Adagio Therapeutics (ADGI) Stock Now Up 70%, Stifel Says Merck's (MRK) Molnupiravir is not a Competitive Threat to ADG20

November 29, 2021 11:08 AM EST
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Price: $7.09 +5.19%

Rating Summary:
    0 Buy, 3 Hold, 1 Sell

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    Up: 18 | Down: 18 | New: 37
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Adagio Therapeutics (NASDAQ: ADGI) stock is up around 70% today as investors continue to bet that alternative cures are needed and vaccines alone are unlikely to sufficiently address the COVID-19 pandemic.

Adagio shares soared in pre-open Monday after the company said its lead candidate ADG20 will retain activity against the new COVID variant Omicron.

“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,” Laura Walker, Ph.D., co-founder and chief scientific officer of Adagio.

Adagio stock also received a 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.

Moreover, Stifel analyst Stephen Willey has weighed in to reiterate a Buy rating on ADGI stock as he believes the new variant will provide a case study for ADG20 utility.

“While there are obviously many Omicron-related questions requiring answers over the coming days/weeks (i.e. transmissibility, symptomology, vaccine effectiveness, etc.), we believe ADG20’s neutralization breadth/potency, long duration of protection, and logistically- friendly administration profile would represent an attractive option for combatting these continued waves of variant-related uncertainty,” Willey said in a client note.

The analyst also sees ADG20 data as evidence that Merck's (NYSE: MRK) molnupiravir is an “unlikely competitive threat to ADGI’s ADG20.”

“While we’re more enamored with PFE’s oral antiviral data, we still see a clear bifurcation in the market for short-duration oral antiviral therapy in the treatment and post-exposure prophylaxis settings vs. the long-duration protection conferred by ADG20 in the both the pre-exposure prophylaxis and vaccine supplementation settings,” the analyst added.

Adagio stock currently trades at $42.71.



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