Synairgen Shares Plunged 19% on H1 Results. Can It Recover?

Key points:
Synairgen shares plunged 19% on H1 results despite its losses shrinking.
Investors are unconvinced about SNG001’s future as a respiratory drug.
Can Synairgen shares recoup their losses? Read on to find out.

The Synairgen plc (LON: SNG) share price plunged 19% after releasing its financial results for the six months to 30 June 2022. The company revealed that it incurred a pretax loss of £14.0 million compared to the £38.9 million loss in H1 2021.

Investors reacted negatively to the news, which adds to the main negative highlight in the report, which was the failure of the Phase 3 SPRINTER trial in hospitalised COVID-19 patients to meet its primary and secondary endpoints, triggering a massive crash in Synairgen’s share price.

Also read: The Best Biotech Penny Stocks Under $5 To Buy Right Now.

The biotech company highlighted some of the positive milestones achieved from the SPRINTER study, including SNG001’s effectiveness in reducing the relative risk (RRR) of progression from requiring low flow oxygen to more severe disease or death within 35 days.

Synairgen also pointed out the post hoc analysis of the data collected during the SPRINTER trial, which showed that SNG001 had the most substantial effect in patients with clinical signs of compromised respiratory function.

The company also presented the results from the SPRINTER study at two leading respiratory congresses, as the firm remained optimistic about SNG001’s potential as a broad-spectrum antiviral for people hospitalised with severe viral lung infections caused by a range of common seasonal viruses.

However, investors are less optimistic about SNG001’s potential as a treatment for other respiratory diseases than when the drug was on track to being a CVOID-19 treatment.

Synairgen hopes SNG001 can still be used as a treatment for people hospitalised with COVID-19, especially high-risk patients with compromised respiratory function.

Given today’s reaction to the Synairgen earnings results and operations update, it is evident that the company’s share price may not recover to its previous highs. The company’s R&D expenditure fell to £11.1 million versus last year’s £36.9 million.

Synairgen also announced the appointment of Dr Felicity Jane Gabbay to its board as a non-executive director to replace Theodora Harold, who stepped down immediately.

*This is not investment advice.

Synairgen share price.