By Sam Boughedda
Investing.com — Adagio Therapeutics Inc (NASDAQ:ADGI) stock jumped 58% after {0|Morgan Stanley}} upgraded it to overweight from equal weight following the emergence of the Covid-19 Omicron variant.
Matthew Harrison, an analyst at the investment bank, said the current evidence suggests the new variant will become the dominant strain in the short term, and due to the high transmissibility, there should be increased demand for antibodies that can neutralize the variant.
The analyst believes leading antibodies from Eli Lilly and Company (NYSE:LLY) and Regeneron (NASDAQ:REGN) are compromised by the variant. However, he told investors that Adagio's ADG20, an investigational antibody product candidate, is highly effective and has other "preferable characteristics."
Harrison increased his price target on the stock to $49 from $33, around $8 above its current price, while forecasting 4 million doses of government stockpiling of ADG20 and $1.8 billion in sales.
Slightly earlier in the day, Adagio released a statement saying none of the mutations in the Omricon variant escape from ADG20 neutralization. They added that further studies are ongoing and there are plans for an emergency use authorization submission in mid-2022.