Gilead's FAKE news... or, rather, the market's current recognition of it as such... has been very good for my three PSTI purchases. All are well into the black now even though the first two were deep red at one point. The cheapest shares are now up 20 percent.

April 20, 2020

Gilead: New Remdesivir Data Set Up A Potential Short Trade

by Biotech Beast
SeekingAlpha.com

Summary
• An "early peek" at data from GILD's US/international study of remdesivir in COVID-19 has the market excited, GILD is trading up.

• I don't think the numbers are exciting. We need to wait for results from these trials.

• Chinese studies of remdesivir have stalled and the mild/moderate COVID-19 study of remdesivir may not have enrolled many patients at all.

Gilead Sciences (GILD) has traded up following reports about patients in GILD's trials of remdesivir for COVID-19. On closer examination, there is no reason to be quite so bullish and validation of the efficacy of remdesivir might not be as close as we might hope.

What started the rally?

On Thursday, April 16, STAT put up an article by Adam Feuerstein and Matthew Herper providing some details about what was being seen with remdesivir in COVID-19 patients at a Chicago hospital participating in GILD's US trials. These details weren't officially from GILD via press release, but came from a video of a discussion between Kathleen Mullane, a researcher at the University of Chicago involved in the studies, and other faculty members at the university. I'm inclined to trust the source here even if that video isn't available, but I am not inclined to believe the numbers offer proof of efficacy for remdesivir.

The University of Chicago Medicine recruited 125 people with Covid-19 into Gilead’s two Phase 3 clinical trials. Of those people, 113 had severe disease. All the patients have been treated with daily infusions of remdesivir.

“The best news is that most of our patients have already been discharged, which is great. We’ve only had two patients perish,� said Kathleen Mullane...

Excerpt from the STAT article available April 16, 2020.

What is the problem?

I can certainly understand the initial excitement on this news. Two deaths from 113 patients (1.8%) sounds lower than usual for severe COVID-19, right? We generally hear low-to-mid single digit percentages for the case fatality rate (CFR) for COVID-19 overall. The problem is that the CFR that is reported seems to vary and is sometimes difficult to calculate.

The difficulty is commonly knowing how many cases there actually are, the denominator in the formula above. Someone who is asymptomatic or has only mild symptoms may never realize they had been infected with SARS-CoV-2. The good news with GILD's studies is you know the number of cases, and from this "early peek" at the data, we have heard there were 113 severe cases in the trial at the Chicago site, at the time of the video which STAT discussed. Great. The problem? If you want to take a CFR from that, and say that it provides evidence remdesivir works, then you have to compare it to a CFR you've heard somewhere else. Not so great.

On March 27, The Lancet Infectious Diseases published correspondence from a group of researchers in Singapore (Rajgor et al.) who noted the complexities of estimating the COVID-19 CFR, and how it seemed to vary over time. Rajgor et al. also noted the CFR seen on the Diamond Princess, an example which is particularly illuminating.

Among individuals onboard the Diamond Princess cruise ship, data on the denominator are fairly robust. The outbreak of COVID-19 led passengers to be quarantined between Jan 20, and Feb 29, 2020. This scenario provided a population living in a defined territory without most other confounders, such as imported cases, defaulters of screening, or lack of testing capability. 3711 passengers and crew were onboard, of whom 705 became sick and tested positive for COVID-19 and seven died, giving a CFR of 0·99%. If the passengers onboard were generally of an older age, the CFR in a healthy, younger population could be lower.

Excerpt from Rajgor et al., published online March 27 2020, Lancet Infect Dis.

A CFR of 0.99% seems lower that what I have been hearing, so I checked the latest World Health Organisation (WHO) data on the Diamond Princess, to find that the number of deaths has now increased from seven to 12, despite the fact that the number of cases has increased only from 705 to 712 (indeed the WHO data says there has been no new reported cases in 31 days). The jump from seven deaths to twelve deaths appears to have occurred through March, more recently, on April 14, a 13th death has been confirmed.

Table 1: World Health Organisation on COVID-19 cases, fatalities. Table below is a splice of two images to remove the many countries/territories/areas which are not the focus of this comparison. Full table spans many pages and can be found in the Situation Report. Source: Coronavirus disease 2019 (COVID-19) Situation Report – 87.

From this example, we can learn that sometimes the numerator, the number of deaths, in the CFR formula can also change. I am hoping there are no additional deaths in the 113 severe COVID-19 patients in GILD's study, but the news comes from a video earlier in the week and unfortunately another death could have already occurred. Notably, the STAT article notes most patients had been discharged (and thus are highly unlikely to increase the number of deaths).

While most patients at the Chicago site had been discharged according to the video, you could argue those that haven't been discharged are likely the patients with progressive disease. You won't be discharged if you've progressed to requiring mechanical ventilation. The CFR among those patients appears to be much higher, but is highly variable. If even 10 or 20 patients in the severe COIVD-19 study were on mechanical ventilation at the time of video discussing the study, or progressed to requiring mechanical ventilation since, we could still see that the number of deaths could creep up.

