Gilead and Matinas May Have Beaten Covid-19

Disclaimer: This post does not constitute medical or financial advice. Author has a long position in Gilead and Matinas. Do your own due diligence before making an investment.

While you were distracted with the skyrocketing price of Moderna, and the full FDA approval of the Pfizer vaccine, you might not have noticed that Gilead has been trending upwards. (For anyone following the stock over the last five years, this is basically a black swan event.)

Gilead isn’t ripping 5-10% a day like other biotech stocks, but it has been slowing grinding out those +0.5-1.5% days. Over time they add up.

So, what accounts for this? While it could be that Gilead is about to publish some fantastic cancer data, I have a sneaking suspicion they might have solved Covid-19.

Here’s the deal.

Back in the early days of the pandemic, Gilead was frantically trying to produce remdesivir because it seemed like the only immediate solution. They were under immense pressure from the US government, doctors, and the World Health Organization to try and help stop Covid-19 before it got out of hand.

Unfortunately, remdesivir (in its current intravenous form) is not a great dug. In the study that got the drug it’s emergency approval, remdesivir was only shown to reduce the hospital stay by a few days.

Remdesivir is an anti-viral. It works by stopping viral replication. This is like throwing water on a burning couch. If you catch it early enough, the water does its job. However, if you throw water on a blazing loveseat (or a pile of ashes) it can be seen as useless. But it’s not that water doesn’t work on fire, it’s just that your timing was off.

This is why intravenous remdesivir kind of sucks. You need to have Covid-19 bad enough to be hospitalized. By this point it’s already burned through your system and spread enough virus-fire to the point where dousing it only saves you a few days in the hospital.

But what if there was a way of having a water bucket ready as soon as someone dropped a cigarette? Or what if we could even make the couch immune to fire?

Here are some facts.

1. July 8th, 2020. Gilead launches a phase 1 trial for an inhaled version of remdesivir. The plan was for it to be administered through the lungs via a nebulizer, and could theoretically be administered as soon as a patient tested positive for Covid-19. [Source]

(They don’t update us on the trial results for almost an entire year.)

 2. December 7th, 2020. Matinas Biopharma announces an agreement with the National Institute of Allergy and Infectious Diseases (NIAID). The collaboration was to produce an oral form of remdesivir by using Matinas’ LNC technology. [Source]

From the press release: “One or more formulations of remdesivir will be developed using Matinas’ Lipid Nanocrystal (LNC) platform delivery technology, which enables the development of a wide range of difficult-to-deliver molecules. Matinas plans to utilize NIAID’s suite of preclinical services to carry out antiviral testing with selected formulations. Gilead will provide remdesivir and work with Matinas to evaluate the data generated from the planned series of preclinical studies.”

3. January 11th, 2021. Gilead’s CEO says that remdesivir likely works against all variants. “Remdesivir works at the source in the cell where the virus replicates, and what we know is in these new variants, that part of the cell is not changing at all in fact.” [Source]

This is important because if a new variant emerges that beats the current vaccines, then remdesivir will probably still work.

4. April 12th, 2021. Gilead suspends an a separate intravenous remdesivir trial for non-hospitalized patients. They say this is due to the changing landscape of Covid-19 treatments, like the rolling out of vaccines. They also say, “We continue to develop investigational inhaled dosage forms of remdesivir and novel oral antivirals, with the goal of delivering effective, well-tolerated and significantly more convenient treatment options for patients.” [Source]

5. April 23rd, 2021, the US government starts to pull funding from fringe vaccine candidates, like the one being produced by Inovio. [Source]

At the time it seemed the current vaccines were extremely effective, but I suspected they were sitting on information that was showing vaccine efficacy was fading. Now the data coming out of Israel is showing exactly that. Efficacy is dropping due to fading antibodies and new variants that are punching through the vaccine.

Don’t get me wrong, I absolutely think you should still get vaccinated, it’s just becoming apparent that we need more weapons in our war against Covid-19.  (Especially for people who can’t or refuse to get vaccinated.)

6. June 17th, 2021. The Biden administration announces 3 billion in funding for new Covid-19 therapeutics. Anthony Fauci specifically mentions the need for antiviral oral treatments. [Source]

7. July 29th, 2021, Gilead reports their Q2 2021 results. During the conference call, they tell us that they’ve scrapped their inhaled remdesivir idea. The lungs didn’t process the drug well enough. All that’s left is now oral remdesivir (unless there’s some other secret formulations they’re not talking about.) [Source]

8. August 10th, 2021, Matinas reports their Q2 2021 results. From the press release, “The Company and NIAID have successfully completed in vitro studies of various LNC formulations of Gilead’s antiviral drug remdesivir.” [Source]

They say their LNC formulation of remdesivir “demonstrated meaningful antiviral activity compared to free remdesivir, with a favorable toxicity profile. Based on these results, NIAID is preparing to initiate an in vivo efficacy study of the most potent LNC-remdesivir formulation. Results are expected in the fourth quarter of 2021.”

