Gilead shares rise after United States approves remdesivir as COVID-19 drug

© Reuters. FILE PHOTO: Gilead Sciences Inc pharmaceutical company is seen during the outbreak of the coronavirus disease (COVID-19), in California

(Reuters) – Shares of Gilead Sciences Inc (NASDAQ:) rose 6% on Friday after its antiviral drug, remdesivir, became the first and only approved treatment for COVID-19 in the United States.

The U.S. health regulator’s approval on Thursday for its use in hospitalized patients came despite the World Health Organization last week saying the drug did not have a substantial effect on patients’ length of hospital stay or chances of survival in a global trial.

The U.S. Food and Drug Administration’s (FDA) backing signals its confidence in Gilead’s U.S.-based study results, which showed the drug was able to cut time to recovery in patients, Piper Sandler (NYSE:) analyst Tyler Van Buren said in a client note.

Remdesivir has been available under an FDA emergency use authorization since May, after a study led by the National Institutes of Health showed it reduced hospital stays by five days.

The drug, given intravenously, could generate over $1 billion in sales during the second half of the year at the current case rate, analyst Van Buren said.

Remdesivir, which will be sold under the brand name Veklury, costs $3,120 for a five-day treatment course, or $2,340 for government purchasers such as the Department of Veterans Affairs.

Shares of Gilead were up 5.67% at $64.11 before the bell.

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