Yahoo Finance Questor: this Covid treatment seems to take ‘variant anxiety’ in its stride
Vaccines have received all the attention but they are not humanity’s only weapon against coronavirus: we also have treatments. One is made by Synairgen, whose Covid-19 remedy consists of a naturally occurring antiviral protein, interferon beta, that is delivered directly to where it counts: the patient’s lungs.
While we all hope the vaccines will provide our path out of the pandemic there remains the fear that vaccine-resistant variants will allow the virus to stay one step ahead. If this happens it seems likely to this column that treatments will become increasingly important as a means to prevent severe disease and death.
This prompts the question: are treatments such as Synairgen’s able to cope with the virus as it evolves?
The early data look promising. Last week the company, which was spun out of Southampton University, announced the results of some “in vitro” – meaning in the laboratory as opposed to in the body – studies into how well its treatment dealt with the “Kent” and “South African” variants (renamed yesterday by the World Health Organisation the Alpha and Beta versions respectively), as well as the original or “Wuhan” strain.
Its announcement said: “Sixteen to 24 hours after infection, the presence of Sars-CoV-2 viral proteins was determined. SNG001 [Synairgen’s treatment] potently reduced virus to undetectable levels in cells infected with ‘Wuhan-like’, the UK/Kent variant and the South African variant.”
It said concentrations of the treatment “readily achievable following inhaled delivery of interferon beta” gave “90pc inhibition” of the virus. Of course we need to know how a treatment works in the real world, as well as in the laboratory, and trials on human patients in India, which should show us how well the drug works against the variant that originated there, begin this week, as The Telegraph reported yesterday.
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Read Questor’s rules of investment before you follow our tips
We tipped the stock as a speculative buy in November last year but couldn’t resist the temptation to bank a profit of 92pc just two months later. However, we said at the time that readers who remained interested in the company should look for a chance to buy back in more cheaply as the shares had been very volatile and might remain so.
We were not wrong: the price fell from the 171p at which we had advised readers to take profits to a low of 98p two weeks ago. Anyone who bought again then will have made a second handsome profit, on paper at least, as the price has now shot up again to 175.7p.
Things look more promising for the company now than they did at the time of our first tip so our advice is to look out for any further weakness as an opportunity, as before, to take a small punt.
Questor says: buy on weakness
Ticker: SNG
Share price at close: 175.7p
Update: Avacta
We tipped this maker of rapid-flow tests at the same time as Synairgen and with the same caution towards what was another speculative stock. It has had a slightly steadier ride and has more than doubled from our tip price of 113p to 241p at last night’s close.
On May 10 it announced that it had applied for approval to sell its lateral flow tests for professional use from the UK’s Medicines & Healthcare products Regulatory Agency. But yesterday it said an error had been made in the MHRA submission by an independent agency employed for the task by Avacta’s partner company Mologic and that as a result the submission had not actually been made until May 28.
More positively, it said it expected to receive approval for the test for the UK market from the MHRA “shortly”. It added: “In the meantime, the company has continued its discussions with distributors and customers for the antigen test and does not anticipate that the error will cause a delay to the first commercial sales of the product.” It has also applied to the authorities in a European country, which it didn’t name, for approval to sell in the EU.
As if that weren’t confusing enough it said a social media post on May 27 that claimed the MHRA had rejected its application concerned an unrelated Mologic antigen test.
Covid tests, like treatments, are likely to be needed for some time if the variants get the upper hand.
Questor says: hold
Ticker: AVCT
Share price at close: 241p
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