Please ensure Javascript is enabled for purposes of website accessibility

Why Altimmune Is Crashing Today

By Eric Volkman - Jun 30, 2021 at 3:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company halts development on both a COVID-19 vaccine and a drug targeting the disease.

What happened

Altimmune (ALT 5.98%) was plummeting in late trading on Wednesday, with the shares in free fall by nearly 40%. That was no surprise given the company's revelation the previous afternoon.

So what

Just after market close on Tuesday, Altimmune officially threw in the towel on the development of its COVID-19 vaccine, AdCOVID. It's also halting enrollment on a phase 1/2 clinical trial of its T-COVID drug, which had been under way.

Doctor with their head in their hands.

Image source: Getty Images.

AdCOVID, a nasal spray, disappointed in its phase 1 trial. While the vaccine appeared to be well tolerated, it produced lower-than-expected immune responses. The number and magnitude of those responses were also "substantially lower" than rival vaccines already approved for emergency use, Altimmune said.

As for T-COVID, although it was well tolerated with no observed serious adverse events, the biotech was having difficulty enrolling patients for the third of three planned cohorts. This is due to the significantly declining incidences of the disease throughout the U.S., which is rapidly lowering the chances of drafting participants.

Altimmune is therefore terminating further enrollment; it said it will consider its options once it evaluates the available data and consults with its T-COVID development partners.

Now what

Although investors are punishing Altimmune severely for these decisions, they're sensible given AdCOVID's weak performance, and the fact that the coronavirus is fading in many areas of the U.S. Altimmune has other vaccines and drugs in its pipeline, so perhaps this sell-off is an opportunity to buy a still-promising biotech on the cheap.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Altimmune, Inc. Stock Quote
Altimmune, Inc.
ALT
$12.40 (5.98%) $0.70

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.