Why Atea Pharmaceuticals Shares Are Crashing Today

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What happened

Actions of Atea Pharma (NASDAQ: AVIR) fell as much as 14.4% in pre-market trading on Wednesday morning. Biotech shares are dropping today in response to rock‘s (OTC: RHHBY) decision to end its involvement in the development of COVID-19 oral therapy known as AT-527.

Atea Pharmaceuticals reportedly reclaimed full commercial rights to the drug on February 10, 2022. Despite Roche’s exit, the company said it still plans to move forward with Morningsky’s Phase 3 trial. AT-527.

Image source: Getty Images.

So what

Almost a month ago today, Atea and Roche announced that AT-527 did not outperform placebo in a mid-term trial focusing on patients with mild to moderate cases of COVID- 19. Since, Merck and Pfizer both have applied for emergency use authorization from the United States Food and Drug Administration for their competing oral therapies for COVID-19. As a result, Roche probably didn’t want to stick around for a drug that would have to compete in a crowded market. After all, Oral Therapies from Merck and Pfizer will likely have most of that market sewn up by the time AT-527 releases Phase 3 results in the second half of 2022.

Now what

Is Atea Pharmaceuticals stock a buy in this decline? While AT-527 could hit Morningsky next year, the drug will likely have to go through a normal review process to gain market access in the United States. This means that the AT-527 may not be commercially available until mid-2023. Atea Pharmaceuticals also does not have any other late stage candidates at this time. Therefore, investors may want to watch this story unfold safely for now.

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