Please ensure Javascript is enabled for purposes of website accessibility

Why Aligos Therapeutics Stock Crumbled Today

By Eric Volkman – Jan 6, 2022 at 6:21PM

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 is pulling the plug on a once-promising treatment targeting hepatitis B.

What happened

Clinical-stage biotech Aligos Therapeutics (ALGS -4.54%) had some bad news to report on Thursday. As a result, unforgiving investors sent the company's stock down by almost 57%, making it one of the sector's steepest decliners today.

So what

Biotechs without any commercialized products are heavily dependent on the results of the clinical trials for their pipeline programs. This was the issue with Aligos on Thursday; in the morning the company divulged that it is halting the further development of its experimental drug ALG-010133, which targets chronic hepatitis B (CHB).

A scientist working on a lab sample.

Image source: Getty Images.

The decision was made based on data from a phase 1 study of the drug, which demonstrated that with ALG-010133, "at the projected efficacious dose ... there is no meaningful [hepatitis B surface antigen] reduction" in patients with the disease.

"We are disappointed that the antiviral activity data from this study indicate that ALG-010133 cannot meaningfully contribute to achieving functional cures in CHB," Aligos CEO Lawrence Blatt said. 

"Hepatitis B is a very challenging virus that will likely require combination regimens involving distinct mechanisms of action in order to achieve functional cure," he added.

Now what

In its press release admitting defeat, Aligos hastened to point out that it has numerous other treatments in its pipeline.

The young biotech, which was founded in 2018 and listed on the stock exchange in 2020, will continue to focus on its efforts to combat hepatitis B and other liver diseases, in addition to various viral infections. The withdrawal of ALG-010133, however, is a tough blow that the clearly still-ambitious company will need to find a way to recover from.

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.

Premium Investing Services

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