A speculative bet on the race to develop a Covid-19 vaccine, VIR Biotechnology (NASDAQ:VIR) has been a highly volatile stock in recent months. Shares of VIR stock are down more than 30% at the time of writing. Additionally, investors should note this is a stock that is down nearly 75% from its all-time highs seen earlier this year.
Why the volatility?
Well, very simply, the market isn’t too enthused with the recent announcement that the vaccine trials will be effectively shut down.
In combination with GlaxoSmithKline (NYSE:GSK), VIR has been working on a potential Covid-19 vaccine, VIR-7831.
The decision made to close enrollment while data matures suggests this vaccine bet could be one that investors won’t win. There’s still a possibility of this trial continuing at some point on positive data over time. However, based on an initial efficacy data review of the first 300 patients hospitalized with Covid-19 enrolled in the ACTIV-3 trial, this recommendation was handed down.
The company noted in its press release “VIR-7831 met initial pre-specified criteria to continue to the next phase of the ACTIV-3 trial and there were no reported safety signals.” However, concerns about the potential long-term benefit of this vaccine ultimately led to the decision.
In other words, even if this trial were to resume, questions remain about the efficacy of this drug. Indeed, this is a major blow to VIR stock. Investors appear to be steering clear of this name right now.
Where to Go from Here for VIR Stock Investors?
As mentioned, there’s an outside chance this company could receive more encouraging data in the near future. However, these recommendations are typically viewed as very bearish signals on the success of the company’s vaccine efforts.
Given the head-start mega-cap competitors have in this race, it appears investors are losing faith in this stock in a big way.
VIR does have another Phase 3 “COMET-ICE trial in newly-diagnosed COVID-19 patients at high risk of hospitalization.” The company is eagerly awaiting the upcoming data from this trial.
All hope is not yet lost with VIR. However, investors can expect this stock to trade similar to an option in the coming weeks. Thus, I expect the heightened possibility of extreme volatility to keep most investors on the sidelines for now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.