Gilead Sciences Plummets 2.66%: Failed Trial, Volatile Options, and a Sector on Edge

Summary
• Gilead Sciences (GILD) tumbles 2.66% to $119.93, its worst intraday drop since late 2023.
• Options frenzy: 367,883 shares traded, with 2025-12-19 put options surging in volume.
• Arcus Biosciences (RCUS) halts GILD-linked cancer trial, triggering sector jitters.

Gilead Sciences faces a sharp selloff amid a critical blow to its oncology pipeline. The stock’s 2.66% decline—its most significant intraday drop in over a year—has ignited a surge in options activity, with put options dominating the 2025-12-19 expiration cycle. The move follows Arcus Biosciences’ announcement to discontinue a pivotal Phase 3 trial for a GILD-partnered cancer regimen, casting doubt on the biotech giant’s near-term growth prospects.

Arcus Trial Discontinuation Shatters Gilead’s Oncology Hopes
Gilead’s 2.66% intraday plunge is directly tied to Arcus Biosciences’ decision to halt the Phase 3 STAR-221 trial for a GILD-partnered anti-TIGIT cancer regimen. The trial, which evaluated domvanalimab in upper gastrointestinal cancers, failed to meet its primary endpoint of improved overall survival. This marks a critical setback for Gilead’s oncology division, which has been banking on this pipeline to offset slowing growth in its HIV and hepatitis portfolios. The news triggered a flight to safety in put options, with the GILD20251219P119 and GILD20251219P120 contracts seeing massive turnover as traders bet on further downside.

Healthcare Sector Mixed as Johnson & Johnson Outperforms
The broader healthcare sector remains fragmented, with Johnson & Johnson (JNJ) bucking the trend by rising 0.66% despite Gilead’s collapse. JNJ’s resilience underscores the sector’s divergence: while oncology-focused firms like Gilead face clinical setbacks, diversified players with strong consumer healthcare and pharmaceutical segments continue to attract capital. This contrast highlights the sector’s vulnerability to pipeline-specific risks, particularly for companies reliant on a few high-stakes trials.

Options Playbook: Capitalizing on Gilead’s Volatility with Put Options
• 200-day average: 113.16 (below current price)
• RSI: 45.42 (oversold territory)
• MACD: -0.019 (bearish crossover)
• Bollinger Bands: Price at 119.69 (lower band), suggesting potential rebound

Gilead’s technicals paint a mixed picture: while the RSI hints at oversold conditions, the MACD and 200-day average signal lingering bearish momentum. Key support levels at $119.69 (lower Bollinger band) and $115 (psychological threshold) will be critical to watch. The 2025-12-19 options chain offers two high-conviction plays for bearish traders:

• GILD20251219P119
- Strike: $119 | IV: 32.05% | Leverage: 63.70% | Delta: -0.434 | Theta: -0.025 | Gamma: 0.069 | Turnover: 98,036
- IV (Implied Volatility): High volatility suggests strong bearish sentiment.
- Leverage: 63.70% amplifies potential returns on a 5% downside.
- Delta: -0.434 indicates moderate sensitivity to price drops.
- Gamma: 0.069 ensures the option’s delta increases as the stock declines.
- Turnover: High liquidity ensures ease of entry/exit.
- Payoff: At a 5% downside (ST = $113.93), payoff = max(0, $119 - $113.93) = $5.07 per share.
- Why it stands out: This put offers a balance of leverage and liquidity, ideal for capitalizing on a potential breakdown below $119.

• GILD20251219P120
- Strike: $120 | IV: 33.08% | Leverage: 49.08% | Delta: -0.503 | Theta: -0.012 | Gamma: 0.068 | Turnover: 152,420
- IV: Elevated volatility reflects heightened bearish expectations.
- Leverage: 49.08% offers moderate amplification on a 5% downside.
- Delta: -0.503 suggests strong sensitivity to price declines.
- Gamma: 0.068 ensures delta increases as the stock drops.
- Turnover: Massive liquidity makes this contract highly tradable.
- Payoff: At a 5% downside (ST = $113.93), payoff = max(0, $120 - $113.93) = $6.07 per share.
- Why it stands out: The P120 put’s high turnover and moderate leverage make it a robust play for a deeper correction.

Trading Insight: Aggressive bearish traders should prioritize the GILD20251219P120 put for its liquidity and leverage. If GILD breaks below $119.69, the P119 put could offer explosive potential. For a balanced approach, consider a diagonal spread using both contracts to hedge against a rebound.

Backtest Gilead Sciences Stock Performance
The backtest of GILD's performance after an intraday plunge of at least -3% from 2022 to the present shows favorable short-to-medium-term gains. The 3-day win rate is 49.36%, the 10-day win rate is 55.98%, and the 30-day win rate is 59.62%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest period was 4.42%, which occurred on day 59, suggesting that while there is some volatility, GILD can exhibit reasonable recovery and even exceed pre-plunge levels.

Gilead at a Crossroads: Watch $115 Support and JNJ’s Lead
Gilead’s 2.66% drop reflects a pivotal moment for the stock, with its oncology pipeline now under scrutiny. While the RSI suggests oversold conditions, the MACD and 200-day average signal ongoing bearish pressure. Investors should monitor the $115 level as a critical support threshold; a break below this could trigger a broader selloff. Meanwhile, Johnson & Johnson’s 0.66% rise highlights the sector’s resilience, offering a contrast to Gilead’s struggles. Action: Short-term bearish traders should target the GILD20251219P120 put, while watching for a rebound above $119.69.