Everything you need to know about why GILD puts will print next week (if you buy at Open)

by VictorVaudeville

Abstract

Gild is up 16%+ After hours based on a rumor of a study in Chicago in regards to remdesivir as a treatment for COVID, but the only real study on the drug so far is in the New England Journal of Medicine study here:

www.nejm.org/doi/full/10.1056/NEJMoa2007016

The NEJM study is garbage, and it 100% cannot be justified as a cure for COVID. This new study does not sound much better. Even if the results are more promising, they only have 113 subjects in the study (the last study had basically less than 50, more on that in a minute). This stock has fluctuated a LOT based on hearsay, and I see some FD potential as people realize the miracle cure is not here. Not only that, but the current news leak likely is based on fradulent hype that some people are going to Cash in on when the market opens.

The NEJM Study

First the nerdy stuff. This study has many flaws, but here’s a few:

  1. Population. They selected patients who had an O2 sat of <=94% on room air, or who were on O2 support (including Nasal Cannula). 30 of these people were ventilated (associated with very high mortality rates), 4 were on ECMO (associated with extremely high mortality rates, and the rest were on noninvasive ventilation assistance (Nasal cannula to BiPAP)
  2. Number of subjects. An N of 61 is far too low to draw real conclusions, and apparently 8 of those people “could not be analyzed. So really an N of 53. THEN 4 patients discontinued the treatment prematurely, so REALLY and N of 49.

Results: 57% of the ventilated patients were extubated 13% of the patients died (Mortality rate was 18% on vents and 5% off vents) 100% of those who were on low-flow O2 or ambient air were discharged. 28% of patient’s on NIV died or were intubated

Problems

  1. I can’t see how they chose their population, so it is unclear if these people were randomly chosen. It is suspicious that so many of them are Intubated despite their selection including people who would otherwise be on low oxygen, although they did list this as “compassionate use,” so high-risk patients were likely chosen, and not randomly.
  2. The population is EXTREMELY small for a conclusive drug trial. I know that it isn’t a large double-blind FDA trial, but that is my point.
  3. As a result of the above, their statistics are hardly worth considering, but they report a mortality of 13% and then try to compare their numbers to studies who report mortality rates of 17-78% in “similar populations.” This is mostly on data from China, specifically Wuhan. They then explicitly say that their data is not comparable:

However, the patient’s enrolled in this compationate-treatment program are not directly comparable to those studied in these other reports [from China].

  1. This data is based on 18 days worth of treatment. It does not indicate that everyone who survived for 18 days. Their follow up is anticipated to expand to 28 days, but over HALF of their patients were still hospitalized after the study was published.

Now, anecdotally I have heard COVID mortality rates of about 20% for mechanically ventilated patients in the US. I did a quick search and had a hard time finding data related to the mortality rates for people with similar characteristics to those in this study. Of note, the people in this study did not appear particularly unhealthy. Only 17% had diabetes, 11% had asthma, 25% had hypertension. Off the top of my head, this doesn’t seem like a representative population of those who would be high risk for complications, and doesn’t seem to account for things like COPD for some reason.

The New Chicago Study

www.statnews.com/2020/04/16/early-peek-at-data-on-gilead-coronavirus-drug-suggests-patients-are-responding-to-treatment/

There are only rumors surrounding the new study, but some facts that we know are that it is 113 subjects, and supposedly only 2 people died in the study. Now, SUPPOSEDLY this study is based on treating severe cases of COVID, but there are a couple of problems with that.

Remember how the previous study included people who weren’t even on O2, but also for some reason was HEAVILY weighted towards people who were intubated or on Non-invasive ventilation? This makes me HIGHLY skeptical as to what they consider “severe.” If they are lumping in people who are on things like ECMO with people who aren’t even on O2, how can you even compare these two populations in terms of mortality? The last study had 7 people die out of less than 50 real subjects. This one supposedly has only 2, but how do we know that more people were included that were on, say High-flow nasal cannula (not mechanically ventilated)?

Additionally, they say “over half of our participants were discharged.” Well, just under half of their patients were discharged in the last study. This also doesn’t say anything about improving morbidity or mortality. The previous study still had over half of their patients in the hospital at 18 days. Unless they changed their treatments some how, I’m willing to bet that the population was different (they already seemed to have an an unusually healthy “severe” population in their previous study, as I mentioned).

But the real kicker is that this study does not and cannot say shit that will sustain this stock trading at ATH. Premarket is already over 4% over their ATH. A 113 person study is not going to say shit, and if the study was so magical that it was game changing, it would have likely been shut down and advanced to much bigger trials because of the massive benefit they saw.

The Drug

If this drug were approved tomorrow for COVID treatment by the FDA, it would be At or over a YEAR before it would be massively produced. The same is true of a Vaccine (though a vaccine could probably come out faster and cheaper). If you are betting on this drug to be a success, it doesn’t have to just be a success…

…it has to be success and PRAY that other drugs that are available aren’t effective in treating COVID and a Vaccine doesn’t come out before the drug is rolled out. EITHER of those scenarios would all but tank this drug and the stock with it.

The Stock

This stock has been extremely volatile since February, but before that was consistently trading below 70. Now it is at or above 90 premarket, basically putting all its new-found value in this one drug that has really not proven much.

This stock basically booms and busts on a weekly basis. But, I know what you’re thinking: “If the stock moons because of rumors, it’s going to hit the ceiling once the study comes out.” Here’s some TA for you, look closely:

imgur.com/a/7UuNRuV

Don’t see it? Look closelier:

imgur.com/a/0wNpop5

This stock has been booming and busting ever since the WHO pushed the drug, and it has always cycled in less than 1 week, until recently when it settled at about 75. With this new boom, I predict it will crash during the day, and it likely will crash further before 04/23. If you want to be safe, cash in before then because the study data may come out around that time.

Starting next week, expect all the negative articles to pour out about the drug highlighting what I already have said here, and all that enthusiasm will deflate this stock by end of next week. I would say short this bitch a week out by 9-10% every time it booms. Literally cannot go tits up.

But wait there’s more (Juicy drama)

Some people have already posted this, but there were a SHIT TON of calls purchased just before the news dropped after hours, and many are pointing to the author of the original news:

twitter.com/RealTianZeng/status/1250979087079878656

Apparently Adam Feurnstein has a history, I don’t know. But some HIGHLY suspicious trades were put in for calls that expire tomorrow. Tons of FDs. There’s ZERO reason for that volume unless there’s some shady shit going on.

This is showing all the signs of a pump-and-dump that you can cash in on with puts

Conclusion

So, even if the data for the new study shows that the new drug reduced mortality in severe patients by 66%, it STILL isn’t saying shit with an N of 113. The last time this stock got pumped by rumors, it cratered in less than 7 days and didn’t even budge when the actual NEJM study cam out. Meanwhile, it looks like some people in the background planted the hype and got calls anticipating the pump. This thing is going down, so it Literally can’t go tits up

TLDR GILD 75p 04/24 at open when premarket tanks the price

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.