Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }
Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you make the most of staying home.
Visit the hub

Well-timed trades in Gilead Sciences Inc.’s options ahead of good news on the biopharmaceutical company’s COVID-19 drug treatment may draw regulatory scrutiny, experts said.

On April 17, Gilead’s shares jumped nearly 10 per cent after a media report detailing encouraging partial data from trials of the U.S. company’s experimental drug remdesivir in severe COVID-19 patients.

Those gains were dwarfed by a price jump in bullish options that traded in unusually high volume just hours before the report and that more than doubled in value overnight.

Story continues below advertisement

Remdesivir subsequently received the U.S. Food and Drug Administration’s emergency use authorization to treat COVID-19 patients on May 1.

Gilead has not heard from regulators regarding the trades, company spokesman Chris Ridley said, declining any additional comment on the matter.

Early in the trading day on April 16, with Gilead shares hovering around US$75, four large blocks of its options were purchased for about US$1.5-million each. Those unusually large trades bet that Gilead’s shares would rise north of US$80 to US$87.50 by mid-August.

“They are pretty big trades,” said Henry Schwartz, president of options analytics firm Trade Alert, adding that the fact they were made around the same time was also unusual. “It stands out,” he said.

In one of the trades, 3,143 calls betting Gilead’s shares would rise above US$85 by Aug. 21 were purchased for a total of US$1.6-million. Through April 17, the value of those contracts jumped to US$3.02-million, according to a Reuters analysis of trading data. The other three trades also made large gains.

On Friday, Gilead shares closed at US$77.83.

“This looks problematic,” said Howard Fischer, a partner with law firm Moses & Singer and former senior trial counsel at the U.S. Securities and Exchange Commission (SEC).

Story continues below advertisement

“When there is a specific spike in the firm’s trading activity – right before a finding is announced – it can become a red flag to regulators,” he said.

The SEC scans for unusual trades ahead of news announcements and has used such data to bring insider trading probes in the past, public filings show. The agency declined to comment.

While it is possible the trades were fortuitous, driven by bullish sentiment for drugmakers amid the pandemic, options trades in other pharmaceutical names did not show similar activity, according to a Reuters review.

“It does look like somebody had some sort of reason to pick that time of day to put a lot of capital to work on Gilead,” Mr. Schwartz said.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Related topics

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies