Tillman Gerngross, PhD, Adagio Therapeutics co-founder and CEO

Adagio Therapeutics saw its share price plummet 79% Tuesday after it acknowledged the failure of its COVID-19 antibody candidate ADG20 to effectively neutralize the Omicron variant of SARS-CoV-2 (B1.1.529) in lab testing as it publicly theorized late last month.

Shares of Adagio cratered, closing Tuesday at $7.26 a share after plunging during the day as far as $6.30, an 82% free-fall from $34.26 at Monday’s close. The near free-fall occurred after Adagio announced that external in vitro analyses it conducted to assess neutralizing activity of ADG20 against Omicron fell far short of the neutralization predicted by the company.

The company publicized its theory in a November 29 announcement that sparked a near-doubling of its share price, which zoomed 86% to $46.83 from a $25.12 close on the previous trading day, November 26.

However, the latest in vitro data, generated through both authentic and pseudovirus testing of Omicron, showed a greater than 300-fold reduction in neutralizing activity of ADG20 against Omicron, according to Adagio.

“While the individual mutations present in the Omicron receptor binding domain were not associated with escape from ADG20 in the context of an original strain of the virus, new data show that the combination of mutations present in the Omicron spike protein led to a reduction in ADG20 neutralization that was not suggested by prior data,” conceded Adagio co-founder and CEO Tillman Gerngross, PhD.

Adagio based its theory on activity seen in in vitro models with all other known variants of concern, the immunorecessive nature of the epitope recognized by ADG20, which the company noted was highly conserved among clade I sarbecoviruses and not readily targeted by the endogenous neutralizing antibody response.

Adagio also cited previously disclosed in vitro studies in which ADG20 retained activity against prior variants of concern including Alpha, Beta, Delta, and Gamma—as well as in vitro data showing that ADG20 had retained neutralizing activity circulating SARS-CoV-2 variants that included the Lambda, Mu, and Delta plus variants.

“We expect that ADG20 will retain activity against Omicron, as we have observed in in vitro models with all other variants of concern identified previously,” Laura Walker, PhD, Adagio’s co-founder and CSO, stated November 29.

A future role for ADG20?

That earlier data, according to Adagio, suggests ADG20 may still play a role in treating COVID-19 outside of Omicron.

“The continued prevalence of the Delta variant in the United States and other countries, evolution of SARS-CoV-2 variants, and potential future coronaviruses mean a multitude of therapies and approaches are needed,” Gerngross stated Tuesday. “With an expert team committed to advancing antibody solutions that combat this unprecedented pandemic and a strong balance sheet, we’re conducting additional analyses to assess the optimal path forward with ADG20 as both a prophylactic and treatment option for COVID-19.”

ADG20 is one of two antibodies studied by Adagio for neutralization of Omicron. The other is ADG10, for which the company conducted in vitro analyses—but it, too, showed minimal neutralizing activity against the Omicron variant in both authentic and pseudovirus neutralization assays.

Adagio was spun out last year from Adimab, a Lebanon, NH-based technology provider focused on the discovery and optimization of fully human monoclonal and bispecific antibodies. Gerngross is also the co-founder and CEO of Adimab, which transferred to Adagio all of Adimab’s coronavirus-related assets. Adimab was founded in 2007 by Gerngross and another pioneer in yeast biotechnology, K. Dane Wittrup, PhD, of MIT.

Adagio launched in July 2020 with a $50-million Series A financing led by Polaris Partners and Mithril Capital. In November of that year, GV (formerly Google Ventures) stepped up its investment in Adagio from the Series A by leading the company’s $80-million Series B round.

Also that month, Adagio filed its IND with the FDA for ADG20, which was engineered to confer a longer duration of protection than its precursor ADG2 by extending the antibody’s serum half-life.

“In our antibodies, with the half-life extension and potency, we think we have protection for over a year,” Gerngross told GEN Edge at the time. “That’s very compelling vis-a-vis vaccines, because at this point, we don’t know how long [the protection of] vaccines will last.”

In May, Adagio collected another $336 million in Series C financing led by RA Capital Management, with GV and Adimab among participating investors. The proceeds were intended to support continued advancement of ADG20.

As a result of ADG20’s disappointing in vitro results, Adagio said, it was evaluating next steps for ADG20, a monoclonal antibody candidate designed to provide broad and potent neutralizing activity against SARS-CoV-2, including variants of concern, for the prevention and treatment of COVID-19 with potential duration of protection for up to one year with a single injection.

ADG20 is now in global late-phase trials—the Phase III EVADE trial (NCT04859517) assessing the antibody’s prevention of COVID-19; and the Phase II/III STAMP trial (NCT04805671), evaluating ADG20 as a treatment for COVID-19.

Pausing patient recruitment

Adagio said it plans to pause patient recruitment in the STAMP trial at clinical sites in South Africa, where Omicron has become the dominant variant of the virus.

Last month in announcing initial in vitro data, Adagio said it was planning submissions to regulatory agencies seeking emergency use authorization (EUA) “in mid-2022.”

Investors reacted to ADG20’s falling short against Omicron by sending Adagio shares plunging 67% in premarket trading, then stepping up the selloff through Tuesday.

“ADGI’s in vitro results indicating 300-fold lower neutralization activity against Omicron is a negative surprise,” Jefferies analyst Michael Yee and three colleagues wrote in a research note. “The negative data is likely due to the totality of mutations causing an allosteric change or other steric or conformation change to the binding spot that impacts neutralization.”

Reduced effectiveness vs. Omicron is not limited to ADG20 but has significantly impacted all other antibody therapies for COVID-19, Yee added. He cited data from a public preprint showing neutralization reductions of 10% or more for three products consisting of five antibodies: Eli Lilly’s combination or “cocktail” of bamlanivimab and etesevimab; Regeneron’s cocktail of REGEN-COV™ (casirivimab and imdevimab), marketed in Europe by Roche as Ronapreve™; and AstraZeneca’s cilgavimab (AZD1061), one of two antibodies in the company’s cocktail AZD7442.

Smaller reductions in effectiveness were recorded by AstraZeneca’s other antibody within AZD7442, tixagevimab (AZD8895; 6.86%); Brii Biosciences’ BRII-196 (7.258%); Vir Biotechnology and GlaxoSmithKline’s (GSK) Sotrovimab (0.181%); and Singlomics Biopharmaceuticals’ DXP-604 (0.287%).

“There is a question on the efficacy of antibodies on Omicron overall right now,” Yee and colleagues wrote.

The Jefferies analysts went further, acknowledging that Adagio’s latest results for ADG20 raised two potential questions: What are its prospects of generating successful Phase III data next year? And what role can ADG20 play in treating COVID-19 if Omicron spreads globally and becomes a dominant strain in 2022 while the late-phase trials are continuing, and other antibodies either gain or approach market approval—despite drawbacks such as declining effectiveness vs. future variants or multiple injections?

On a bright spot if we had to find some, ADGI is likely strong ex-Omicron and thus retains value, and in the future there are likely to be OTHER [emphasis in original] variants and the conserved nature of binding may drive efficacy against those strains, which means ADGI would have value outside of Omicron,” Yee and colleagues added. “This will be left to [Wall] Street debate as the pandemic evolves.”

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