Adagio Therapeutics (IVVD -2.38%) stock is getting beaten down again after a lousy day on Tuesday. Disappointing news regarding the clinical-stage biotechnology company's lead candidate, ADG20, pushed the stock 19.4% lower as of 1:14 p.m. ET on Wednesday.
Adagio Therapeutics' lead candidate is an experimental antibody treatment for COVID-19 that is currently in clinical trials for the treatment and prevention of COVID-19. On Nov. 29, the biotech stock rocketed higher after the company told investors that ADG20 could probably handle the omicron variant.
The stock fell hard yesterday after the company told investors that laboratory tests revealed a greater than 300-fold reduction in the neutralizing activity of ADG20 against the omicron variant.
The stock is slipping again today in response to at least two Wall Street downgrades. Guggenheim lowered its rating to neutral from buy, and Stifel cut its price target from $50 down to just $9.
Things will probably get worse before they get better for this biotech stock. The company plans to pause enrollment of new patients into clinical trials with ADG20. The studies are taking place in South Africa, where omicron is already the dominant variant.
Adagio Therapeutics has just one other experimental antibody in testing, ADG10. Recent analysis of ADG10 also showed minimal neutralizing activity against the omicron variant.
Adagio Therapeutics has enough cash to keep the lights on into 2023. Unfortunately, that might not be long enough if omicron continues on its path to becoming the dominant variant around the globe.