Adagio Therapeutics Resumes Slide After Jefferies Downgrade

By Sam Boughedda

Investing.com — Adagio Therapeutics Inc (NASDAQ:ADGI) shares declined 13% Wednesday, resuming a recent slide, after analysts at Jefferies downgraded the stock following uncertainty over its Covid-19 drug ADG20, reversing bullish comments they made last week.

Earlier this month, Adagio reported that following in vitro analysis of ADG20 against the new Omicron variant, data showed a more than 300-fold reduction in neutralizing activity, resulting in a series of downgrades by analysts and Adagio's share price falling just under 79%.

However, not long after, Jefferies (NYSE:JEF) analyst Michael Yee told investors that two pre-print publications from "respected" independent labs suggested that ADG, in fact, retained its neutralizing activity against the variant. Adagio shares gained 123% that day in response. The pre-prints prompted Stifel analyst Stephen Willey to label the story, "even more complicated."

In the latest update, Jefferies analyst Yee downgraded the stock to Hold from Buy, lowering the price target to $10 from $46.

Yee wrote: "We moved to HOLD with a $10 PT due to uncertainty around next steps and development plan given the antibody does have reduced neutralization against omicron virus (although it does have some activity and at least appears similar to other antibodies on Omicron).

"The issue is it will take a lot of time to get more answers and we predict the Phase III timeline may be delayed."

The stock is currently trading around the $8.90 mark, and while Yee said it was very interesting near levels around $5, at levels around $10, the "uncertainty abounds."

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