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Atea Pharma Stock Plunges After COVID Treatment Trial Disappoints; Merck Jumps

Atea Pharmaceuticals could shed more than $2 billion in value Tuesday after the drugmaker said a mid-stage trial of its developing COVID treatment failed to meet expectations.

Atea Pharmaceuticals  (ATEA)  shares collapsed Tuesday after the drugmaker said its developing COVID treatment failed to meet expectations of reducing patient virus levels in critical mid-stage trial.

The drug, developed in partnership with Swiss pharma giant Roche, did provide some reduction in the viral load of high-risk patients with underlying conditions, but failed to meet the goal of a 'clear reduction' in patients with mild or moderate forms of the disease. 

The treatment, known as AT-527, was meant to be a potential competitor to Merck & Co.'s  (MRK) - Get Merck & Co., Inc. (MRK) Report 'molnupiravir', a pill designed for treatment of "mild-to-moderate COVID-19 in adults who are at risk for progressing to severe COVID-19 and/or hospitalization."

“The primary endpoint was not achieved in the overall study population in patients with mild or moderate COVID-19, however, MOONSONG topline data suggest that AT-527 has antiviral activity in high-risk patients with underlying health conditions as we previously reported in the Phase 2 hospitalized study," said founder and Atea CEO Jean-Pierre Sommadossi. 'Based on these and other AT-527 data, we with our partner Roche, are assessing potential modifications to the Phase 3 MORNINGSKY protocol that may likely lead to improved clinical outcomes” 

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“We remain committed to our goal of developing and delivering AT-527 as an oral antiviral that will address treatment needs as COVID-19 continues to evolve,” he added.

Atea Pharmaceutical shares were marked 70% lower in early trading Tuesday to change hands at $12.22 each, a move that could wipe more than $2.3 billion from its market value. 

Merck shares, meanwhile, jumped 1.8% to $78.54 each on the back of both the Atea trial results and a Reuters report that suggested the World Health Organization would lead the purchase of hundreds of millions of COVID treatments, tests and vaccines that could include the molnupiravir pill.