Atea Reveals Topline Results of Phase 2 MOONSONG Trial; Shares Crash 66%

Shares of Atea Pharmaceuticals (AVIR) plunged 66% on Tuesday to close at $13.82 after the clinical-stage biopharmaceutical company provided update and topline results of the Phase 2 MOONSONG trial. Notably, the trial was evaluating AT-527 in the outpatient setting.

The global Phase 2 MOONSONG trial, a randomized, double-blind, multi-center, placebo-controlled trial, was evaluating the antiviral activity, safety and pharmacokinetics of AT-527 550 mg and 1,100 mg, which was administered twice daily (BID) to adult patients with mild or moderate COVID-19 versus placebo.

As per the topline analysis update, treatment with AT-527 did not meet the primary endpoint due to the absence of a clear reduction in SARS-CoV-2 viral load in the overall population of patients with mild or moderate COVID-19 compared to placebo. However, in high-risk patients with underlying health conditions, results showed viral load reduction of around 0.5 log10 at Day 7 at 550 mg (prespecified subgroup analysis) and 1,100 mg BID (exploratory subgroup analysis).

Amid the current COVID-19 environment, based on the MOONSONG topline and additional recent results for AT-527, significant modifications to the global Phase 3 MORNINGSKY trial are under review of Atea and Roche, including the trial’s primary endpoint and patient population. Consequently, Phase 3 MORNINGSKY data is likely to be released in the second half of 2022.

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Atea CEO Jean-Pierre Sommadossi said, “We remain committed to our goal of developing and delivering AT-527 as an oral antiviral that will address treatment needs as COVID-19 continues to evolve,” Sommadossi added. (See Atea stock charts on TipRanks)

Markedly, Atea and Roche are working together to develop AT-527 as an oral direct-acting antiviral (DAA) for the treatment of COVID-19. A comprehensive non-clinical program to exemplify the safety profile of AT-527 has been completed by Atea. Therefore, results from these non-clinical studies reveal that AT-527 is non-mutagenic and has no effects on fertility and reproduction.

Following the news, J.P. Morgan analyst Eric Joseph downgraded Atea to Hold from Buy and decreased the price target to $16 (20.2% upside potential) from $61.

Joseph said, “Despite developments on the vaccine front, we believe antiviral therapies addressing symptomatology and post-infection complications will continue to be an essential component of the treatment armamentarium for COVID-19 in both the pandemic and post-pandemic period. While see compelling pipeline optionality in the company’s HCV and Dengue programs with AT-787 and AT-752, respectively, as it relates to COVID-19, we see a complicated path forward for lead candidate AT-527.”

“In light of recent phase 2 MOONSONG data and given delayed pivotal trial timelines, we see AVIR shares trading rangebound over the near to midterm ahead further data and clinical execution from the MORNINGSKY trial,” the analyst added.

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 2 Buys and 2 Holds. The average Atea price target of $30 implies 125.2% upside potential. Shares have decreased 54.45% over the past year.

Investors should always be aware of the risks involved in any stock. According to the new TipRanks’ Risk Factors tool, the Atea stock is at risk mainly from three factors: Tech and Innovation, Finance and Corporate, and Legal & Regulatory, which contribute 35%, 24% and 18%, respectively, to the total 89 risks identified. Under the Tech and Innovation risk category, AVIR has 31 risks, details of which can be found on the TipRanks website.