Atea Pharmaceuticals $AVIR Shocking EPS and Revenue Beats

AVIR stock rose 16% in after-hours trading on February 28, 2022, after the company reported shocking EPS and revenue beats.

Atea Pharmaceuticals Reports Fourth Quarter and Full Year 2021 Financial Results

Atea Pharmaceuticals, Inc. (Nasdaq: AVIR), a clinical-stage biopharmaceutical company, today reported financial results for the fourth quarter and full year ended December 31, 2021 and provided a business update. Atea Pharmaceuticals reported Q4 EPS of $1.34 versus the consensus estimate of 17c. The company reported Q4 revenue of $192.18M versus the consensus estimate of $85.73M. Collaboration revenue was $192.2M in Q4. All collaboration revenue was derived from the Roche License Agreement, which was entered into in October 2020. Upon notice of termination in November 2021, the Company recognized all remaining deferred revenue related to the Roche License Agreement.

“During 2022, we expect to make meaningful progress advancing three Phase 2 programs in COVID-19, HCV and dengue fever,” said Jean-Pierre Sommadossi, PhD, Chief Executive Officer and Founder of Atea Pharmaceuticals. “For COVID-19, our priority is to develop a combination regimen with bemnifosbuvir and a protease inhibitor. We believe that combination therapies will be needed to treat broader patient populations, as new COVID-19 variants occur, and viral drug resistance will likely emerge to protease inhibitor monotherapy. Nucleos(t)ide analogs target a highly conserved enzyme responsible for viral replication and have a higher barrier to resistance than drugs in other antiviral classes.”

“The recent in-licensing of RZR expands our pipeline and accelerates the timeline of our HCV program with a Phase 2-ready NS5A inhibitor. We believe that the combination of RZR and bemnifosbuvir has the potential to be a best-in-class pan-genotypic combination regimen to help fight the increase in HCV infections caused by the opioid crisis, IV drug use and HCV reinfection,” continued Dr. Sommadossi. “Additionally, we are making significant progress advancing AT-752 as a potential first antiviral treatment for dengue fever, the most prevalent mosquito-borne viral disease with a large global disease burden. We are planning to launch the Phase 2 trial for AT-752 in the first half of the year.”

“Looking forward, we anticipate several important milestones and data readouts from our programs during the year. Importantly, we have the financial strength and a seasoned management team to advance these programs through key clinical and regulatory inflection points,” concluded Dr. Sommadossi.

Bemnifosbuvir (AT-527) Program Update for COVID-19

Bemnifosbuvir Combination Program: Atea is conducting in vitro studies evaluating the combination of bemnifosbuvir with selected protease inhibitors to explore antiviral synergy and mitigation of potential viral drug resistance. Data from these ongoing in vitro studies will be the foundation for the Phase 2 clinical development of bemnifosbuvir in combination with a protease inhibitor.

Bemnifosbuvir Development Summary: In 2021, Atea reported data from two monotherapy Phase 2 clinical trials evaluating bemnifosbuvir for the treatment of COVID-19. One study was conducted in hospitalized adult high-risk patients with moderate COVID-19, while the second was conducted in adult outpatients with mild/moderate disease (MOONSONG). Although the Phase 2 MOONSONG trial did not meet its primary endpoint and the Phase 2 hospitalized study was closed out prior to completion, there were consistent positive trends in antiviral activity (~0.5 log10 reductions) observed after dosing with 550 mg twice daily (BID) and 1100 mg BID in sub-groups of patients at high risk for disease progression in exploratory analyses. In addition, results from a bronchoalveolar lavage study in healthy subjects showed that bemnifosbuvir was efficiently delivered to the lungs (epithelial lining fluid), the primary site of SARS-CoV-2 infection. Collectively, these data provide positive human proof-of-concept antiviral activity data that support a combination strategy.

In December 2021, Atea announced that based on the changing COVID-19 landscape, the global Phase 3 MORNINGSKY trial would be closed out and the focus of the COVID-19 program would shift to development of combination therapy with bemnifosbuvir as its backbone.