Notably, up until April 6, the US trial of remdesivir in severe COVID-19 included patients with peripheral capillary oxygen saturation (SpO2) of ≤ 94% and radiographic evidence of pulmonary infiltrates. That is essentially how the lower bound (not mild/moderate COVID-19) was defined. The upper bound (not critical COVID-19) was set by exclusion criteria such as "requiring mechanical ventilation at screening" and "evidence of multiorgan failure."

An addition to the exclusion criteria since is "Mechanically ventilated (including V-V ECMO) ≥ 5 days, or any duration of V-A ECMO." By the time you have been ventilated for more than 5 days, GILD doesn't want you in this particular study. Further, if you are on extracorporeal membrane oxygenation (ECMO), things are certainly very serious, it makes sense for GILD to exclude these patients from a trial on severe COVID-19, these patients are more likely considered critical.

So the CFR is hard to calculate outside of GILD's study and may even be hard to calculate within the 113 severe patients enrolled at the University of Chicago site (as the number of deaths might still increase). But let's try and take a look at what we might see in severe COVID-19 vs critical COVID-19. There isn't a lot of discussion of this, but a look at data from The Chinese Center for Disease Control and Prevention provides some numbers. Looking at 72314 cases as of February 11, an article in The Journal of The American Medical Association provided some summary statistics.

No deaths were reported among mild and severe cases. The CFR was 49.0% among critical cases.

Excerpt from Wu & McGoogan, published online February 24, JAMA.

Overall I make nothing of the early peek at data from the University of Chicago trial site. Unfortunately, while most patients have been discharged, there may have been a handful of patients who have progressed to critical COVID-19 who may still be at risk of death.

What is going on with the Chinese trials?

There was a bit of tough news this week with word that the mild/moderate COVID-19 study of remdesivir has seen some enrolment issues. Similarly we heard the week prior that the severe COVID-19 study of remdesivir in China had stopped enrolling.

The severe COVID-19 study of remdesivir is now listed as, "Terminated (The epidemic of COVID-19 has been controlled well in China, no eligible patients can be enrolled at present.)" The estimated enrolment of 453 has been changed to an actual enrolment of 237 patients.

The mild/moderate COVID-19 study of remdesivir is listed as "Suspended (The epidemic of COVID-19 has been controlled well at present, no eligible patients can be recruitted.)" The estimated enrolment of 308 is unchanged, no number on actual enrolment has been provided. In early March investigator Bin Cao noted in an interview (5:00 minute mark of this video) that enrolment in the severe study was 233 patients and enrolment was 64 patients in the mild/moderate COVID-19 study. The mild/moderate COVID-19 study was thus enrolling even slower than the severe COVID-19 study. That is 64 out of 308 (21%) patients enrolled vs 233 out of 453 (51%) patients enrolled at the time of the interview. As such I suspect that about 64-70 patients were enrolled in the mild/moderate study before suspension.

Trade idea and risks

While rallies tend to be based on knee-jerk reactions to data, a bit of reason sometimes creeps back in. GILD may fade in the coming sessions as the numbers are digested further. So could we short GILD? It is high risk, but I say it is possible, I do favor puts in this situation, but I don't give advice, so good luck to all long, short, short via puts etc. And good luck to GILD. Here are the risks.

First, according to the STAT article, or the video discussed in the STAT article, Dr Mullane noted data from the first 400 patients in GILD's US remdesivir study (severe COVID-19) would be locked by Thursday (April 16, the date of the STAT article). As such we are due for results from that interim analysis perhaps early this week. If you are short and GILD announces it has a drug for COVID-19, you're in trouble. A thousand shares short at $83 would see you down $17000 if GILD jumped to $100 on news. Who knows when that news comes. Maybe GILD releases data on Sunday and then you're in trouble come Monday. The thing is, how would GILD know its drug works? The severe COVID-19 study compares five days of remdesivir to 10 days of remdesivir.

Most of our patients are severe and most of them are leaving at six days, so that tells us duration of therapy doesn’t have to be 10 days. We have very few that went out to 10 days, maybe three,� she said.

Comments from Dr Mullane in the STAT article.

If five days of therapy works so well, good luck showing 10 days of therapy is statistically significantly better. The interpretation could then be that five and 10 days therapy are equally effective, or equally ineffective. The market has already decided the drug works the way GILD has rallied. What if the CFR in the first 400 patients is already over 1.8% (the Chicago site was doing better than expected) and there is no difference between five and 10 days therapy. Does GILD then fall? I say quite possibly.

Secondly, GILD may report results from a trial of filgotinib in ulcerative colitis, although there is no guarantee the market will be impressed as data are likely to be compared to competing JAK inhibitors such as AbbVie's (ABBV) Rinvoq. Filgotinib beating placebo in that trial isn't likely enough to trigger a rally, filgotinib looking better than Rinvoq would be.

Lastly, anyone shorting GILD is exposed to readouts from other remdesivir studies, not just the US severe COVID-19 study. I think that data from the Chinese mild/moderate study won't show anything as too few patients were probably enrolled, but data from the Chinese severe COVID-19 study might produce something of note, 237 patients is not negligible.

http://seekingalpha.com/article/4338489-gilead-new-remdesivir-data-set-up-potential-short-trade

Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months