Atea Pharma Soars 33% as Merck Covid Pill Data is ‘Encouraging’

(Bloomberg) -- Atea Pharmaceuticals, Inc. soared by as much as 33% on Friday as Merck & Co., Inc. said its Covid-19 antiviral pill, molnupiravir, cut risk of death or hospitalization by half. Analysts say the Merck data could be a good sign for Atea’s AT-527, as the findings validate the benefits of oral antivirals for treating the virus. 

• The company was last trading 21% higher in New York
• “We also believe these data are encouraging for Atea’s AT-527, as they provide validation of the potential for oral antivirals to drive clinical improvements, while also leaving space to show significant room for further improvement,” William Blair analyst Tim Lugo wrote
  • Lugo wrote that AT-527 could have an edge over Merck’s treatment from a “mechanism-of-action perspective” and that Atea Pharmaceutical’s trial enrolled a “more mixed population,” in which some people had risk factors and some did not
• Morgan Stanley analyst Matthew Harrison also pointed out a boost for Atea Pharmaceutical’s treatment from the data
  • “We see this data as having a positive read-through to AVIR’s AT-527 which has better viral load reductions compared to molnupiravir. We expect AVIR significantly higher on the news as well,” he wrote
• SVB Leerink’s Roanna Ruiz writes, “We are not surprised that AVIR is up 30-35% in premarket trading on positive readthrough from Merck, as in our discussions there were some investor holdouts waiting for more proof-of-concept that antivirals can work for COVID-19.”

• NOTE: Earlier, Moderna, Vaccine Peers Lag After Merck Covid Pill Cuts Risks
• NOTE: Sept. 30, Atea Pharma Hits 5-Month High as Investors Await Key Covid Data

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