WASHINGTON— A record number of Americans have lost their jobs but stocks are rebounding at a historic pace, buoyed by advances in drug treatments and potential vaccines for COVID-19.
Markets continued to move higher last week after Gilead Sciences received emergency-use authorization from the U.S. Food and Drug Administration (FDA) on May 1 for its COVID-19 therapy remdesivir. The drug will be used to treat patients who are hospitalized with severe cases.
In addition, biotech firm Moderna received FDA clearance on May 8 to advance its COVID-19 vaccine to a phase two clinical trial.
Following steep losses in March, Dow Jones and S&P 500 rose roughly 30 percent from their lows on March 23. Stock valuations have also reached record levels. The forward 12-month price/earnings ratio is at 20.4, which is above the 5-year and the 10-year average, according to data provider FactSet.
Analysts believe the markets are holding up well partly because of the positive developments in the biotech industry’s efforts to improve treatments and vaccines for the pandemic.
“Investors are hopeful that human ingenuity will continue to support markets,” stated a report by the Northern Trust Asset Management.
Remdesivir’s ability to speed up recovery time is a major step in fighting the pandemic, the report said.
Trial data showed that the drug speeds up the recovery time for patients by 31 percent or about four days on average.
Roger Klein, a physician, attorney, and health policy expert, believes the FDA is working at a remarkable speed in terms of getting potentially beneficial products on the market.
“I think these new regulatory approaches are encouraging for the market. There are a lot of lessons to be learned about how we handle drug and vaccine approvals going forward,” Klein told The Epoch Times.
“And it’s driven by this president who thinks out of the box and is really pushing for new approaches.”
Klein added that this new regulatory model could be used to expedite other future products that have lifesaving implications.
The FDA is also working to speed up the development of COVID-19 vaccines. After the FDA approval, Moderna announced that it would begin a phase two study using 600 volunteers “shortly.” The company also said it “is finalizing the protocol for the Phase 3 study, which is expected to begin in the early summer of 2020.”
Other companies that have started clinical trials of their potential vaccines include BioNTech, which teamed up with Pfizer and Oxford University’s Jenner Institute, which recently partnered with AstraZeneca.
The companies are using new technologies to create vaccines, which accelerates the process, Klein said.
In addition, they are “performing multiple steps at the same time that would normally be done sequentially. And that’s done at a greater cost but at a much greater speed.”
According to Klein, that’s “a very ambitious target.”
“We possibly could have a vaccine that can be used in a very small subset of people,” he said. But it “would be historically unprecedented to have a vaccine out for general distribution in such a short period of time.”
