Shares of Synairgen plc (LON: SNG) have pulled back following the rally fueled by the release of positive results from its in vitro study of SNG001 effectiveness against different variants of COVID-19.
The biotech company’s shares staged an impressive recovery in late May, fueled by the positive results before entering a consolidative trading range as investors took profits on their positions and sellers stepped in.
Synairgen shares are trading almost flat for the year following the latest rally as investors remain undecided on whether the company’s stock deserves to trade higher or lower.
WELCOME BONUS - Free Share Bundle When You Invest £50!
Get up to £500 cashback for investing with IG.
The biotech company is currently running the phase III clinical trial of its SNG001 interferon beta drug in the final testing stages. However, many expect the drug to be approved following positive results from phase I and II trials.
Synairgen’s SNG001 drug would be one of a few treatments approved to treat COVID-19 globally and could generate significant revenues for the company over the long term.
However, it appears that demand for a COVID-19 cure has substantially reduced as many countries have implemented vaccination programmes with some success.
Still, the number of people infected by the coronavirus has kept rising despite millions of people being fully vaccinated amid emerging strains of COVID-19, which has created a market for a COVID-19 treatment.
We can’t predict with any degree of certainty when Synairgen’s COVID-19 treatment shall be available in the market. Still, the drug is likely to be a commercial success given the significant threat posed by the multiple COVID-9 variants.
In the meantime, Synarigen shares are trading above a crucial support level, which could fuel a rally if it holds over the coming days. As a result, aggressive traders may choose to open bullish trades here.
However, a break below the level would invalidate this trade idea while bringing the next support level into focus.
*This is not investment advice.
Synairgen share price.
Synairgen shares have recently pulled back after the company released positive results from in vitro studies of SNG001 against COVID-19 variants.
Should you invest in Synairgen shares?
Synairgen shares are traded on the London stock exchange’s AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Synairgen shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies