Merck & Co. (MRK) - Get Merck & Co., Inc. Report shares powered higher in pre-market trading after an advisory panel to the U.S. Food & Drug Administration recommended the emergency authorization of its Covid antiviral treatment.
The stock was also given a boost by reports from Belgium indicating the government is in talks to buy 10,000 doses of the oral therapy once it's approved by European health authorities.
In a narrow 13-10 decision, the FDA's Antimicrobial Drugs Advisory Committee voted to approve Merck's oral therapy, known as 'molnupiravir', for use it at-risk patients. The FDA will evaluate the panel's recommendation and likely make its full decision on Emergency Use Authorization (EUA) later this week.
Merck said earlier this week that molnupiravir reduced the risk of hospitalization and death in high-risk patients by 30%, well shy of the 48% rate it reported from an earlier trial ending in October, although it noted the adverse event profile remained consistent. By comparison, Pfizer (PFE) - Get Pfizer Inc. Report said its antiviral treatment cuts the risk of hospitalization and death by 89%.
"We are one step closer to being able to add molnupiravir to the tools that we have – in addition to vaccines – that can be available and accessible to help fight COVID-19,' said CEO Wendy Holman of Ridgeback Biotherapeutics, who helped develop the molnupiravir treatment alongside Merck. "Importantly, our data show activity against the most prevalent variants today, and molnupiravir was studied as a monotherapy with no drug-drug interactions observed to date."
Merck shares were marked 2% higher in early Wednesday trading to $76.7 each.
"The FDA Advisory Committee said the potential benefits of molnupiravir outweigh the risks when used for the treatment of mild-moderate COVID-19," said BMO Capital Markets analyst Evan David Seigerman, who carries a market perform rating with a $91 price target on the stock.
"However, the request for an emergency use authorization for molnupiravir was not clear-cut with the committee highlighting concerns around: (1) Efficacy, (2) Embryo-fetal toxicity, and (3) Mutagenicity. On the basis, this strengthens our view Pfizer has the best antiviral (Paxlovid) in COVID-19," he noted.