U.S. studies before disregarding the treatment.

“I say wait until the American studies come out,” Cramer said in a tweet. “University of Chicago study is a lot more rigorous. I would stick with that. You don’t have to believe it..But this is the third time the Chinese have said the drug doesn’t work.”