After a steady upward trend since the beginning of the year, the BioWorld Infectious Diseases index has hit a speed bump for the first time and dropped almost 8% so far in August. Companies in the group focusing on treatments for COVID-19 took the brunt of the valuation decline as investors became notably anxious about other drug developers making it to market sooner with their COVID-19 therapies. (See BioWorld Infectious Diseases index, below.)

For example, after reaching a market closing value of $178.51 earlier this month, Novavax Inc.’s (NASDAQ:NVAX) shares have fallen 20% since then. J.P. Morgan analyst Eric Joseph attributes the weakness first to “pressure across the COVID-19 vaccine group in reaction to Russia's approval of a vaccine candidate,” and secondly, “that the recent OWS award to Moderna and/or the incremental phase I publication of Biontech’s BNT-162b1 have contributed to softer sentiment on the relative clinical prospects for NVX-CoV2373."

The Gaithersburg, Md.-based company reported Aug. 24 that the first volunteers had been enrolled in the phase II portion of its ongoing clinical trial to evaluate the immunogenicity and safety of NVX-CoV2373, its COVID-19 vaccine candidate. The trial expands on the age range of a phase I portion by including older adults 60-84 years of age as approximately 50% of the trial’s population. NVX‑CoV2373 is a stable, prefusion protein made using Novavax’ nanoparticle technology and includes its Matrix‑M adjuvant, which is expected to enhance immune responses by stimulating high levels of neutralizing antibodies. It will also allow Novavax to significantly increase its large-scale manufacturing capability.

Vir Biotechnology Inc. (NASDAQ:VIR) has also seen its shares take a breather falling about 9% this month after receiving a great deal of investor enthusiasm that pushed up the company’s shares over 248% year-to-date.

The company’s CEO, George Scangos painted a positive future for the company on the release of their corporate update and second quarter financial results. “Our organization is uniquely positioned and working rapidly to address the urgent need for solutions to the global COVID-19 pandemic. We plan to enter the clinic with VIR-7831 in August and have prepared for success by putting in place multiple manufacturing, development, and commercialization agreements to rapidly provide access if approved,” he explained.

Vir is planning to start a phase II/III clinical trial program for VIR-7831, a SARS-CoV-2 neutralizing monoclonal antibody with initial clinical data available before the end of the year.

Dynavax Technologies Corp., of Emeryville, Calif., also saw its share value (NASDAQ:DVAX) dip 23% this month. The company reported it received a grant from the Bill & Melinda Gates Foundation of $3.4 million to scale up production batch size to allow for increased capacity of Dynavax’s CpG 1018 advanced adjuvant to support the global COVID-19 response. Those efforts will support capacity of up to 750 million adjuvant doses annually, which can be further increased if needed.

Leading gainer

Balancing out the weakness in share values of the group has been the huge 557% hike in the shares of Seres Therapeutics Inc. (NASDAQ:MCRB) following its positive top-line results from a pivotal phase III ECOSPOR III study evaluating its investigational oral microbiome therapeutic SER-109 for recurrent C. difficile infection (CDI). The study showed that SER-109 administration resulted in a highly statistically significant absolute decrease of 30.2% in the proportion of patients who experienced a recurrence in CDI within eight weeks of administration versus placebo, the study’s primary endpoint.

The company said the study’s efficacy results exceeded the statistical threshold previously provided in consultation with the FDA that could allow this single study to fulfill efficacy requirements for a Biologics License Application. If approved, Piper Sandler analyst Edward Tenthoff conservatively anticipates “U.S. launch in 2022 with peak sales of $2.5 billion by 2028.”

The Cambridge, Mass.-based company took advantage of its elevated share value to undertake a public offering of about 12.1 million shares priced at $21.50 each, including the exercise in full of the underwriters’ option to purchase an additional 1.6 million shares. Net proceeds from the offering, together with the net proceeds from a concurrent registered direct offering of 959,002 shares of common stock to Société des Produits Nestlé SA, were expected to be about $263.7 million.

VC flows

The intense public attention on companies that are engaged in developing COVID-19 cures is also spilling over to companies researching to uncover new anti-infectives that will be needed to replace the diminishing arsenal of therapies to combat drug resistant bacteria and fungi. Already this month, F2G Ltd. closed a $60.8 million round, providing the means to complete phase III development of its lead product olorofim, a treatment for life-threatening invasive infections, and to scale up in preparation for commercialization. Olorofim is the first of a new class of drugs called orotomides, discovered and developed to phase IIb by F2G. If approved, it will be the first new antifungal based on a novel mechanism in nearly 20 years.

London-based Reviral Ltd. that is focused on developing and commercializing antiviral therapeutics that target respiratory syncytial virus, closed a $44 million series C financing. The proceeds will be used to support phase II clinical development for sisunatovir, a fusion protein inhibitor, and to progress its N-protein replication inhibitor program into phase I development.

Atriva Therapeutics GmbH, of Tübingen, Germany, closed €8.6 million (US$10.2 million) in a convertible loan to support the start of a phase II study in patients with moderate to severe COVID-19 infections and Trobix Bio Ltd., of Netanya, Israel, closed $3 million in series A funding to advance its antimicrobial resistance platform technology and continue preclinical development of its lead product, TBX-101, for treating patients with gut antimicrobial-resistant bacteria.