Merck (MRK) Inks $1.2B COVID-19 Pill Supply Deal With Japan
Merck MRK along with partner Ridgeback Biotherapeutics has announced that Japan’s government has agreed to purchase approximately 1.6 million courses of their oral antiviral medicine for COVID-19, molnupiravir, if authorized, for approximately $1.2 billion.
Merck’s application seeking authorized use of molnupiravir is being reviewedby Japan’s Pharmaceuticals and Medical Devices Agency.
Earlier this week, Merck had stated that the U.S. government will exercise its option to purchase 1.4 million additional courses of molnupiravir for approximately $1 billion, if authorized by the FDA. Merck has already filed an application with the FDA seeking Emergency Use Authorization (“EUA”) for molnupiravir to treat mild-to-moderate COVID-19 in at-risk adults. With the latest option exercise, the U.S. government has committed to purchase a total of approximately 3.1 million courses of molnupiravir, for approximately $2.2 billion, from Merck. The government still has options remaining to purchase more than 2 million additional courses.
Meanwhile, in Europe, the European Medicines Agency has begun a rolling review of Merck/ Ridgeback Biotherapeutics’ regulatory application for molnupiravir. Molnupiravir was authorized in the United Kingdom, its first authorization in the world, earlier this month for the treatment of patients with mild-to-moderate COVID-19 patients at risk of progressing to severe illness.
The regulatory applications for molnupiravir are based on positive data from the phase III MOVe-OUT study, which showed that the candidate reduced the risk of hospitalization or death by approximately 50% in non-hospitalized adult patients with mild-to-moderate COVID-19 who were at increased risk of progressing to severe COVID-19 and/or hospitalization.
Merck expects to produce 10 million courses of molnupiravir by the end of 2021 and believes the treatment’s global opportunity to be approximately $5 billion to $7 billion through 2022, including 0.5 to $1 billion expected to be realized in 2021.
Merck’s stock has risen 2.7% this year so far compared with an increase of 15.8% for the industry.
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Another company making an oral antiviral candidate for COVID-19 is Pfizer PFE. Earlier this week, it announced that its oral antiviral candidate for COVID-19, Paxlovid reduced the risk of hospitalization or death by 89% compared to placebo in an interim analysis of a phase II/III study.
At the recommendation of an independent Data Monitoring Committee, Pfizer stopped the study early due to the high efficacy observed in the interim analysis. The company plans to soon submit this data as part of a rolling submission to the FDA for seeking EUA for the oral antiviral drug.
At present, mild-to-moderate COVID-19 patients are being treated with monoclonal antibodies from companies like Regeneron Pharmaceuticals REGN and Eli Lilly LLY but these need to be administered in a hospital by intravenous or subcutaneous infusion.
Lilly’s COVID-19 antibody cocktail, bamlanivimab plus etesevimab, was granted emergency approval by the FDA in February 2021 to treat mild-to-moderate COVID-19 in high-risk patients based on data from the BLAZE-1 study.
In September, the FDA expanded the EUA for the cocktail antibody medicine to include the post-exposure prevention (prophylaxis) for COVID-19 indication. Lilly’s cocktail medicine generated revenues of $217.1 million in the third quarter of 2021.
Regeneron’s antibody cocktail, REGEN-COV comprises two monoclonal antibodies, casirivimab and imdevimab and has become a significant contributor to its top line in the recent quarters.
If approved by the FDA, Paxlovid and molnupiravir can be the first oral antiviral medicines, which can be prescribed as at-home treatments for mild-to-moderate COVID-19 to reduce the severity of the disease. It can help prevent hospitalization in patients with a mild-to-moderate form of the disease but at high risk of severe COVID-19.
Merck currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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