Shares of Vir Biotechnology (NASDAQ:VIR) are plunging on Wednesday following the company's release of an update regarding one of its leading pipeline candidates. At 12:28 p.m. EST the drugmaker's stock was down by 33% after falling by as much as 35.3% earlier in the day.
Vir Biotechnology, in collaboration with GlaxoSmithKline, is developing VIR-7831, a potential antibody treatment for COVID-19. It is undergoing a phase 3 clinical trial as part of the Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV) Program, an initiative spearheaded by the U.S. National Institutes of Health (NIH). However, a sensitivity analysis of the data from the trial by the independent Data and Safety Monitoring Board (DSMB) raised concerns that VIR-7831 may not be a very effective treatment. As a result, the DSMB recommended that the VIR-7831 arm of the ACTIVE-3 trial be closed to enrollment, despite the medicine's meeting criteria to move on to the next phase. Note that the study did not raise safety concerns about VIR-7831.
Vir Biotechnology's shareholders had very high hopes for VIR-7831, and with good reason. The biotech company currently has no products on the market, and this experimental medicine is currently one of its most advanced pipeline candidates. Despite the growing availability of COVID-19 vaccines, there will likely be a need for effective therapies for the disease in the future. But given today's developments, the future of VIR-7831 is now uncertain, which explains why investors are choosing to sell off Vir Biotechnology's stock.