Most coverage of pharmaceutical stocks centers around vaccines these days. But, we shouldn’t forget the sector encompasses companies producing drugs for just about every other ailment and treatable condition. Clinical stage biopharmaceutical producer Altimmune (NASDAQ:ALT) is releasing data today covering the results of recent 12-week clinical trial of ALT-801 (Pemvidutide), a weight loss treatment drug. Although the results are promising, shares of ALT stock are not reacting well.
What Happened With ALT Stock
Today began with ALT stock’s near 29% plunge from where it had been at yesterday’s close. Since then, it’s rebounded from where it was. But, it is still down by more than 7% for the day as of this writing.
ALT stock spent most of September on a gradual uptick that sent shares up by more than 16%. However, last week saw them drop off again. Although ALT primarily flatlined throughout the last week, hovering between $14 and $15 per share, this morning’s drop-off was steep. As such, it is resulting in a selloff.
These declines are likely due to some complications in the clinical trials that the new data also includes. According to a statement released by the company this morning, one of the patients involved experienced “elevated ALT levels” which hinted at signs of liver damage. The alarming levels subsided, though, after the dosing was halted.
Why It Matters
As drastic as this morning’s plunges may look, not all analysts are taking a bearish outlook. Analyst Yasmeen Rahimi of Piper Sandler went so far as to describe this morning’s selloff as a “as a great buying opportunity.”
As Rahaimi also adds, she feels the negative side effects are being “blown out of proportion.” Of course, this is causing investors to lose sight of the many positive results of the trials. She notes that the drug has the potential to address “glucose maintenance, reduction in lipid panel, and improved blood pressure across all dose cohorts.” She maintains her overweight rating for ALT stock as well as its $34 price target.
To provide more specific context, according to the statement, “subjects receiving pemvidutide achieved mean weight losses of 4.9%, 10.3%, and 9.0% at the 1.2 mg, 1.8 mg, and 2.4 mg doses, respectively, with the placebo group experiencing a mean weight loss of 1.6%. Weight loss occurred rapidly and consistently over 12-weeks. Side effects were mild to moderate, with no serious or severe treatment-emergent adverse events. Importantly, no discontinuations due to adverse events were reported.”
While it’s not uncommon for pharmaceutical testing to result in setbacks, the results of this stage of trials are unquestionably promising. Clinical trials are an opportunity for companies to improve upon a treatment and deal with potential negative side effects. The company will work to quickly iron-out negative results; when they do, the many positive ones remain as the company moves forward. Last year, it was noted that the company had “major pipeline potential” and this development only serves to support that theory.
What’s Next for ALT Stock
Altimmune is happy with these results and is set to move on to its next stage of development, which should be comforting to investors.
Treatment methods for obesity and weight-related aliments are a market with plenty of potential. That rings particularly true in country with an obesity epidemic as large as America’s. While ALT-801 is still in development, the results indicate that it is well on its way to market. As the company behind it continues to make progress, there is plenty of reason to believe that ALT stock will start reacting well.
Rahimi’s rating is worth paying attention to, as is this company. If she’s right, or even close, the investors who bought ALT stock now will be very happy.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.