Adagio Therapeutics (ADGI) Shares Are Up 80% Since Friday. Here's Why
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Shares of Adagio Therapeutics (NASDAQ: ADGI) are up over 33% in pre-open Monday after the company provided additional information related to its flagship SARS-CoV-2 antibody, ADG20, to address the new COVID variant Omicron.
Adagio shares closed 34.12% higher on Friday on growing concerns related to a new variant. This morning, the company issued an update on its ADF20 cocktail.
“Due to the highly conserved and immunorecessive nature of the epitope recognized by ADG20, we expect that ADG20 will retain activity against Omicron, as we have observed in in vitro models with all other variants of concern identified previously," said Laura Walker, Ph.D., co-founder and chief scientific officer of Adagio.
“None of the mutations present in the spike protein of the Omicron variant have been associated with escape from ADG20 neutralization. ADG20 was engineered for potent and broadly neutralizing activity in anticipation of both the rapid antigenic evolution of SARS-CoV-2 and the emergence of future SARS-like viruses with pandemic potential,” Walker added.
Moreover, Adagio stock received a further boost after Morgan Stanley upgraded to Overweight from Equal Weight and raised the price target to $49.00 per share from the prior $33.00.
“Current leading antibodies, such as those from Lilly and Regeneron, are compromised by Omicron. Adagio's ADG20 remains highly effective at neutralizing Omicron. Further, Adagio's ADG20 possesses preferable characteristics, including IM administration, long half-life up to 12 months, and coverage of multiple variants. In addition, Omicron may prompt regulators to help Adagio complete an interim analysis (now expected in 2Q22) sooner for quicker market access given the potential issues with other antibodies. Therefore, we added 4M doses of government stockpiling for Adagio’s ADG-20 in 2022 and now project ~$1.8B in sales,” analyst Matthew Harrison wrote in his report.
A higher price target reflects additional sales and a higher market share for ADG20.
Adagio stock is currently up 20.3% YTD.
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