Merck & Co. (MRK) - Get Merck & Co., Inc. (MRK) Report shares surged the most in more than two years Friday after the pharma group said its developing coronavirus antiviral drug cut the risk of hospitalization and death in high-risk patients by as much as 50% and plans to seek emergency use approval from the Food & Drug Administration 'as soon as possible'.
Merck said the 'molnupiravir' oral treatment, developed with Ridgeback Biotherapeutics, "significantly reduced the risk of hospitalization or death" in patients participating in a late-stage trial. Molnupiravir, or MK-4482, is designed to induce so-called "copying errors" within a harmful virus that prevent it from replicating in the human body.
The data was compelling enough, the companies said, that they would cease the current trial and seek Emergency Use Authorization from the FDA based on its findings "as soon as possible." The Biden Adminisration, in fact, has already committed in June to buying 1.7 million doses -- worth around $1.2 billion -- if the drug is ultimately authorized.
“More tools and treatments are urgently needed to fight the COVID-19 pandemic, which has become a leading cause of death and continues to profoundly affect patients, families, and societies and strain health care systems all around the world," said CEO Robert Davis. "With these compelling results, we are optimistic that molnupiravir can become an important medicine as part of the global effort to fight the pandemic and will add to Merck’s unique legacy of bringing forward breakthroughs in infectious diseases when they are needed most."
"Consistent with Merck’s unwavering commitment to save and improve lives, we will continue to work with regulatory agencies on our applications and do everything we can to bring molnupiravir to patients as quickly as possible,” he added. “On behalf of all of us at Merck, I thank our network of clinical investigators and patients for their essential contributions to the development of molnupiravir.”
Merck shares were marked 11.2% higher in early trading immediately following release of the antiviral data to change at $83.50 each. Rival drugmakers Moderna (MRNA) - Get Moderna, Inc. Report and Novavax (NVAX) - Get Novavax, Inc. Report, meanwhile, fell 8.7% and 13.9% respectively.
"After swinging and missing on the vaccine front, MRK’s success with molnupiravir could not only unlock over $10 billion in near-term orders, the pill could also represent the best option for bringing the pandemic under control worldwide," said SVB Leerink analyst Daina Graybosch.
"We expect approval in US before year-end is likely, and for additional supply contracts to be announced in coming weeks," he added. "We expect approval in US before year-end is likely, and for additional supply contracts to be announced in coming weeks."