The shares of the biotech company Arcturus Therapeutics Holdings Inc. fell 55% on Tuesday, after investors responded to the results of a phase 1/2 study of its COVID-19 vaccine candidate that were disappointing, according to an analyst.
Arcturus ARCT from San Diego,
said late Monday that it has received approval from the Singapore Health Sciences Authority to proceed with a phase 2 study of its ARCT-021 vaccine candidate that will enroll up to 600 volunteers.
The approval is based on data from the Phase 1/2 study showing that the vaccine produced neutralizing antibodies after a single dose, although at lower levels than competing vaccine candidates. Arcturus hopes his vaccine does not require a booster shot, making it easier to administer than two-dose vaccines.
The company aims to generate interim Phase 2 data in early 2021 that will determine optimal dosing and to initiate a global Phase 3 trial in the second quarter of 2021.
Raymond James downgraded Arcturus’ stock to outperform market performance on the news, saying the data was “disappointing.”
“While this latest dataset does not completely affect the single ARCT-021, which may protect against COVID-19 infection in Stage 3, the lack of SARS-CoV-2 neutralizing antibody (NAb) titres at or above levels has been observed in restorative sera, our confidence that ARCT-021 will be able to achieve competitive levels of vaccine effectiveness with a single dose diminishes, ”analysts led by Stephen Seedhouse wrote in a note to customers. “Demand will at least be marketed and unanswered until phase 3, limiting the short term uptrend and justifying a Market Perform rating.”
The neutralizing antibody titers were at the lower end of the restorative plasma titers range seen with the vaccines developed by Pfizer Inc.PFE,
with German partner BioNTech SE BNTX,
and by Moderna Inc. MRNA,
he said. Those vaccines have been approved for emergency use by the U.S. Food and Drug Administration and are currently being rolled out in the U.S. and other countries.
Those vaccines have shown efficacy of about 90%, while the Arcturus vaccine may be only about 62%, Seedhouse said.
“We admit that reaching a value north of 60% with a single dose would be a decent outcome for the saRNA mechanism and make ARCT-021 a viable vaccine (at least as competitive as AZD1222) given the huge global demand he wrote. “But this level of NAb titers … does not support the more optimistic outlook we previously had for ARCT-021 … is not competitive with Pfizer / Moderna and … does not make ARCT-021 a preferred vaccine in the US”
Arcturus shares have gained 280% in 2020, while the SPDR S&P Biotech ETF XBI,
has won 50% and the S&P 500 SPX,
is up 16%.