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What is the future of biotech small caps ‘beyond’ Covid?

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What is the future of biotech small caps ‘beyond’ Covid ?


“…There are still plenty of opportunities, then, for small cap biotechs that came to prominence at the outbreak of the pandemic to help in the ongoing fight against Covid, particularly in regard to the continued pressing need for diagnostics…”


This week’s decision by the UK government to remove Covid legal restrictions, including the requirement to self-isolate, is just a particularly striking incidence of an accelerating worldwide trend to ease pandemic regulations. What is the implication for biotech small caps, many of which surged through 2020 on the back their contribution to the fight against the virus, and in which many private investors continue to hold a significant stake?

As we wrote in our roundup of so-called ‘Covid stocks’ last summer, the biotech sector offers tantalising opportunities for adventurous retail investors. There’s no doubt it’s fraught with risk. Most biotech startups fail to realise their bright dreams of bringing new treatments to market, one study of the US market finding that 92pc of biopharmaceutical companies are unprofitable, and only one in ten of their clinical programmes actually gets regulatory approval, often after agonisingly long development periods. Moreover, most face a continual struggle to secure the funding necessary to support them through their product development cycles. Little wonder, then, that biotech has traditionally been a specialist asset class overseen by fund managers with the technical expertise necessary to interpret the sector’s jargon-laden communications and intimidating trial data.

And yet, as the pandemic highlighted, often spectacularly, the sector is capable of seeding a handful of star performers able to generate extraordinary returns for investors, and to attract the notice of pharmaceutical giants willing to pay hundreds of millions for the next blockbuster treatment. Indeed, as pioneering research continues to illuminate our understanding of the genome, the sector is enjoying something of a ‘golden age’.

Biotech has been particularly volatile this year, caught up in January’s sharp rotation from growth stocks towards value as stockpickers anticipated tightening monetary conditions. For many private and institutional investors, biotech equities – like other speculative tech stocks – were beginning to look overvalued, artificially inflated by the unusual investment environment created by the pandemic. Indeed biotech stocks have been falling for a while. The Nasdaq Biotechnology index has fallen more 20pc since peaking last February, by comparison with the wider Nasdaq and the S&P 500, which have risen by 3pc and 17pc respectively. More than 80pc of recently listed US biotech and pharma stocks are now trading below their IPO price. The shift away from the sector has been aggravated by the withdrawal of many ‘tourist’ investors from biotech stocks – retail investors who had tried to hitch a ride on the industry’s star performers during the pandemic.


“…Big Pharma relies on ambitious, agile small caps to pioneer new drugs, which in turn need venture capital for funding to tide them through the long years before a breakthrough..”


And there are rumbling concerns over the prospect of increased regulatory scrutiny, the US Federal Trade Commission and its counterparts in the EU, UK and Canada trailing the possibility of tougher rules in response to the particularly high volume of recent mergers and acquisitions within the sector, and surging drug prices. According to one recent report there have been just 116 deals in the past year, down 18pc from 2020, and just over fifth lower than the average of the past ten years. That matters, because dealmaking is integral to the sector’s ecosystem. Big Pharma relies on ambitious, agile small caps to pioneer new drugs, which in turn need venture capital for funding to tide them through the long years before a breakthrough. Analysts fear tough new M&A rules would damage the sector’s capacity to renew itself.

But those concerns may be exaggerated. Regulators are more likely to target mega deals between large groups, rather than the acquisition of smaller companies. And the big US and European pharma groups, flushed with pandemic earnings, have an estimated $500bn earmarked for new acquisitions, which changing market conditions will prompt them to spend however the regulatory environment changes. As Covid – hopefully – recedes into the rear mirror, and patent protection on existing medicines expires, Big Pharma is obliged to scan the horizon for promising treatments to replace revenues. Biotech breakthroughs are generating plenty of fresh opportunities, and governments have pledged to invest in drug development after the pandemic exposed long term neglect.

