After positive late-stage clinical trial results of Merck’s experimental antiviral COVID-19 pill, molnupiravair, were reported, Merck’s stocks surged.
Molnupiravir has shown to reduce the chances of hospitalization, and death by up to 50% in individuals who are at a high risk of reactions to the virus. This has been lauded as a breakthrough in COVID-19 management. The news caused Merck’s shares to rise to its highest levels since the February of last year.
Michael Yee, a Jefferies analyst stated in a client note, “We see modest perceived headwinds for vaccine stocks if the market thinks people will be less afraid of COVID-19 and less inclined to get vaccines if there is a simple pill that can treat COVID-19.”
Analysts predicted that this orally taken drug, which can be taken at home, has the ability to change the public perception regarding risks associated with COVID-19. Share prices of vaccine makers Moderna, Pfizer and its partner BionTech showed a sharp decline.
Merck’s rivals Pfizer and Roche Holding AG are conducting their own late stage trials of oral drugs for COVID-19. However, Merck is leading the race.
Pfizer is also developing a COVID-19 pill and its shares only dropped 1.3%, while Moderna, BioNTech, AstraZeneca and Novavax shares dropped 13%, 11%, 2% and 16% respectively.
Moderna’s shares were registered in the S&P 500 in the mid of July and remain with an increase of 220% in this year, even with this current drop. BioNTech shares saw a 200% increase in this year.
Bahl and Gaynor portfolio manager, Kevin Gade, commented “Merck was kind of dead in the water to investors for the past couple of quarters. This shows their R&D engine is not dead and they are first in what could be a multi-billion dollar opportunity.”
