It’s likely that Merck’s COVID-19 pill will be authorized in the U.S. this month even though Wall Street’s interest has cooled and physicians have raised questions about the drug’s efficacy and safety profile, particularly among people who are pregnant.
Shares of Merck & Co. Inc. MRK, -0.74% rose 1.6% in trading on Wednesday, the day after an advisory panel recommended that the Food and Drug Administration authorize molnupiravir in a narrow 13-10 vote.
“The near split vote reflects concerns over molnupiravir’s modest clinical efficacy, with results in the post-interim period contrasting with the more positive interim results that led to early study stoppage,” SVB Leerink analysts told investors on Wednesday. “We expect these concerns to follow the therapy and limit uptake particularly when alternative therapies become available.”
The company, which is developing molnupiravir with the privately held Ridgeback Biotherapeutics, is seeking authorization in adults who have tested positive for the virus and are at high risk of hospitalization and death. Treatment is expected to begin within five days of symptoms.
If authorized, it will be the first oral pill that can treat COVID-19.
Analysts now expect the FDA to restrict who can take the drug for safety reasons, potentially limiting molnupiravir to people older than 60 years old or excluding pregnant women, women of childbearing age, and male partners. Some FDA panelists suggested that women have to have a negative pregnancy test to get the pill.
Mizuho Securities analysts expect the FDA “will likely limit authorization to nonpregnant adult population.”
Wall Street had a muted response to the panel vote—and now to the drug, in general.
Raymond James’ Steven Seedhouse described the likely authorization as “tepid” and said “it will likely be an uphill battle for full approval particularly given the availability of myriad neutralizing antibodies and likely Paxlovid (another oral medication with seemingly lesser tox concerns) soon.”
(Pfizer Inc. PFE, +2.32% is developing Paxlovid, an oral COVID-19 pill that is also expected to be authorized this year. The same FDA panel has not yet scheduled the advisory committee meeting for this drug but is expected to do so this month.)
Merck first shared interim data back in October showing molnupiravir can reduce the risk of hospitalization and death by 50%. The news exhilarated just about everyone. Markets soared, and physicians applauded the arrival of a promising new tool in the pandemic.
But then two things happened: Pfizer shared interim data in November for its own COVID-19 pill that showed Paxlovid reduced the risk of hospitalization and death by a remarkable 89%, and then Merck released full data the day after Thanksgiving that demonstrated the drug doesn’t work as well as we thought—it can reduce hospitalization and death by 30%, not 50%.
Merck’s stock performance over the last two months reflects much of these ups and downs. The company’s stock closed at $81.40 on Oct. 1, the day it announced the interim data, and marking the first time the stock closed higher than $81.00 since mid-January. But then shares tumbled 14.9% in November, the biggest monthly decline since dropping 15.2% in February 2009.
Merck’s stock is down 3.9% so far this year, while the broader S&P 500 SPX, -0.84% is up 21.6%.
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