But though the industry is now looking beyond the pandemic, the sector be engaging with Covid for some time to come. Scientists and health experts continue to warn that the pandemic has not been brought fully under control, many urging the UK government to hold off introducing charges on lateral flow tests, closing down PCR test centres, and removing restrictions to self-isolate following positive tests. Covid continues to be costly in human and financial terms. A quarter of UK employers say long Covid continues to be a primary cause of long-term sickness absence among their staff. A survey of more than 800 organisations, representing more than 4.3 million employees, found that one in four put it among the top three reasons for long-term absence.

And the virus is still hurting the wider global economy. As the Financial Times commentator Martin Wolf puts it, ‘A pandemic, we now know, is a comprehensive disaster.’ Quoting a new World Bank Development Report, Wolf notes economic activity contracted in nine out of ten of the world’s countries in 2020, a higher proportion than in the two world wars, the Great Depression and the global financial crisis. The sovereign debt ratings of more than 50 countries (including 44 emerging economies) were cut, and the number of people in extreme poverty increased by 80 million in 2020, reversing years of progress.

The world now has vaccines, of course. But though existing mRNA jabs offer an invaluable shield against severe illness, the virus is now beginning to outwit them, as shown by Omicron, which has developed 50 genetic mutations. A study by the UK Health Security Agency found effectiveness against symptomatic infection dropped to about 10pc some 20 weeks after a second dose, and a fourth dose of the BioNTech/Pfizer vaccine rolled out in Israel was largely ineffective in stopping Omicron infections.

Progress towards a vaccine tailored to Omicron is well advanced, Pfizer and BioNTech undertaking clinical trials with a view to producing a candidate next month. But the real prize is a ‘universal vaccine’ able to protect not only against known strains, but coronaviruses yet to emerge. The search is on, but it’s going to take some time. Sequencing the original Wuhan Covid-19 variant, and subsequent strains, was relatively straightforward: scientists were able to analyse each new variant directly under the microscope.

But a universal jab must hit a moving target, anticipating genetic Covid sequences as yet unknown. It’s the same challenge scientists face in finding a broadly protective vaccine against influenza, another fast-mutating virus with the capacity to develop strains that escape pre-existing immunity. Researchers are working on identifying so-called ‘conserved’ parts of the virus, proteins present in all coronaviruses, however much they mutate. A variant-proof vaccine would train the body to recognise this conserved region, prompting an immune response to a broader array of coronaviruses. The Coalition for Epidemic Preparedness Innovations (CEPI) estimates it won’t be ready till around 2024 to 2025.

There are still plenty of opportunities, then, for small cap biotechs that came to prominence at the outbreak of the pandemic to help in the ongoing fight against Covid, particularly in regard to the continued pressing need for diagnostics. Rapid test manufacturers are racing to produce the kits necessary to keep track of the Omicron variant, with shortages of swabs and membranes/test strips forcing price increases of 25 to 40pc.

Below we take another look at the companies we looked at in last summer’s article. The share price of nearly all has fallen – sometimes significantly – from highs reached at the peak of the pandemic, but each still has an interesting story to tell but amongst all the uncertainty in the market – as ever – there presents good opportunities for investors prepared to look carefully at those companies promising to add long term value to the fight against Covid.

In this article we look at five small caps that are looking at the next phase of the battle with Covid, the focus on diagnostics and anti-virus treatments.


Avacta Life Science


Avacta Life Sciences (AIM:AVCT) is a UK-based clinical stage oncology company developing new cancer therapies and diagnostics based on its proprietary Affimer and pre|CISION platforms.

The company’s strategy is to deliver near-to-medium term revenues from its diagnostic business – beginning with Covid detection kits – while working towards the rollout of innovative therapies for the multi-billion cancer treatment market. Avacta has established drug development partnerships with pharma and biotech leaders, including a research collaborations with Moderna and ADC Therapeutics, and a development and commercialisation deal with LG Chem Life Sciences. The company employs more than a hundred staff at sites in Cambridge and Wetherby, and has a US-based business development team.