If you listen to their conference call, or read the transcript, the CEO says that the NIH moved their oral remdesivir trial to the front of the queue. They also state they are hoping that oral remdesivir can be used prophylactically. This means, if it works as we all hope, you could pop a pill before going into a Covid-19 hotspot. For example: Nurses and doctors could swallow one before they start work.

Oral remdesivir would be a great product. Pills are easier to ship than vaccines. They also last longer on the shelf.

Intravenous remdesivir has liver side effects, but Matinas’ oral remdesivir doesn’t seem to adversely affect the liver. (This is fantastic.)

9. August 31st, 2021. Two FDA officials in charge of reviewing Covid-19 vaccine applications are leaving the FDA this fall. [Source]

This would have been unthinkable before Pfizer and Moderna were approved, but it makes sense now given the Biden administration’s pivot to therapeutics. (Like oral remdesivir.)

Here’s the thing about politics. Every administration loves to take credit for great news. When unemployment drops, the administration will do a press release. “Look how great we are at running the country.” When unemployment goes up, it’s always: “The former administration left us with quite a mess.”

The vaccines were largely a Trump initiative. Given his recent fumblings, Joe Biden needs a huge win if he wants to secure re-election. A therapeutic that defeats Covid-19 would do that.

10. If you look at the charts of Matinas and Ligand Pharmaceuticals, you’ll notice they both jumped huge on August 23rd. If you haven’t heard of $LGND, they’re the company that manufacturers captisol, a key ingredient in remdesivir.

So you have the manufacturer of a potential superior delivery system (Matinas), the manufacturer of a key ingredient (Ligand), and the patent-holder (Gilead), all rallying big-time in the same month, during a news vacuum.

Quite the coincidence.

11. August 26th, 2021. Gland Pharma, a pharmaceutical company in India, increases contract manufacturing of remdesivir. They’re now manufacturing for four companies. Production of remdesivir is up 2.5x since April. When asked by CNBC about the increased production, they declined to comment. [Source]

So, even though cases in India are way down from their last peak (40k, vs 400k), production of remdesivir has never been higher. Export of remdesivir was banned during India’s giant Covid-19 wave but has since resumed.

It’s interesting that Gilead is still adamant about ramping up production of remdesivir. Possibly for variant breakthrough cases. Although the current data is showing vaccines are still preventing hospitalization at 80%. (Where IV remdesivir is used.)

If Gilead suspected the vaccines would reduce the demand for remdesivir, they would reduce production. Increasing production means you expect demand to also increase. Oral remdesivir would create a tremendous demand. (Be on the lookout for more supply deals.)

So what now?

Obviously we don’t yet know if oral remdesivir is the magic pill to fix Covid-19, but it’s starting to feel that way. The NIH rushed them to the head of the trial queue based on their early data. Gilead has scrapped all their other experimental formulations of remdesivir. And the strangest thing of all, Gilead’s stock has been trending upwards for seemingly no reason. (It never does this. If anything, Gilead stock trends downward, and usually drops on good news.)

Six month chart of Gilead

To me this feels that someone (likely a large institution) is sneakily trying to accumulate as much Gilead stock as possible before some major news drops.

For speculation’s sake, let’s say oral remdesivir is the magic Covid pill. The ramifications of this would be huge. Vaccine stocks would tank, but almost everything else would go up.

Movie theaters, cruise lines, airlines, etc. Even Gilead would rocket upwards. (Which would be nice for a change.)

As for Matinas Biopharma…that stock would go to Pluto. Then it would sail past the Voyager 1 probe, and travel into interstellar space.

Matinas Biopharma only has a market cap of 154M.

Moderna gained 158 billion in market cap over two years.

Matinas jumping to a market cap of 15.4 billion (A conservative 10% of Moderna) represents an increase of 100 times. This could be a hundred bagger and the catalyst could trigger in less than five months. (It could go much higher if the company stays independent.)

There are lots of other great reasons to invest in Matinas, but I believe oral remdesivir to be the best short-term super catalyst.

If their human trials of oral remdesivir data are successful, everyone is going to want to license Matinas’ LNC technology, not to mention buy every pill they can produce. Matinas is a five-star buyout candidate trading near 52-week-lows. They also have enough cash to float their operations until 2024. (This is extremely rare for a small cap biotech.)

In conclusion, don’t sleep on Matinas. It could pay for your retirement.