Some biotech companies have made big profits since the Covid-19 pandemic struck. Synairgen (LSE: SNG) investors, sadly, have suffered a painful 2022 so far. The Synairgen share price is now down almost 85% over the past 12 months.
At 23p, the price is now firmly down in penny share territory. So what happened, and what does the company say about what to expect next?
Synairgen share price hit #1
Things were going swimmingly until 21 February, when the SNG share price suddenly fell off a cliff. On a single day, shareholders saw 84% knocked off the value of the company. And it was all down to a clinical failure.
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On that day, Synairgen announced that a Phase 3 trial of SNG001, a broad-spectrum antiviral drug candidate, “in patients hospitalised with COVID-19 did not meet its primary or key secondary efficacy endpoints“.
CEO Richard Marsden did, however, say that the drug was administered, “on top of standard of care which changed substantially between our Phase 2 and Phase 3 trials“. The improvement in standard care, he suggested, might have compromised the potential for SNG001 against the planned study endpoints.
Share price hit #2
Then the Synairgen share price took another hit on 17 March, after the US National Institute of Allergy and Infectious Diseases (NIAID) stopped recruiting patients for a Phase 2/3 trial that included SNG001.
Synairgen said it was, “due to the significant shift in the nature of the pandemic which would necessitate a substantial modification of the study design not feasible in this multiple treatment-arm, platform trial“.
The SNG share price fell 17% on the day. And since then, the shares have barely moved. So where is the share price going next?
It is enlightening to look beyond the past 12 months of share price movement, and back to pre-pandemic days. Since the end of December 2019, Synairgen shares are still up a very nice 260%.
What does that say about the power of long-term investing? It is still only a little over two years. But to me it shows that the big day-to-day ups and downs in the midst of the pandemic carried by far the most risk.
Where next for Synairgen?
So back to what the future might hold for the SNG share price. The company has just made a presentation at the 32nd European Congress of Clinical Microbiology & Infectious Diseases (ECCMID), in Lisbon. It covered the positive results from the firm’s earlier Phase 2 trial that were originally announced in July 2020.
So there’s nothing new there. But it does reinforce that work on SNG001 is still very much alive. And that maybe we shouldn’t give up on the Synairgen share price.
With the March announcement, the Synairgen CEO said, “we are actively seeking inclusion in platform trials for hospitalised patients and are working closely with the NIH to also find a suitable trial for SNG001 in home-based patients“.
So there is still some time to go. And it sounds like Synairgen is focusing on the treatments that will be needed as Covid-19 transitions to a long-term endemic status.