The Affimer biotherapeutic is designed to address issues with existing cancer therapies, which, based on antibodies derived from testing animal immune systems, are not necessarily wholly effective when transferred to humans. Affimer is based on a naturally occurring human protein which Avacta believes will target tumours more effectively, and makes the treatment easier to produce.

The company’s leading Affirmer drug candidate AVA6000, based on the pre|CISIONTM chemotherapy platform, is a remodelled form of the industry-standard chemotherapy Doxorubicin. Doxorubicin is widely used to treat tumours but is imprecise, impacting the body beyond the tumour itself, making it uncomfortable and even toxic to certain patients. AVA6000 releases the drug’s payload into the tumour alone, thereby limiting body-wide exposure. Avacta believes that if AVA6000 can be proven to reduce the systemic toxicity of Doxorubicin in humans it has the potential to be applied to a range of other established chemotherapies.

The company’s near term aspiration is to enter the Doxorubicin market – expected to grow to $1.38bn within the next three years – through a licence deal that could generate an upfront payment of tens of millions of dollars. That would position it to roll out a series of innovations for the broader chemotherapy market, forecast to be worth more than $50bn by 2024. Avacta is carrying out human trials with a view to licensing AVA6000 as soon as possible: last summer the first patient was dosed in the company’s Phase I multi-centre trial, with the dose escalation phase expected to be complete by Q2 2022, followed by completion of the dose expansion phase by Q2 2023.

Avacta’s second most advanced cancer therapy is AVA3996, a ‘proteasome inhibitor’ which regulates cell-cycle progression. Like AVA6000 it is designed to address shortcomings of the established Velcade treatment, which generates significant side effects such as peripheral neuropathy. Scheduled for clinical development candidate selection by the end of 2022, AVA3996 could establish itself as a treatment for multiple myeloma and tumours such as pancreatic cancer, opening up a market estimated to be worth $1.7bn by 2023.

In November Avacta reported that the US Food and Drug Administration (FDA) had approved its Investigational New Drug (IND) application for AVA6000, allowing the company to expand its Phase I clinical trial, ALS-6000-101, into clinical trial sites in the US. The company has begun recruiting and dosing patients for this study at several clinical trial sites in the UK, and continues to expect the dose escalation phase for this trial to complete by Q2 2022 followed by completion of the dose expansion phase around mid-2023. Earlier this month Avacta said the first-in-human Phase I trial of AVA6000 Pro-doxorubicin was set to advance to the next dose cohort following a positive review of the safety data from the dosing of the first cohort.

Avacta’s diagnostics division uses the company’s platforms to develop diagnostic tests. The first, the AffiDX SARS-CoV-2 Antigen Lateral Flow Test, intended for professional use rather than self-testing, has been validated to test accurately against all emerging Covid variants, including Delta. The company claims ‘key performance benefits’ that ‘allow Avacta to competitively maintain … prices above that of cheaper tests’, including results detection within 20 minutes, and comfortable sample collection through mild nasal swabbing.

The group is hoping to tap a lucrative new Covid diagnostics market which it believes ‘will become a seasonal testing market similar to that for influenza’. Last year the total global SARS-CoV-2 antigen test market size was valued at $5.3bn and is expected to expand at a CAGR of 6.7pc from 2021 to 2027. Avacta’s test achieved ISO13485 accreditation last summer. Sales to the UK market are currently on pause due to a tightening of UK regulations that require the growing range of Covid tests to undergo further evaluation. The company continues to work towards placing the product on the market in all 27 countries of the EU for professional use. Avacta has entered into an agreement with life sciences distributor Calibre Scientific for the sale of the test across the European Economic Area, and the UK. Sales efforts are focused on large businesses for workforce testing, and on a range of other users of professional use tests such as elite professional sports teams and the travel industry. Avacta is also working with additional distributors in the Asia Pacific region.

