The omicron variant has sent several biotech companies higher as investors speculate which company will develop an effective vaccine against the new variant. However, shareholders in Adagio Therapeutics (NASDAQ:ADGI) may want to refrain from checking their portfolios today. After rising more than 50% in November, ADGI stock is down more than 75% today to an all-time low. The company reported new data concerning its ADG-20 drug that didn’t sit well with investors.
Previously, Adagio had reported that ADG-20 “will retain activity against omicron.” However, new data shows that isn’t exactly the case. CEO Tillman Gerngross announced in a written statement that:
“New data show that the combination of mutations present in the omicron spike protein led to a reduction in ADG20 neutralization that was not suggested by prior data.”
The goal for the ADG-20 drug was for the antibody to recognize the coronavirus spike protein and bind to it, which would prevent replication and neutralize the virus. However, new in vitro data testing showed a greater than 300-fold reduction decline in neutralizing activity against the omicron variant. The drug was tested with both the authentic and pseudovirus versions of the variant. Based on the results of the study, Adagio plans on pausing patient recruitment in its Phase 2/3 coronavirus trial at testing sites in South Africa.
What’s Next for ADGI Stock?
On the bright side, testing of the drug is still underway, and the company stated that it plans to speak with regulators and government agencies to discuss the potential role the ADG-20 drug can have for the treatment and prevention of the coronavirus. In previous studies, the ADG-20 drug was effective against prior variants of the coronavirus, such as alpha, beta and delta. For shareholders of ADGI stock, all hope isn’t lost yet. Gerngross explained that there still may be demand for ADG-20 due to the spread of the delta variant:
“With an expert team committed to advancing antibody solutions to combat this unprecedented pandemic and a strong balance sheet, we’re conducting additional analyses to assess the optimal path forward with ADG20 as both a prophylactic and treatment option for Covid-19.”
ADG-20 is still not authorized or approved for use in any country. Shareholders will want to stay up to date on any new findings that the company publishes.
On the date of publication, Eddie Pan 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.