Covid-19 opened up plenty of opportunities for smaller pharma companies to make their mark, by developing either vaccines or treatments. But it’s no easy task getting a product approved, and many have been unable to get their candidates across the finish line.
The latest victim in the space appears to be Humanigen (HGEN). Shares took a proper thrashing in Wednesday’s session, after the company disclosed that its experimental antibody Lenzilumab failed to make the grade as a treatment for hospitalized Covid-19 patients.
Topline data from the NIH/NIAID ACTIV-5/BET-B study showed the drug did not exhibit a statistical significance when compared to the placebo.
H.C. Wainwright’s Joseph Pantginis notes it might not be the end of the road for lenzilumab although the analyst doesn’t think the Covid indication is likely to be pursued anymore.
“While this is an unexpected and discouraging result, the dynamic and increasingly endemic nature of COVID-19 means the demand for additional studies assessing the efficacy of variant agnostic treatments is likely to persist,” Pantginis explained. “Nonetheless, following the release of these data, we expect the company to de-emphasize its COVID-19 program, and strategically realign its focus on company sponsored, as well as partner sponsored programs.”
Given lenzilumab is meant to treat cytokine storms, there are other indications where the drug could still work. These include graft vs. host disease (GvHD), chronic myelomonocytic leukemia (CMML), and CAR-T prophylaxis.
With this in mind, Pantginis points out the Phase 2/3 RATinG trial of patients who are at high and intermediate risk for acute GvHD is set to begin enrollment in the current quarter, while there should also be a readout of initial data from the Phase 2/3 trial of lenzilumab in chronic myelomonocytic leukemia (PREACH-M) early next year.
None of these, however, are enticing enough for Pantginis to keep on backing Humanigen right now. On account of the disappointing Covid data, the analyst downgrades HGEN stock from Buy to Neutral and the previous $28 price target is taken off the table.
It’s likely other downgrades will follow. Currently, based on 3 Holds, 2 Buys and 1 Sell, the analyst consensus rates the stock a Hold. (See HGEN stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.