Atea downgraded at JPMorgan on shrinking COVID opportunity
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- Atea Pharmaceuticals (NASDAQ:AVIR) traded lower on Thursday after JPMorgan downgraded the antiviral developer to Underweight from Neutral, citing a limited market opportunity for its lead product candidate, bemnifosbuvir, in COVID-19.
- Bemnifosbuvir, a nucleotide polymerase inhibitor designed as an oral therapy, is currently undergoing a global Phase 3 trial for high-risk outpatients with COVID-19.
- Meanwhile, a Phase 2 trial for a combination therapy involving bemnifosbuvir is expected to generate initial data in Q4 2023 from patients with hepatitis C (HCV).
- Analyst Eric Joseph is not convinced about bemnifosbuvir's prospects in either indication.
- He argues that Paxlovid and Lagevrio, the oral COVID treatments developed by Pfizer’s (PFE) and Merck (MRK)/ Ridgeback Biotherapeutics, respectively, will continue to dominate in a shrinking market for COVID drugs as severe case counts fall.
- Citing a late market entry for bemnifosbuvir beyond 2025 and headwinds to a differentiated clinical benefit in Phase 3, Joseph expects Atea (AVIR) shares to remain under pressure.
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