The company is also seeking to enter the self-testing market, which offers a significantly larger commercial opportunity than professional use testing. Late last year it reported that the AffiDX SARS-CoV-2 antigen lateral flow test had received a CE mark ‘from a European Notified Body’ for use as a consumer self-test in the UK and EU.

Avacta’s share price is currently just under 50p, down from highs of 275p touched last summer. The primary value triggers to look out for are landmarks in the continued passage of AVA6000 and moves towards commercialisation of the company’s lateral flow test.



Novacyt (AIM:NCYT), the Anglo-French clinical diagnostics group, recorded spectacular growth in 2020 when it developed a PCR testing kit for Covid-19 just weeks after the virus was first identified.

The kit, which quickly secured regulatory approval in more than 50 countries, eligibility for World Health Organisation (WHO) procurement, and the award of a £150m contract with the UK government, sparked a remarkable financial performance. Novacyt’s revenue increased more than 20 times in 2020 to £277.2m, up from £11.5m for 2019, allowing the company to expand its manufacturing capacity a hundredfold, take on more than 200 new staff, launch nearly 30 Covid-related products, file more than 20 patents, and enter into collaborations with AstraZeneca, GSK, and Cambridge University. Novacyt’s share price soared from just under 300p to a stratospheric 1,194p that autumn, and the company entered 2021 with broker Numis discussing a target price for the shares at £14, more than a hundred times higher than 12 months earlier.

The company’s momentum was stalled as competition stiffened in an increasingly crowded market, and embroilment in a costly dispute with the UK’s Department of Health and Social Care (DHSC) over its second supply contract, obliging it to exclude more than £40m of DHSC H1 2021 revenue, more than half of that quarter’s sales, and take the further hits of recognising manufacturing costs of £6.9m relating to the disputed sales, and an exceptional one-off cost of £28.9m to write down an inventory built up in anticipation of further DHSC demand.

The company launched 18 new products last year, tailored for private testing markets in the UK and Germany, including a CE Mark Winterplex PCR test to diagnose Covid respiratory syncytial virus and types of influenza, and a CE Mark Escapeplex PCR test to diagnose new Covid variants. It also announced CO-Prep, a workflow solution for clinicians and laboratories testing for the virus, which could be adapted for other diseases. The company has also expanded its lateral flow test portfolio following the launch of its PathFLOW SARS-CoV-2 antigen and antibody flow tests for professional use earlier this year.

These initiatives have been stymied by the Government’s Coronavirus Test Device Approvals (CTDA) process, which requires suppliers of COVID-19 tests to submit data on their tests for validation if they wish to continue to sell them in the UK. The company has submitted 11 products for CDTA review, of which only two have been so far been added to the CTDA register of approved products.

A trading update last month reported an evolution in the company’s strategy following a ‘holistic review’ by new CEO David Almond. Novacyt’s research will be streamlined, and the company would ramp up investment ‘in non-COVID-19 product development to tackle high unmet needs and bolster our business development efforts’. 

In addition to seeking to make inroads into the private sector Novacyt continues to sell to NGOs and governments. It has secured new or extended supply contracts with organisations including the WHO and UNICEF, with which its agreement has been extended by 12 months to July 2022. And, the ongoing dispute notwithstanding, it has also signed a new contract worth up to £4.7m with the DHSC for the supply of its PROmate Covid tests to the NHS until 31 March 2022.

The company’s half-year report highlighted the financial damage wrought by the DHSC fallout. Its group gross margin before exceptional items was 71pc, delivering a gross profit of £38m, but after the exceptional DHSC related cost of sales gross margin was down to 4pc, and gross profit to £2.3m. It recorded an operating loss of £13.6m compared to a profit of £42.2m in H1 2020, and a loss after tax of £12.7m compared to a profit of £35.1m in H1 2020.

