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Merck-Rivaling Covid Pill Flops; Where Does Maker Atea Go Now?

Atea Pharmaceuticals (AVIR) said Tuesday its Merck (MRK)-rivaling antiviral Covid pill failed in a midstage test, leading AVIR stock to crash.




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The antiviral pill failed to significantly lower the viral loads of patients with mild to moderate Covid. But in patients with a high risk of severe Covid and underlying health conditions, the results were more promising, Atea said in a news release.

Now, Atea and its partner, Roche (RHHBY), are scrambling to assess whether they can modify the patient population and ultimate goal of the upcoming Phase 3 study.

“We remain committed to our goal of developing and delivering (the drug called) AT-527 as an oral antiviral that will address treatment needs as Covid-19 continues to evolve,” Atea Chief Executive Jean-Pierre Sommadossi said in a written statement.

But in morning trading on today’s stock market, AVIR stock plummeted 71.8% near 11.40. Merck stock, on the other hand, rose 1.6% near 78.40.

AVIR Stock Crashes On Antiviral Miss

Atea and Merck are both working on antiviral treatments for Covid. These drugs are oral medicines that look to stop the virus’ replication in the body. Merck has already asked the Food and Drug Administration to grant its Ridgeback Biotherapeutics-partnered drug emergency authorization.

So, investors in AVIR stock had high hopes for a second potential oral antiviral.

In the midstage test, Atea’s drug failed to “show a clear reduction” of viral load in mild-to-moderate Covid patients compared to a placebo. Overall, two-thirds of patients had mild symptoms with no underlying health conditions. On average, patients were 37 years old. The test also enrolled people who were vaccinated against Covid. Merck’s study focused on unvaccinated people.

Promisingly, high-risk patients showed a stronger viral load reduction, Atea said. Atea also said the presence of variants and greater vaccination numbers could have impacted the results.

Still, the news sent AVIR stock to its lowest-ever point. Shares went public in October 2020. AVIR stock enjoyed some gains recently on Merck’s antiviral momentum. But Atea stock’s downfall on Tuesday put it below its 200-day line, according to MarketSmith.com.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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