One of the difficulties facing American investors during the COVID-19 outbreak is separating fact from fiction, rumor from truth and speculation from confirmation.
President Donald Trump has said repeatedly that chloroquine and hydroxychloroquine can be used to treat the novel coronavirus, leading to panic buying and a shortage for patients who are prescribed the drugs for their approved uses.
Here’s a look at what investors need to know about these drugs.
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What Are Chloroquine, Hydroxychloroquine?
Chloroquine and hydroxychloroquine are drugs approved by the FDA to treat malaria. Hydroxychloroquine is also approved to treat lupus and rheumatoid arthritis due to its anti-inflammatory properties. Hydroxychloroquine is a derivative of chloroquine that has a similar structure but different chemical and biological properties.
Studies suggest hydroxychloroquine is less toxic to humans than chloroquine.
Both drugs have been in the news in recent weeks because of their alleged potential to treat COVID-19. Neither drug is approved by the FDA to treat the coronavirus, but Trump has referred to the drugs as game-changers in containing the outbreak.
The CDC has said both drugs have demonstrated efficacy in treating severe acute respiratory syndrome coronaviruses based on limited data.
A new study published this month in the journal Bioscience Trends found that chloroquine phosphate has produced positive results in treating COVID-19-associated pneumonia. China and several other countries are now recommending it as the treatment of choice for patients hospitalized due to COVID-19.
Trump Says Drug 'Not Going To Kill Anybody'
The controversy related to the use of both chloroquine and hydroxychloroquine stems from the fact that neither drug has gove through the lengthy and rigorous testing processes required to gain FDA approval for treatment of COVID-19. Trump said last week the fact both drugs are approved to treat other conditions is a positive.
“The nice part is it's been around for a long time, so we know that if things don't go as planned, it's not going to kill anybody,” Trump said of hydroxychloroquine.
The potential downside of the drugs is that the COVID-19 studies up to this point have been limited at best, and positive test results may be anecdotal. At the same time, while the CDC has said both drugs have been well-tolerated in COVID-19 patients, side effects include seizures, nausea, vomiting, deafness, vision changes and low blood pressure.
In addition, ingesting too much of either drug could be deadly. Health officials in Nigeria have said three Nigerians have overdosed on chloroquine in attempts to combat COVID-19.
An Arizona man died and his wife was hospitalized after the two ingested a version of chloroquine phosphate used to treat fish parasites.
The Companies Involved
New York has already begun clinical trials of chloroquine and hydroxychloroquine in treatment of COVID-19, and investors can reasonably expect any positive results to be fast tracked by the FDA. In the meantime, several drugmakers are stepping up to assist with testing and potential distribution.
Bayer AG BAYRY, Teva Pharmaceutical Industries Ltd TEVA and Novartis AG NVS have pledged to donate both drugs where needed. Mylan NV MYL and Amneal Pharmaceuticals Inc AMRX have said they plan to ramp up production of hydroxychloroquine.
A the same time, drugmakers Roche Holdings AG RHHBY, Regeneron Pharmaceuticals Inc REGN and Sanofi SA SNY are among the companies that have begun testing other drugs for treatment of COVID-19.
Here’s a look at the percentage of bullish StockTwits messages related to each of the tickers mentioned:
- Bayer: 93.8% bullish.
- Teva: 97% bullish.
- Novartis: 66.7% bullish.
- Mylan: 96.8% bullish.
- Amneal: 96.5% bullish.
- Roche: 95.3% bullish.
- Regeneron: 94.7% bullish.
- Sanofi: 100% bullish.
At this point, there is simply too much uncertainty associated with the virus, the ongoing clinical trials and the potential timeline for getting drugs to market to make any of these stocks anything more than a speculation at this point. Given the sentiment percentages, traders appear extremely bullish on all the drug companies at this point. Investors should proceed with caution.
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