For financial markets already whipsawed by shutdowns that collapsed the global economy, a new reason for jitters has emerged — the dim prospect that economies could reopen thanks to treatments for Covid-19.
But analysts warn that investors risk latching on to fragmented data, sending shares sharply higher on what would normally be seen as inconclusive or ambiguous disclosures.
On Friday a trade publication report that Gilead Science’s remdesivir drug was performing well on a handful of seriously ill Covid-19 patients at the University of Chicago Medicine sent shares up as much as 11 per cent — even though it was not part of randomised controlled study.
And it is not just therapies that are proving irresistible. Roche, the Swiss pharmaceuticals company, said on Friday that it was launching an antibody test that would help health professionals test whether people have had the virus or not. Shares in Switzerland-listed Roche rose 2 per cent to SFr324.8.
“The latest surge for stocks shows just how keen the market is to react to any piece of good news amid the current crisis,” said Russ Mould, investment director at AJ Bell.
The Gilead price surge came after video footage leaked to industry publication Stat news in which an infectious disease specialist running the trial said many patients taking the antiviral were recovering and being discharged quickly.
The news buoyed the S&P 500, which closed up 2.7 per cent, as investors look for signs that better treatment options could embolden governments to open up locked-down economies.
But Gilead and the University of Chicago Medicine both cautioned that the data were incomplete and the trial’s full results were needed before drawing conclusions.
Umer Raffat, a biotech analyst at Evercore, noted that without a control group, the remdesivir trial should be viewed with a sceptical eye rather than a “silver bullet”.
Still the news sent Gilead shares 9.7 per cent higher by the close in New York.
“This seems a generous amount of credit for a product that the company has specifically stipulated will not be sold for a profit,” said Geoffrey Porges, an analyst at SVBLeerink, who estimated that hopes for remdesivir had already been responsible for adding $15bn in market cap to Gilead, even before Friday’s gains.
“Investors may be discounting that commentary, or simply looking to buy any positive Covid news,” he added.
Roche’s Elecsys serology test will be available in early May in Europe and other countries that accept the CE mark accreditation. Roche is applying for an emergency authorisation from the US regulator. Abbott Labs and BD, both based in the US, have already launched antibody tests.
The US government also expanded its commitment to creating drugs and vaccines to tackle coronavirus, with the National Institute of Health launching a public-private partnership, working with 16 pharmaceutical and biotech companies. The group will work to prioritise the right vaccines and drugs, streamline clinical trials and co-ordinate on regulation.
Francis S Collins, director of the NIH, said: “Now is the time to come together with unassailable objectivity to swiftly advance the development of the most promising vaccine and therapeutic candidates that can help end the Covid-19 global pandemic.”
Additional reporting by Clive Cookson in London