The shares of biotech company Arcturus Therapeutics Holdings Inc. fell 55% on Tuesday, with investors responding to the results of a Phase 1/2 test of their candidate vaccine COVID-19 which an analyst said was disappointing.
Arcturus ARCT of San Diego,
said on Monday that it received approval from the Singapore Health Sciences Authority to proceed with a Phase 2 study of its candidate vaccine ARCT-021, which will involve up to 600 volunteers.
The approval is based on data from the Phase 1/2 trial, which showed that the vaccine produced neutralizing antibodies after a dose, albeit at lower levels than rival candidate vaccines. Arcturus hopes that its vaccine will not require a booster injection, making it easier to administer than vaccines that require two doses.
The company aims to generate Phase 2 interim data in early 2021 that will determine the optimal dosage and start a global Phase 3 study in the second quarter of 2021.
Raymond James downgraded Arcturus’ stock to outperform the news and said the data was “not impressive”.
“Although this latest data set does not completely harm the single-application ARCT-021, which can provide protection against COVID-19 infection in Phase 3, the lack of SARS-CoV-2 neutralizing antibody (NAb) titers or above those seen in sera convalescents reduces our confidence that ARCT-021 will be able to achieve competitive levels of vaccine efficacy with a single dose, ”wrote analysts led by Stephen Seedhouse in a note to customers. “At the very least, the question will be asked by the market and without an answer until Phase 3, thus limiting the short-term rise and justifying a Market Performance rating.”
The neutralizing antibody titers reached the lower end of the convalescent plasma titer range observed with the vaccines developed by Pfizer Inc. PFE,
with the German partner BioNTech SE BNTX,
and by Moderna Inc. MRNA,
he said. These vaccines have received emergency use authorization from the US Food and Drug Administration and are currently being implemented in the United States and other countries.
These vaccines have shown efficacies of around 90%, while Arcturus is potentially as low as about 62%, said Seedhouse.
“We admit that reaching 60% LV north with a single dose would be a decent result for the saRNA mechanism and would make ARCT-021 a viable vaccine (at least as competitive as AZD1222) given the huge global demand,” he wrote . “But this level of NAb titles … does not support the more optimistic outlook we had previously for ARCT-021 … it is not competitive with Pfizer / Moderna and … it will not make ARCT-021 a preferred vaccine in the States United”
Arcturus shares gained 280% in 2020, while SPDR S&P Biotech ETF XBI,
won 50% and the S&P 500 SPX,
increased by 16%.