Monday brought a spot of good news in a bleak summer: Scientists testing Ebola drugs in the Democratic Republic of Congo found some that seemed to work.
Wall Street shrugged.
Scientists cut short a trial of four experimental Ebola drugs after two of them, including one developed by Regeneron Pharmaceuticals (ticker: REGN), showed extremely promising results. Ninety percent of patients who took the drugs soon after infection survived. Overall, 29% of Ebola patients dosed with Regeneron’s drug died, compared with 49% of people dosed with the drug ZMapp, previously thought to be the best hope at combating the disease.
In other words, Regeneron may have found an effective treatment for one of the most frightening diseases on the planet.
Yet Regeneron’s stock was down 3% on Monday. It recovered on Tuesday, rising 3.4% in early trading after the U.S. Food and Drug Administration approved a new means of administering a key Regeneron eye drug. No Wall Street analysts, however, changed their rating of the stock based on the Ebola news.
So why don’t investors seem to care that a biotech company may have cracked a nightmare disease that has killed upward of 1,800 people in the latest outbreak alone?
“It’s a great scientific validation” of Regeneron’s technology, said Hartaj Singh, who covers the company for Oppenheimer. But it’s hard for analysts, and by extension investors, to game out how a successful trial of an Ebola drug could affect the company’s bottom line. [Continue reading…]