Publication of Bemnifosbuvir Mechanism Data in Peer-Reviewed Journal: In February 2022, new data highlighting bemnifosbuvir (AT-527) were published in the peer-reviewed journal Nature Communications. The published data demonstrate bemnifosbuvir’s unique mechanism of action showing dual targets consisting of chain termination (RdRp) and nucleotityltransferase (NiRAN) inhibition.

In Vitro Results Demonstrate AT-527 Is Active Against Different SARS-CoV-2 Variants: AT-511, the free base of AT-527, has been shown to be a potent inhibitor of SARS-CoV-2 in vitro. Results evaluating antiviral activity against variants of concern and/or of interest, including Alpha, Gamma, Epsilon, Delta and others showed that AT-511 maintained its potency against all the variants tested to-date. These data confirm the key mechanistic advantage of the compound, which targets the highly conserved viral RNA polymerase.

Hepatitis C Virus (HCV) Program Update

Phase 2 HCV Combination Program: In January 2022, Atea announced that it had obtained exclusive worldwide rights to develop, manufacture and commercialize RZR, an oral NS5A inhibitor, through a license agreement with Merck. Atea plans to initiate a Phase 2 combination study of bemnifosbuvir and RZR in the second half of 2022. Studies conducted by Atea have shown in vitro synergy of the combination of bemnifosbuvir/RZR in inhibiting HCV replication.

Since RZR is a Phase 2-ready NS5A inhibitor, Atea has prioritized clinical development of the bemnifosbuvir/RZR combination program due to its more advanced stage of development over the AT-777/AT-787 program. AT-777 was Atea’s former lead NS5A inhibitor program, which was paused at the onset of COVID-19 due to industry-wide challenges impacting the conduct of clinical studies at that time.

RZR Development for HCV: RZR has demonstrated potent antiviral activity in the picomolar range in preclinical studies. Clinical studies of RZR conducted by Merck showed a > 3 log10 viral load decline in HCV-infected patients as monotherapy. In Merck studies, RZR was administered to over 1,200 HCV-infected patients at daily doses of up to 180 mg for up to 24 weeks. In these studies, RZR was generally well tolerated, and the overall safety data showed no consistent treatment-related changes in vital signs, electrocardiogram safety parameters or laboratory parameters. Atea believes RZR’s pharmacokinetic (PK) profile supports once-daily dosing.

Bemnifosbuvir Development for HCV: In studies conducted by Atea, bemnifosbuvir has been shown to be approximately 10-fold more active than sofosbuvir (SOF) in vitro against a panel of laboratory strains and clinical isolates of HCV genotypes 1–5. In vitro studies demonstrated bemnifosbuvir remained fully active against SOF resistance-associated strains (S282T), with up to 58-fold more potency than SOF. Bemnifosbuvir has been shown to be generally well tolerated in more than 480 subjects (including healthy volunteers and patients with HCV or COVID-19). Atea believes bemnifosbuvir’s PK profile supports once-daily dosing for the treatment of HCV.

Recent AT-752 Program Update

Phase 2 Dengue Program: Atea plans to initiate a Phase 2 clinical trial in dengue endemic countries and a human challenge study in the U.S. during the first half of 2022. Atea expects to report results from these studies in late 2022.

Successful Completion of Phase 1 Clinical Trial of AT-752: In December 2021, Atea completed a Phase 1 clinical trial demonstrating that AT-752 was well tolerated in 65 healthy subjects who were administered either single or multiple doses. No premature discontinuations due to adverse events or serious adverse events were reported. Most adverse events were mild and there were no changes in laboratory parameters.

Publication of In Vitro and In Vivo Data of AT-752 in Peer-Reviewed Journals: In August 2021, data demonstrating the in vitro and in vivo activity of AT-752 against dengue virus infection was published in the peer-reviewed journal Antimicrobial Agents and Chemotherapy. The published data show AT-752 had potent in vitro antiviral activity against all dengue virus serotypes and other flaviviruses tested. AT-752 was also shown to reduce viremia and improve animal health and survival in a mouse model of dengue virus.

In January 2022, data demonstrating the in vivo efficacy of AT-752 against yellow fever virus was published in the peer-reviewed journal PLOS Neglected Tropical Diseases. The published data show that AT-752 reduced viremia and improved disease outcomes in a hamster model of yellow fever virus.

