The Surprising Move Vir Stock Made After Winning Covid Drug Authorization

GlaxoSmithKline (GSK) and Vir Biotechnology (VIR) won Food and Drug Administration authorization for a Covid treatment on Wednesday, but Vir stock slipped Thursday.


The drug, dubbed sotrovimab, is now the third antibody-based regimen in the U.S. It gained authorization for patients with mild or moderate Covid-19 and at risk of worsening. The companies designed the treatment to withstand existing variants.

For GSK, the authorization likely won’t be financially material, SVB Leerink analyst Geoffrey Porges said in a report to clients. But this move could generate a “large cash windfall” for Vir.

“For Vir, this is a considerable validation of their platform and development capabilities and elevates the company into the ranks of companies with commercial products much faster than would have normally been expected,” he said.

But in morning trading on the stock market today, Vir stock tumbled 5.4% near 43.30. GSK stock dipped a fraction, near 38.60.

Vir Stock Dives Despite FDA Win

The human body creates antibodies to fight foreign material known as antigens. In this case, sotrovimab was created from an antibody discovered in the blood of a SARS patient in 2003, Porges said. Like Covid-19, the disease called SARS stemmed from a coronavirus.

In March, GSK and Vir said giving sotrovimab to high-risk Covid patients resulted in an 85% reduction in the risk of hospitalization or death. The companies are also planning to ask for a full approval later this year, Needham analyst Joseph Stringer said in a report.

“We continue to believe Covid-19 antibody treatments will play a key role in the Covid treatment landscape going forward as vaccinations plateau and the pandemic likely shifts to an epidemic phase,” he said.

Stringer kept his buy rating and 80 price target on Vir stock.

A Third Antibody Regimen

GSK and Vir now join Regeneron Pharmaceuticals (REGN) and Eli Lilly (LLY) with an antibody-based drug for high-risk Covid patients. The other drugs include two antibodies, however.

Regeneron sells two of its own antibodies packed into one drug. Lilly packaged an antibody first discovered by AbCellera Biologics (ABCL), known as bamlanivimab, with an Amgen (AMGN) antibody called etesevimab.

Previously, though, Lilly sold bamlanivimab as a single antibody drug. But the variant first found in South Africa undid its effectiveness. That led to bamlanivimab losing its authorization in the U.S. Now, the Lilly-Amgen cocktail is allowed for use in the U.S.

But Porges says GSK and Vir designed sotrovimab to avoid variant resistance from the outset. The antibody recognizes a binding site that’s highly conserved across coronaviruses. So far, none of the variants have mutated at that binding site.

Vir Stock Reverses Down

Vir stock initially jumped in premarket trading Thursday, but shares fell at the opening bell. Shares continued to hit a ceiling at its 50-day moving average, according to

Shares soared more than 32% on the day in March the companies unveiled interim test results for sotrovimab. Since then, Vir stock has fallen off. Still, on a year-to-date basis, shares have climbed close to 71%.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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