Novacyt’s January trading update reported underlying revenue for 2021 was £95.8m, compared to £277.2m for 2020, excluding £40.8m of DHSC revenues under contractual dispute. But it noted increased sales to private laboratories, with strong growth from its international distribution business. This financial year has seen a significant shift away from large, centralised contracts towards independent testing, focused on private laboratories and NGOs. Private laboratory revenues increased by 98pc year-on-year from £28.3m to £55.9m, including £10.5m of revenue from NGOs. Private testing accounted for 58% of 2021 revenue at £55.9m, compared to 10pc in 2020 at £28.2m. There is less focus on UK revenues, which represented 45pc of total revenue in FY2021 at £42.7m against 79pc in FY2020 at £219.4m. The company’s cash position at 31 December 2021 was healthy, £101.8m, compared to £91.8m at 31 December 2020 and £77.2m at 30 June 2021. It expects to announce its 2021 audited full year results in the week commencing 25 April 2022.

Battle-scarred by the DHSC dispute, Novacyt’s share price is currently around 185p, down 75pc in past year. But the 2020 revenue boost has allowed the company to beef up its research and vertical integration capabilities, rollout a cluster of new products, and make progress into the private market. Prospective investors should look out for further expansion into the private testing sector.

Omega Diagnostics


Omega Diagnostics (AIM:ODX) develops diagnostics products for professional and personal use in more than 75 countries

The company is organised into a two divisions, a Health and Nutrition business producing a range of food intolerance tests designed to allow healthcare professionals and their patients to identify lifestyle and dietary changes, and a Global Health wing, which prior to Covid was focused on VISITECT CD4 Advanced Disease test, designed to give people living with HIV in low- and middle-income countries access to rapid, convenient and affordable tests for monitoring the white ‘CD4’ blood cells that play an important role in the immune system.

In 2020 Omega was recruited to the campaign against Covid, joining the UK Rapid Test Consortium to jointly develop and manufacture an antibody test as part of the Government’s five pillar national testing strategy. The company went on to develop the VISITECT COVID-19 Antigen test, which led to a potentially transformative agreement last February with the DHSC to manufacture Covid lateral flow antigen tests to help meet the Government’s target of producing two million lateral flow tests per day. The Department wasted no time in loaning the company the manufacturing equipment it needed to quickly ramp up production, and anticipation grew the following month when a UK Public Sector contract disclosure indicated the contract was worth some £374m. Although Omega took the time to say that ‘care should be taken not to use this number as an estimate or forecast of the actual likely value of purchase orders to be received’ the figure inevitably became fixed in investors’ minds.

By the summer it was clear all was not going plan, Omega still waiting for confirmation on which test it would be required to manufacture, and conceding that it was ‘not in control’ of a process that was ‘taking longer than originally expected’. And by the publication of its half year results last month the company was acknowledging that the order may never be placed, stating that it was ‘very disappointed with the lack of progress and commitment’ from the DHSC. The contract expired in December, the company commenting this month that ‘it is hugely disappointing that [after] having acted in good faith to establish UK manufacturing for Government-issued COVID tests, we find that these tests are, in the main, sourced from China instead.’

Omega is attempting to move on, establishing a partnership with Lansdown Strategic Capital to sharpen its focus on commercial rather than public sector opportunities for Covid testing. The shift began to bear fruit when the company announced a partnership agreement with DAM Health Limited, an established UK Covid testing laboratory, for the exclusive use sale and promotion of Omega’s test through a network of some 100 clinics across the UK and Europe. DAM is currently using approximately 200,000 in-clinic COVID tests per month and has placed an initial purchase order worth £0.75m. Although – like other Covid diagnostics producers – Omega is waiting for the UK Health Security Agency to approve the test under the CTDA rules, the company expects to get the green light and is ‘hopeful that the partnership can be broadened to cover Omega products beyond the Covid space’.

Omega has also made progress towards gaining approval for the use of its Covid diagnostic for self testing as well as professional use. It has submitted the necessary documentation to regulators to secure approval for CE marking, allowing it to sell the test for home as well as professional use. The company is also seeking approval from the US FDA to sell the product for professional use in the United States. Earlier this month its VISITECT COVID-19 antigen test for self-test use achieved a CE mark. The company is ‘in discussions with commercial partners about how best to service the European market and other territories’ that recognise the mark.

