William Blair starts Atea Pharmaceuticals with Outperform, $60 fair value

William Blair analyst Tim Lugo initiated coverage of Atea Pharmaceuticals with an Outperform rating and fair value for shares of $60. The company's lead program is AT-527, a purine nucleoside prodrug designed to inhibit viral RNA-dependent RNA polymerase, is in Phase II for the treatment of SARS-CoV-2 infection, Lugo tells investors in a research note. AT-527 has demonstrated "potent" antiviral activity against SARS-CoV-2 in vitro, says the analyst. Before the COVID-19 pandemic, AT-527 was evaluated in a Phase II study in patients with hepatitis C, where it demonstrated "potent antiviral activity and good safety and tolerability," adds Lugo. He expects treatment with AT-527 in the ongoing Phase II study will result in improvements in clinical symptoms and viral clearance when top-line results are released in the first half of 2021. Lugo views AT-527 as a "backstop against future pandemic flare-ups." similar to Tamiflu sales in response to the 2009 H1N1 swine flu pandemic.