Please ensure Javascript is enabled for purposes of website accessibility

Why Vir Biotechnology Stock Is Sinking This Week

By Keith Speights – Sep 24, 2021 at 6:02AM

Key Points

  • Goldman Sachs analyst Paul Choi downgraded Vir from buy to neutral.
  • Choi also reduced his price target for the stock, but it still reflects solid upside potential.

Motley Fool Issues Rare “All In” Buy Alert

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

Shares fell after an analyst's downgrade.

What happened

Shares of Vir Biotechnology (VIR -0.07%) were sinking 18.1% for the week as of the market close on Thursday. Vir was pulled down by the overall stock market sell-off earlier this week. However, its shares really took a dive after Goldman Sachs analyst Paul Choi downgraded the company from buy to neutral.

So what

It's best to avoid making investment decisions based on analysts' downgrades (and upgrades, for that matter). However, you can sometimes learn things by understanding why a given analyst is bearish about a given stock.

In this case, though, Choi actually isn't bearish about Vir. Yes, he downgraded the biotech stock, and even lowered his 12-month price target. However, that price target still reflects a 14% upside from the stock's closing price at the end of last week and a 39% premium to the current share price.

Two scientists looking through microscopes.

Image source: Getty Images.

Vir and its partner GlaxoSmithKline (GSK 0.89%) appear to have a winner with monoclonal antibody sotrovimab in treating COVID-19. Sotrovimab has won Emergency Use Authorization (EUA) in the U.S. and authorizations or approvals in several other key markets, including the European Union. Australia recently quadrupled its order of the monoclonal antibody after physicians reported positive results in treating COVID-19 patients.

Now what

Vir should have several potential catalysts on the way. GlaxoSmithKline and Vir plan to file for full U.S. Food and Drug Administration approval of sotrovimab later this year. Results from a late-stage study of the therapy in treating mild-to-moderate COVID-19 are expected within the next few months.

Vir also expects to report initial data in the first half of 2022 from a phase 2 study of a combination of VIR-2218 and VIR-3434 as a potential cure for chronic hepatitis B virus infection.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends GlaxoSmithKline. 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

Vir Biotechnology Inc Stock Quote
Vir Biotechnology Inc
VIR
$27.23 (-0.07%) $0.02
GSK plc Stock Quote
GSK plc
GSK
$33.99 (0.89%) $0.30

*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
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

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.