Omega’s reset has continued this year with the appointment of a new CEO, Jag Grewal, formerly Managing Director of the company’s Health and Nutrition division, and a fundraise earlier this month that proposes to raise ‘between £4.6 million and £6.6 million’, that will be used to grow its Health and Nutrition business, relocate CD4 production to a new, purpose-built manufacturing facility in Cambridgeshire, and, in the longer-term, support a transition to a sub-contract model for COVID-19 test manufacture.

News of the fundraise was accompanied by a separate announcement reporting the conditional sale of Omega’s diagnostic test kit manufacturing business and facility in Alva, Scotland, for £1m, to Accubio Limited, a wholly-owned subsidiary of Zhejiang Orient Gene Biotech Co Ltd. The Alva site generated a £4.9m loss in the nine months to 31 December 2021 due to the collapse of the DHSC manufacturing deal. The agreement with Orient Gene includes transitional arrangements allowing Omega to continue to produce lateral flow tests, notably the VISITECT CD4 Advanced Disease test and the VISITECT COVID-19 antigen test.

Omega’s share price is currently bumping along at just over 5p, 94pc down on the year. The company’s progress will depend on its ability to continue to scale up growth in its profitable Health and Nutrition business, commercialise its CD4 product, and execute its sub-contract production model for Covid.

Open Orphan


Open Orphan (AIM:ORPH) was another biotech projected into the limelight during the pandemic, working with the UK government’s vaccines task force to organise the first Covid human challenge trial, in which some 90 volunteers were deliberately inoculated under carefully controlled conditions with a version of the virus to test its impact on the immunity system.

This month the company reported that the £3m study, conducted in partnership with Imperial College London, the Vaccine Taskforce and DHSC, and the Royal Free London NHS Foundation Trust, was successful, showing that a SARS-CoV-2 human challenge is safe in healthy young adults. 36 volunteers aged 18-29 years were infected with the original SARS-CoV-2 strain challenge virus, sustaining no serious health impacts. The company said the infection challenge model now has the potential to provide a ‘plug and play’ platform for testing therapies and vaccines using the original Covid strain as well as variants of the virus, facilitating the quick evaluation of candidate vaccines designed for future iterations of the disease.

Open Orphan’s trial models are suitable for a range of other infectious diseases. The company believes the pandemic has highlighted decades long neglect of investment in fresh treatments for continually evolving respiratory and infectious diseases like the common cold and influenza. Governments and pharmaceutical companies across the world are now sinking billions into new drugs generating a market forecast to grow from $20bn in 2019 to $250bn by 2025. Open Orphan’s human challenge trial services now encompass Covid, Respiratory Syncytial Virus, influenza, asthma, and human Rhinovirus hRV. The company has clinics and screening centres in London and Manchester that allow it to screen more than 500 volunteers each week.

Last month the company reported on progress to adding malaria the list, inoculated the a first cohort of volunteers with a manufactured malaria challenge agent. Malaria is produces more than 200 million cases and 600,000 deaths a year. The study is expected to complete in Q1 2022 with results in Q2 2022. If successful Open Orphan will be able to sign malaria human challenge study contracts to assess the efficacy of novel antimalarial drugs and vaccines. 

Open Orphan’s financial fortunes soared in 2020, allowing it to record Q4 revenues of £22m, up from £3.5m for the previous year. It has continued to make progress in pursuit of its aim of winning new and repeat contracts with leading pharmaceutical companies, including an £8.1m agreement for asthma challenge tests, a £5.7m agreement for testing influenza antiviral therapeutics, and a renewed £1.5m contract with a Big Pharma client to provide dedicated clinical pharmacokinetics support for an array of drug development programmes. The company has also signed a £5m influenza human challenge study contract with a client developing an antiviral drug for protection against respiratory viral infections.

