| It's often said that investing in biotechnology is a binary affair: One good trial outcome can make a stock surge, while a bad one can bury an entire company in the blink of an eye. It's rare, however, that the entire market turns on a single clinical outcome. And yet that is what has been happening with leaks of trial data related to remdesivir, the Gilead Sciences drug that's being tested in numerous trials worldwide as a possible Covid-19 treatment. Last week, a glimmer of hope from a trial of remdesivir in Chicago sent U.S. investors on a market-wide shopping spree, rallying stock indexes on the idea that finding a workable antiviral could end the pain resulting from the illness and social distancing. Then, on Thursday, a report that a trial in China had failed to find any sign that remdesivir would work for Covid-19 knocked the U.S. market back on its heels. It makes sense that any news, good or bad, about a treatment would move markets. The pandemic has caused unprecedented economic destruction—on Thursday, the U.S. reported that over four million more people had filed claims for jobless benefits in the past week. And yet, for everything riding on these trials, there is high potential for folly in responding to every twist and turn to emerge from the lab.  The Gilead headquarters in Foster City, California. Photographer: David Paul Morris/Bloomberg The giant swings for Gilead and other companies developing coronavirus drugs based on minimal data are becoming divorced from reality. Nobody has any idea what the market for remdesivir will be even if it works, though it's likely to be limited. One reason is that remdesivir must be infused in a hospital or doctor's office once a day for 5 to 10 days; it would be very inconvenient for most people with Covid-19 who are suffering at home. The market blew the significance of the Chicago report out of proportion. In that case, investors bought and sold based on impressions of what the drug was doing from one doctor at one hospital that was part of a far larger trial. The physician's claims are all but impossible to interpret on their own. As overhyped clinical "results" roll out, it's important to remember that most patients recover from this virus on their own. Without a control group, a trial claiming a high survival rate is meaningless, because most patients likely would have survived anyway. In the Chicago study, some arms of the trial don't have a control group getting standard treatment, so it will be hard to interpret the findings even when all the data is in. In the case of the China trial, the market is moving to the opposite extreme. From the beginning, experts thought that it was a long shot that remdesivir would help the severely ill patients enrolled in this study. Historically, antivirals like remdesivir work best when given early, before the virus has gotten out of control. On top of that, the trial was terminated early, after enrolling just over half the expected number of patients. It was highly unlikely to show a conclusive result at all.
When will investors have a better sense of whether the Gilead drug works? There is a giant trial being conducted by the U.S. National Institutes of Health in a broad group of hospitalized patients. Unlike many other trials, it has enrolled swiftly and has a placebo group that should make the results much more clear-cut. But investors will have to be patient—results aren't expected until May. In the meantime, beware traders bearing microscopes. The view may not be as clear as they think.—Tim Annett and Robert Langreth | 
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