Why Atea Pharmaceuticals Shares Are Crashing Today


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.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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