Corporate Updates

Senior Management Appointment: In February 2022, Atea announced the appointment of Nancy Gail Berry Agrawal, PhD, as Executive Vice President of Preclinical Development. Prior to joining Atea, Dr. Agrawal spent more than 25 years in roles of increasing responsibility at Merck & Co. Inc., and most recently served as Vice President of Pharmacokinetics, Pharmacodynamics, and Drug Metabolism.

Strategic Collaboration: In November 2021, Atea announced that the strategic collaboration pursuant to which it was jointly developing bemnifosbuvir for the treatment of COVID-19 with Roche was being terminated. The termination was effective as February 10, 2022. As a result, the rights and licenses granted to Roche by Atea under the strategic collaboration have terminated and Atea has full rights to continue the clinical development and future commercialization of bemnifosbuvir on a worldwide basis.

Fourth Quarter and Full Year 2021 Financial Results

Cash and Cash Equivalents: $764.4 million at December 31, 2021 compared to $850.1 million at December 31, 2020.

Revenue: Collaboration revenue was $192.2 million and $351.4 million for the fourth quarter and full year 2021, respectively, compared to $48.6 million and $48.6 million for the corresponding periods in 2020. All collaboration revenue was derived from the Roche License Agreement, which was entered into in October 2020. Upon notice of termination in November 2021, the Company recognized all remaining deferred revenue related to the Roche License Agreement.

Research and Development Expenses: Research and development expenses were $57.8 million and $167.2 million for the fourth quarter and full year 2021, respectively, compared to $13.8 million and $38.0 million for the corresponding periods in 2020. The increase in research and development expenses was primarily due to an increase in external expenses related to the contract research organization and contract manufacturing organization services in conjunction with the advancement of product candidates for the treatment of COVID-19 and dengue fever. The research and development expenses include Atea’s share of costs incurred by Roche and increases in internal spend primarily due to an increase in personnel-related expenses, including salaries, benefits and stock-based compensation expense for the Company’s research and product development employees and consulting fees and other research and development expenses. In addition, the Company recorded a $25.0 million expense during the fourth quarter 2021 due to an upfront payment related to the in-license of ruzasvir from Merck.

General and Administrative Expenses: General and administrative expenses were $13.2 million and $45.8 million for the fourth quarter and full year 2021, respectively, compared to $14.1 million and $21.6 million for the corresponding periods in 2020. The increase in general and administrative expenses was primarily due to the expansion of the Company’s organization and reflected an increase in payroll and personnel-related expenses, including salaries, benefits and stock-based compensation expense and other general and administrative expenses, partially offset by a $7.0 million fee paid during the fourth quarter of 2020 in connection with the Roche License Agreement.

Income Taxes: Income taxes were $4.1 million and $17.4 million for the fourth quarter and full year 2021, respectively, compared to $0 and $0 for the corresponding periods in 2020. The increase in income tax was primarily due to realization of income as a result of the recognition of revenue in 2021 associated with the Roche License Agreement.

Net Income (loss): Net income was $117.1 million and $121.2 million for the fourth quarter and full year 2021, compared to net income of $20.7 million and net loss of $10.9 million for the corresponding periods in 2020.

📺 Atea Pharma’s Covid antiviral misses mark in mid-stage trial

Atea Pharma's Covid antiviral misses mark in mid-stage trial

📉 AVIR Stock Technical Analysis

Both the long and short-term trends are negative. AVIR is one of the lesser performing stocks in the Pharmaceuticals industry. 69% of 269 stocks in the same industry do better. AVIR is currently trading near the lower end of its 52-week range, which is not a good sign. AVIR is lagging the S&P500 Index which is trading in the middle of its 52-week range.

There is support at 5.91 from a horizontal line in the weekly time frame.

There is a resistance zone ranging from 7.29 to 7.36. This zone is formed by a combination of multiple trend lines and important moving averages in the daily time frame.

The technical rating of AVIR is bad and it also does not present a quality setup at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. AVIR stock has a Setup Rating of 3 out of 10. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when AVIR stock consolidates and has a Setup Rating of 8 or higher.

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