Shares of biotechnology company Arcturus Therapeutics Holdings Inc. declined 55% on Tuesday as investors reacted to the results of a Phase 1/2 trial of its COVID-19 vaccine candidate, which an analyst said was disappointing.
San Diego-based Arcturus ARCT,
said late Monday that the approval had been received from the Health Sciences Authority in Singapore to proceed with a Phase 2 study of its ARCT-021 vaccine candidate that would enroll up to 600 volunteers.
The approval is based on phase 1/2 trial data that showed that the vaccine produced neutralizing antibodies after one dose, although at lower levels than competing vaccine candidates. Arcturus hopes the vaccine does not require a shot shot, making it easier to administer than vaccines that require two doses.
The company aims to generate early 2021 interim Phase 2 data that will determine the optimal dosage and to launch a global Phase 3 study in the second quarter of 2021.
Raymond James downgraded Arcturus’ shares to outperform the news, saying the data was “overwhelming.”
Although this latest dataset ARCT-021, which can provide protection against COVID-19 infection in phase 3, is not a one-off disadvantage, the lack of SARS-CoV-2 neutralizing antibody (NAb) titers at or above levels repair. sera reduces our confidence that ARCT-021 is capable of achieving competitive levels of single-dose vaccine efficacy, ‘analysts led by Stephen Seedhouse wrote in a note to clients. “The demand will be minimized by the market and left unanswered until Phase 3, which will limit the upside short-term and justify a Market Perform rating.”
The neutralizing antibody titers reached the bottom of the recovery plasma titer range with the vaccines developed by Pfizer Inc. PFE,
with the German partner BioNTech SE BNTX,
and by Moderna Inc. MRNA,
he said. The U.S. Food and Drug Administration has granted emergency use of these vaccines and is currently being rolled out in the U.S. and other countries.
The vaccines have shown efficiencies of about 90%, while the Arcturus one is possibly as low as 62%, Seedhouse said.
‘We concede that reaching the north of 60% FE with a single dose would be a decent outcome for the saRNA mechanism and that ARCT-021 would become a viable vaccine (at least as competitive as AZD1222) given the great global demand, ‘he wrote. ‘But this level of NAb titers … does not support the more optimistic outlook for ARCT-021 … is not competitive with Pfizer / Moderna and will not make ARCT-021 a preferred vaccine in the US’
Arcturus shares rose 280% in 2020, while the SPDR S&P Biotech ETF XBI,
achieved 50% and the S&P 500 SPX,
increased by 16%.