The success of Merck’s COVID-19 pill has slashed Moderna’s stock and reshaped the health care industry. Merck announced that its clinical trials revealed that its pill for COVID-19 significantly reduced the risk of death when taken early.
Positive clinical trial results for Merck & Co.‘s experimental antiviral COVID-19 pill rippled throughout the health care sector on Friday, sending the drugmaker’s stock jumping while denting the stock prices of vaccine makers and makers of other coronavirus medicines.
This undated handout photo acquired by Reuters on May 17, 2021 shows an experimental COVID-19 therapy pill called molnupiravir being developed by Merck & Co Inc and Ridgeback Biotherapeutics LP. (Photo: Merck & Co Inc/Reuters)
Merck Shares
Merck shares soared as much as 12.3 percent. They reached their highest level since February 2020 after data revealed that the company’s pill molnupiravir could reduce the likelihood of dying or being hospitalized in those most at risk of contracting severe COVID-19 by half in those who take the medication. A number of experts hailed the revelation as a potentially significant step forward in the fight against COVID-19.
Meanwhile, shares of vaccine manufacturers such as Moderna Inc., Pfizer Inc., and partner BioNTech SE have been hit. Some analysts predict that the promise of an oral drug that can be taken at home will alter the public’s perception of the risks associated with COVID-19.
During midday trading, Moderna’s stock fell 13 percent, while Pfizer, which is also developing a COVID-19 pill, saw its stock fall 1.3 percent. BioNTech’s stock price in the United States fell by 11 percent.
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Vials of coronavirus disease (COVID-19) vaccines of Pfizer-BioNTech and Moderna are seen in the town of Ricany near Prague, Czech Republic, February 25, 2021. (Photo: REUTERS/David W Cerny)
Moderna investors saw the Merck announcement as an opportunity to lock in gains after a spectacular run in the company’s stock. In spite of Friday’s declines, Moderna’s shares, which were added to the S&P 500 in mid-July, are still up approximately 220 percent in 2021. Despite Friday’s drop, BioNTech’s stock was still up approximately 200 percent for the year.
The Merck news is a “great reason for folks to be taking profits off the table” in Moderna and BioNTech shares, said Sahak Manuelian, head of equity trading at Wedbush Securities. “These moves can get exacerbated to the downside given the momentum they have had to the upside.”
Late-Stage Trial
An ongoing late-stage trial to determine whether Merck’s antiviral pill can prevent COVID-19 infection, in addition to the study that found it can significantly reduce hospitalization and death in those who have already been exposed to the virus, is underway.
Merck, whose stock is currently up about 9%, is leading the race to develop the first oral antiviral medication for COVID-19. Pfizer and Swiss drugmaker Roche Holding AG (ROG.S) with partner Atea Pharmaceuticals Inc are conducting late-stage trials for their pills. Shares of Atea were up 19%.
Merck, which had discontinued its COVID-19 vaccine program, had seen its shares fall about 4 percent for the year up until Thursday before moving into positive territory for the year 2021 on Friday, according to the company’s earnings release.
“Merck has kind of been dead in the water to investors for the past couple of quarters,” said Kevin Gade, portfolio manager with Bahl & Gaynor, which owns Merck shares. “This shows their R&D engine is not dead and they were first … in what could be a multi-billion dollar opportunity.”
