Merck Reaches $350 Million COVID Therapy Deal Under Operation Warp Speed

Merck will supply up to 100,000 doses of the developing COVID treatment it acquired last month from Oncolmmune in a deal with the U.S. government's Operation Warp Speed.
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Merck & Co.  (MRK) - Get Report said Wednesday that it reached a $350 million agreement with the U.S. government to supply its developing coronavirus treatment as part of Operation Warp Speed.

Merck said the agreement would allow for the development, manufacture and distribution of the treatment, which is will named MK-7110, following its Emergency Use Authorization approval from the Food & Drug Administration. Merck acquired the treatment last month through its $425 million takeover of Rockville, Maryland-based Oncolmmune, which said its developing therapy can sharply reduce the risk of death or respiratory failure in patients suffering from severe forms of COVID-19.

The deal would pay Merck around $356 million for the manufacture and supply of between 60,000 and 100,000 doses of MK-7110 by then end of June, the company said.

“Building upon the promising clinical findings to date for MK-7110, Merck is pleased to be collaborating with the U.S. Government to advance the manufacture and distribution of this candidate for patients with serious COVID-19 disease,” said Merck Research Laboratories president Roger Perlmutter.  

Merck shares were marked 0.6% higher in early trading Wednesday to change hands at $79.90 each.

Oncolmmune published late-stage data from a phase 3 trial evaluating its lead therapeutic candidate, CD24Fc, in September that showed a 60% higher probability of improvement for patients suffering severe or critical COVID-19 when compared to placebo. 

The risk of death or respiratory failure was also reduced by more than 50%, Oncolmmune data indicated.

Oncolmmune will spin-out the rights and assets related to CD24Fc into a separate entity, the companies said, with Merck investing a further $50 million to become a minority shareholder.