Therapeutics. Almost as important as a vaccine in the fight against Covid-19. How to corral a pandemic? There are still many who say that they won't take a vaccine. Guess they're lucky. Maybe they have not seen this virus in action. Therapeutics? Maybe even more important than the vaccines. For one, they build upon previously attained knowledge. They get better. Secondly, people who need them, take them if they can get them. The president appears to be doing remarkably well for an overweight seventy-four year old recently diagnosed with Covid. The president was treated with Gilead's (GILD) Remdesivir, and Regeneron's (RGEN) REGN-COV2 investigational antibody combination cocktail as well as steroids to tamp down the body's immune response should it become overactive. Wish they knew about some of this back in the spring. Oh, well, I'm not here to whine. I'm here to try to make some money. The gist is that the president credited the Regeneron cocktail for his (seemingly) rapid recovery.
Since Then
Eli Lilly (LLY) had submitted an application for "Emergency Use Authorization" for its LY-CoV555 monotherapy for higher risk patients with mild to moderate symptoms, while also planning to submit for a cocktail involving that candidate combined with LY-CoV016, as there is some positive data showing that this cocktail reduced viral load by day 11. This is without noticeable negative side effects. The company expects to be able to supply up to one million doses of LY-CoV555 and 50K doses of the cocktail this quarter.
In the wake of the president's stunning physical response, Regeneron also filed for an EMU type authorization. The president has stated that he expects that both firms will get what they have applied for.
That...
Brings us back to Gilead's Remdesivir. On Thursday, it was announced that Gilead and the European Commission had signed a joint procurement agreement that will enable rapid and equitable access to the drug. The agreement includes the European Economic Area as well as the UK, and replaces an Emergency Support Instrument that was to expire this month. Gilead expects to be able to meet global demand of Remdesivir as early as this month.
That's key, because we have new data on this drug, which had been an anti-viral created prior to the pandemic meant to fight off Ebola, SARS, and MERS, so Gilead was not starting from scratch. The drug had been the first to show any efficacy against SARS-CoV-2, which is the virus that causes Covid and had received an early EMU from the FDA in the United States. The newer data, based on a 29 day study whereas the older data had been based on a 15 day study showed that treatment with this drug reduced recovery time by days versus those receiving a placebo. For patients on oxygen, recovery time was reduced by seven days. There are mixed results on mortality, but at least one does show significant improvement there too.
Questions Three, I Ask Myself
Understand something. The pharmas and bio-techs involved do not expect to make a lot of money from the development of vaccines and therapeutics meant to combat this pandemic. Many of them are cooperating, or even not enforcing patents. Perhaps this is goodwill. Perhaps they know that they have had few friends on either side of the aisle in Washington. Perhaps they just want the world to get back to something closer to normal than whatever this is. The point is, do not invest in these stocks because of what they are doing in regards to Covid.
Invest either because of their profitable portfolio, their impressive pipeline, or their technical set-up. Oh, one more thing. These companies may be winning more friends in Washington than they have had in a long time. Just saying.
1) Should I be long Regeneron?
- a) I am long, but the name is volatile. One must have a stomach for it. Great company. Technically. Needs to hold onto the 50 day SMA.
2) Should I be long Eli Lilly?
- a) I am not, but I should have been, and still might be real soon. The stock is breaking out, and could certainly make another run at $170.
3) Should I be long Gilead Sciences?
- a) I was. Early in the pandemic. Made my money and got out. Truth is that even though trading higher today, this name needs to take the 50 day SMA, and then make a run at the 200 day.
Let's zoom out a little...
Long term support is between $59 and $61. I would be much more comfortable getting back in this name closer to $60 than where it trades today. I believe that Regeneron and Eli Lilly are higher quality names, and Eli Lilly is priced better for the retail investor. Just my opinion.