Open Orphan’s most recent interims reported revenue of £21.9m, up from £6.4m in H1 2020, and an EBITDA profit of £2.1m contrasted with a loss of £4.1m in H1 2020. The company is keen to emphasis its core work beyond Covid, which is expected to account for around 70pc of its 2021 full year revenue mix, earning a projected £50m in 2022.

Open Orphan’s share price is currently around 15p, down 40pc over the year, having peaked at 40p last April. With its substantial investment in challenge trials the company continues to make solid progress in establishing itself as a go-to partner in the complex process of bringing new treatments to market.



Synairgen (LON:SNG), a respiratory company developing treatments for severe viral lung infections, is developing SNG001, an antiviral treatment with potential to address long Covid. The treatment boosts a naturally-occurring protein – used widely in the treatment of multiple sclerosis – that orchestrates the body’s antiviral responses. Despite vaccination programmes and early interventions, thousands of patients are still hospitalised every day due to Covid-induced breathing difficulties.

Synairgen has been researching SNG001 for more than 15 years, which is suitable for severe viral lung infections caused by regular common cold and flu viruses as well as Covid. The company has developed a formulation containing protein delivered locally to the lungs through inhalation, conducted multiple Phase I/II clinical trials in asthma, COPD, and Covid, and demonstrated successful activation of antiviral activity in the lungs by observing biomarkers, efficacy signals in patients with lower respiratory illness. SNG001 promises a broad-spectrum antiviral to treat patients with acute symptoms, with low or waning immunity. It is suitable for severe viral lung infections caused by regular common cold and flu viruses as well as Covid.

Tests so far indicate SNG001 is well tolerated. It can be self-administered at home, reducing strain on healthcare systems, and can be stored in concentrated form in freezers for over six years, and in ready to use format for three years. The company has reported positive results from its Phase II SNG001 trials, and further analyses have found that patients with significant breathlessness are three times more likely to recover when receiving SNG001. Last October Synairgen reported that an external ACTIV-2 study recommended that SNG001 advance into Phase 3 in mild to moderate Covid patients.

Unfortunately SNG001’s progress was dealt a major blow earlier this week, when the company reported highly disappointing topline results from its own Phase III SPRINTER trial assessing hospitalised Covid patients. The trial ‘did not meet its primary or key secondary efficacy endpoints’: patients who received SNG001 ‘were no more likely to be discharged from hospital than patients who received placebo’. The company is currently ‘analysing the full dataset to better understand all the findings’, and awaits ‘the Phase 2 data from the US NIH ACTIV-2 trial in home- based COVID-19 patients, and that trial’s larger, follow-on Phase 3 study, as part of the development path for SNG00.’

Synairgen’s interims, published last September, reported that preparations are underway for distribution and in-market support activity involving health care professionals and patient support programmes. It is progressing commercial scale manufacturing processes for ‘drug substance’ and ‘drug product’. Process qualification commercial scale manufacturing batches of the drug substance (the raw ingredient IFN-beta) have been made with partner Akron Biotechnology, and drug product in pre-filled glass syringes (the finished format, ready-to-use) has been made in partnership with Catalent at commercial supportive scale.

The company has also completed a drug product manufacturing commercial scale batch (currently under testing) using polyethylener blow-fill-seal container technology to mitigate against the global supply chain shortages of medical grade glass and the reduction of available syringe filling manufacturing slots caused by the number of vaccines and therapeutics in development for Covid. Synairgen recorded a loss before tax for the six months ended 30 June 2021 of £38.89m (30 June 2020: £5.07m loss), as it has ramped up research. But it still had cash of £46.21m, (30 June 2020: £10.88m).

The company’s share price plunged after this week’s SNG001 announcement, all the way from 173p to 25p. The price had rocketed to 246p in August 2020 after positive Phase II results were reported. Prospective investors will need to decide whether Synairgen can now pick up the pieces, and resume what once seemed promising progress towards an elusive treatment for long Covid treatment.