SVB Leerink cuts Atea Pharma PT to $20 from $60

Atea Pharmaceuticals

SVB Leerink slashed its price target for Atea Pharmaceuticals (NASDAQ:AVIR) to $20 from $60 but maintained its “outperform” rating after the company’s Phase 2 MOONSONG trial in COVID-19 outpatients did not hit its primary endpoint on viral load reduction, compared with placebo.

On Oct. 19, shares of Atea tumbled $26.70 to close at $13.82 on heavier than normal volume of 129 million shares.

“Atea is now considering modifications to the ongoing Phase 3 MORNINGSKY trial, which would delay that readout by a year to the second half of 2022,” writes analyst Roanna Ruiz, Ph.D.

She said that while the results suggest a longer development path and a GI safety signal for AT-527, “we still think the stock looks interesting at these levels as we believe near-term updates in the COVID-19 space and/or on behalf of Atea should bring more clarity (and, possible upside) to the story.”

In addition, Dr. Ruiz said the prespecified analysis from MOONSONG and prior Phase 2 hospitalized COVID-19 patient data indicate AT-527 has a “real efficacy signal, which leads us to believe today’s setback may skew more towards a trial design issue (possible to address) rather than a drug molecule issue (harder to address).”