Gilead Sciences, Inc
.
GILD
recently released encouraging data demonstrating the
in vitro
activity of antiviral treatment for COVID-19, Veklury (remdesivir), against 10 SARS-CoV-2 variants, including the highly contagious Omicron.
The study analyzed
in vitro
antiviral activity by two methods to understand the susceptibility of 10 major SARS-CoV-2 variants to Veklury. Results showed similar activity of Veklury against the variants, and an early ancestral A lineage isolate detected in Seattle, WA (WA1 strain). Veklury retains antiviral activity against Omicron, Delta and other emergent SARS-CoV-2 variants in multiple in vitro studies.
Veklury directly inhibits viral replication inside host cells by targeting the SARS-CoV-2 RNA-dependent RNA polymerase. We note that Veklury was approved by the FDA on Oct 22, 2020, for adults and pediatric patients 12 years of age and older and weighing at least 40 kg for the treatment of COVID-19 requiring hospitalization. Last month, the FDA approved expanded Veklury’s label for the treatment of non-hospitalized adult and adolescent patients who are at high risk of progression to severe COVID-19, including hospitalization or death.
These latest data also suggest that remdesivir will retain antiviral activity against a new version of Omicron (BA.2 subvariant) because the viral RNA polymerase that remdesivir targets does not contain any additional unique mutations.
Gilead’s stock has lost 7.2% in the past year compared with the
industry
‘s decline of 40.4%.
Image Source: Zacks Investment Research
Veklury sales decreased 30% in the fourth quarter to $1.4 billion due to lower demand. However, demand should pick up in the ongoing quarter as Omicron is now the predominant variant.
Moreover, the FDA revised the authorizations for two monoclonal antibody treatments –
Eli Lilly’s
LLY
bamlanivimab and etesevimab (administered together) and
Regeneron’s
REGN
REGEN-COV (casirivimab and imdevimab).
Data showed that these treatments are highly unlikely to be active against the Omicron variant, which is spreading rapidly throughout the United States. Hence, the regulatory body has stated these treatments are no longer authorized for use in any U.S. states, territories and jurisdictions at this time.
Sales of REGEN-COV had significantly boosted the top line of Regeneron, and this revision will adversely impact sales for now.
Per FDA, Pfizer’s Paxlovid, sotrovimab, Veklury and Merck’s molnupiravir are expected to work against the Omicron variant. Hence, Veklury sales should increase in the current quarter.
The regulatory body also recently issued an Emergency Use Authorization (EUA) to Lilly’s bebtelovimab, an antibody that demonstrates neutralization against the Omicron variant.
Gilead currently carries a Zacks Rank #4 (Sell).
A better-ranked stock in the same space is
Vir Biotechnology
VIR
, which sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Vir Biotechnology’s earnings per share estimates for 2022 have increased $6.52 in the past 60 days. VIR beat estimates in two of the last four quarters, missing the same on the other two occasions, the average surprise being 12.95%.
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