Synairgen (LSE: SNG) shares came onto my radar in December and since then I’ve been watching the stock very closely. 2020 was a stellar year for the AIM-listed company but do I reckon the same will happen this year?
Last month I wrote that Synairgen shares could double in 2021. I still think this is the case. The company recently provided investors with an encouraging update, which I’ll provide further details on below.
What does Synairgen do?
I think it serves as a useful reminder to reconfirm what Synairgen does. The company develops drug for respiratory diseases including asthma and more recently, Covid-19.
Synairgen is a university spin-off firm, founded in 2003 by three University of Southampton professors. Although the company is very small, I think what it’s developing is truly game-changing.
What makes Synairgen shares different?
While companies like Pfizer and AstraZeneca have created vaccines, Synairgen is creating a treatment for Covid-19.
Its SNG001 drug has been demonstrated effective in treating Covid-19 in early trials. Vaccines prevent humans contracting the coronavirus but there is also a need for Synairgen’s treatment. SNG001 will be effective where vaccines are not. I think it could also prove useful for those who don’t get vaccinated. Or if the virus mutates to the point where vaccines become less effective.
I believe that SNG001 could be revolutionary for Synairgen shares as the drug could rapidly assist with the global crisis.
The story so far for Synairgen shares
It’s still early days for SNG001 to be rolled out to the masses yet. But I think the results look promising. The drug has successfully completed Phases I and II trials, which involves using the drug on a sample of patients and assessing the results.
In December, Synairgen announced that it could conduct further trials in the US. The company highlighted that its application to the US regulator, FDA to evaluate SNG001 has been approved. But for me, this wasn’t the breaking news.
Synairgen also announced in December that the FDA had awarded SNG001 with a fast track status. This meant that the US regulator’s timelines to review SNG001 would be shortened.
I think the fast track status indicates that the FDA is taking Covid-19 treatments seriously and levelling-up the playing field. In a pre-coronavirus world, a small company like Synairgen would’ve had to face long-winded hurdles, but the fast-track status has eliminated that. If SNG001 proves to be successful, I reckon Synairgen shares could soar from current levels.
The latest developments
Synairgen reported on 13 January 2021 that the first UK patient has been given the SNG001 treatment as part of its global Phase III trial. This news is positive for Synairgen shares as it indicates that the company has swiftly moved onto the next phase of testing for the treatment of hospitalised Covid-19 patients.
There is no guarantee that SNG001 will be successful in Phase III trials. But I’m optimistic, based on the results generated so far.
Would I buy now?
Without a shadow of a doubt, yes. The vaccines give me a glimmer of hope. But a treatment for hospitalised Covid-19 patients means that if the virus is contracted, there are specific drugs that can help. I believe in the SNG001 treatment and reckon Synairgen shares could rally on the back of its success.
