As Merck and Pfizer predict incoming billions from their COVID drugs, Roche culls pandemic ties with Atea

Roche
(Roche)

Swiss major Roche is cutting its losses and casting aside its COVID-19 drug collab with biotech Atea Pharmaceuticals.

After the recent successes seen with Pfizer and Merck, it’s easy to forget just how high the pile of failed COVID drugs is: Although its Big Pharma peers have hit key wins and are penning supply deals like there’s no tomorrow, Roche and Atea are playing out a very different story.

The pair signed a $350 million deal just over a year ago for Atea’s antiviral, AT-527, coming after the biotech put its COVID program on the map a few months prior by raising a massive $215 million funding round.

Up to that point, Atea was perhaps best known for being set up by Jean-Pierre Sommadossi, Ph.D., co-founder of Sovaldi developer Pharmasset. But, as with so many other COVID assets, things quickly went downhill.

RELATED: Atea and Roche's COVID-19 antiviral flunks phase 2, prompting switch that will delay pivotal data

A month back, a key phase 2 trial of the candidate missed its primary endpoint in COVID patients, prompting Atea and Roche to consider changes that have delayed data from a pivotal study by around one year.

Roche appeared to be still in the game with Atea, despite the flop and the delay. Now, it wants out. “Roche has taken the difficult decision to end the partnership with Atea on the AT-527 programme in order to focus efforts on other COVID-19 activities,” it said in an update (PDF) after-hours Tuesday.  

This includes its internal diagnostics work as well as its antibody combo therapy with Regeneron in Ronapreve (casirivimab and imdevimab), which nabbed a formal approval in Europe just this week for certain COVID patients.

Under the pharma’s exit, all the rights and licenses granted by Atea to Roche will be handed back to the biotech, with the deal officially coming to an end in February.

Despite Roche walking away, Atea currently has no plans to ditch work on the drug, saying it is still working on its phase 3 trial.

“We remain committed to developing and delivering AT-527 as an oral antiviral that will address treatment needs for patients as COVID-19 continues to evolve,” said Janet Hammond, M.D., Ph.D., chief development officer of Atea. Data are expected from the middle of next year.

This might all be too little, too late, however: Merck-Ridgeback and Pfizer have in recent weeks both announced some strong COVID drug results for molnupiravir and Paxlovid, respectively, with countries eagerly looking to boost supply of the meds and both predicting sales worth tens of billions of dollars.

Should these drugs, plus others from the likes of GlaxoSmithKline-Vir, prove good enough in the real world to stop deaths and severe disease—like we’ve seen with new vaccines—demand for such therapies may simply fall off a cliff.

Atea's shares were down around 14% to $9.75 apiece premarket Wednesday morning.