Synairgen‘s (LSE: SNG) Shares soared Monday amid news that the largely unknown British respiratory therapy company had shown in a phase 2 clinical trial that its inhalable medication SNG001 reduced the chances that coronavirus patients would need a ventilator in a surprising 79%. According to an interview by the BBC, the chief scientist of the company that runs the trial called the results “a game changer” and went on to say that it could be “a breakthrough” in the battle against COVID-19, a sentiment it almost literally echoed an unaffiliated professor of metabolic medicine who was asked for comment.
While the results are still preliminary and need strong third-party confirmation, investors are already curious about whether SNG001 poses a threat to established competitors in the coronavirus therapy space, such as Gilead Sciences (NASDAQ: GOLDEN) and his antiviral medication remdesivir. Simply put, there’s a lot to look forward to when it comes to Synairgen’s new therapy, but that doesn’t mean you should rush to sell your Gilead stock.
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Worth looking closely SNG001
Synairgen’s double-blind, placebo-controlled clinical trial for SNG001 meets widely accepted standards for scientific rigor, and its sizable cohort of 220 patients suggests that its impressive results are probably not a statistical error. And Synairgen claims the drug reduced symptoms such as shortness of breath, thus helping patients who received it instead of a placebo return to the hospital after a median of six days. In contrast, patients who received the placebo were discharged from the hospital after a median of nine days. That said, it is not clear if this discrepancy is statistically relevant.
Unlike many of the medications in development for the coronavirus, SNG001 is an inhalable formulation of a natural chemical called interferon beta (IFN-beta) that the human immune system produces to fight viral diseases. When human immune cells in the lungs are exposed to interferon beta against the background of a viral infection, they can fight the infection more effectively, thereby protecting healthy cells and slowing viral growth. This phenomenon is not new to science, but Synairgen’s main innovation is the nebulization of IFN-beta so that patients can inhale it deeply into their lungs, where coronavirus infections are believed to be the most established.
Don’t expect remdesivir earnings to be threatened any time soon
For all its merits, biotech investors should realize that SNG001 is unlikely to replace remdesivir due to a combination of scientific and commercial factors. First, SNG001 will not be a direct competitor to remdesivir’s market share. Remdesivir has been shown to help COVID-19 patients recover a little faster than placebos, reducing the median hospital stay from 15 days to 11 days. However, the drug may or may not confer a survival rate benefit when examined under scientifically rigorous conditions, and researchers are already investigating whether it might work better when combined with other therapies. Therefore, SNG001 has a plausible chance of being one of these other therapies to use in conjunction with remdesivir for inpatients, but at this time there is insufficient evidence to suggest that it may be the only treatment necessary for people to regain good health. . .
Additionally, Synairgen remains a startup, with a market capitalization of just $ 284 million despite its promising preliminary results and growth in its shares. The phase 2 IFN-beta program for COVID-19 is its most advanced project, and the company had just $ 2.45 million in cash available in the last quarter, implying an urgent need to raise new funds. Simultaneously with its phase 3 trials soon to begin, Synairgen’s plans to expand SNG001 manufacturing aim to produce several hundred thousand doses per month by the end of the year.
In comparison, Gilead plans to produce at least 2 million doses of treatment regimens in December, a dramatically larger effort that is ongoing along with a series of follow-up clinical trials. With a market capitalization of $ 93 billion, Gilead’s shares are unlikely to grow as aggressively as Synairgen anytime soon.
But if SNG001 is found to be medically incompatible with remdesivir, a complexity that currently has no evidence to back up, and is also shown to be more effective, it could begin to capture some of remdesivir’s market share. For now, Synairgen has a lot of drug development and manufacturing escalation before it’s a credible threat to Gilead.
