What happened

Shares of Eiger BioPharmaceuticals (EIGR 0.91%) were sinking 18.9% lower as of 3:22 p.m. EDT on Monday. The big decline came after the company announced disappointing results from an investigator-sponsored clinical study evaluating Peginterferon Lambda-1a (Lambda) in treating outpatients with mild and uncomplicated COVID-19. 

So what

Stanford University School of Medicine conducted the study of Lambda in treating COVID-19 patients. In the study, Lambda didn't achieve a statistically different duration of viral shedding compared to placebo. This duration was determined by the time to receive two consecutive negative tests for SARS-CoV-2. The experimental drug also didn't reduce the duration of symptom resolution when compared with placebo.

Person in a lab holding a vial next to a microscope

Image source: Getty Images.

This doesn't necessarily mean the end of the road for Lambda as a potential treatment for COVID-19. Colin Hislop, Eiger's senior vice president of clinical and development operations, said in a statement: "We now know that untreated patients with mild COVID-19 clear virus quickly. Published reports have demonstrated evidence of a therapeutic benefit of interferons in hospitalized patients with more advanced COVID-19 disease."

Hislop noted that there are four other ongoing investigator-sponsored studies of Lambda in hospitalized patients with advanced COVID-19. Another investigator-sponsored study is evaluating the experimental drug as prophylaxis for exposed or at-risk patients.

Now what

Eiger has a potential catalyst on the way that could enable the biotech stock to rebound from today's bad news. The U.S. Food and Drug Administration is expected to announce an approval decision for Zokinvy in treating progeria and progeroid laminopathies, rare genetic disorders that cause symptoms of aging at very early ages, by Nov. 20, 2020.