© Reuters. FILE PHOTO: An experimental COVID-19 treatment pill called molnupiravir, which is being developed by Merck & Co Inc and Ridgeback Biotherapeutics LP, can be seen in this undated handout photo, published by Merck & Co Inc and published by Reuters on May 17, 2021 was obtained. Merck & Co I.
By Lewis Krauskopf and Manojna Maddipatla
(Reuters) – Positive clinical trial results for Merck & Co.'s experimental COVID-19 antiviral pill reverberated through the healthcare sector on Friday, sending the drugmaker's share price skyrocketing as soaring stocks of vaccine companies and other coronavirus therapy manufacturers depressed became.
Merck stock rose as much as 12.3%, hitting its highest level since February 2020 after data showed the company's pill molnupiravir https://www.reuters.com/business/healthcare-pharmaceuticals/mercks-covid-19 -pill-cuts-risk -tod-hospitalization-by-50-study-2021-10-01 could increase the likelihood of dying or being hospitalized for those most at risk from severe COVID-19 get sick, cut in half. Experts hailed the news as a potentially big step forward in the fight against COVID-19.
At the same time, stocks of vaccine manufacturers such as Moderna (NASDAQ 🙂 Inc, Pfizer Inc (NYSE 🙂 and partner BioNTech SE (NASDAQ 🙂 were hit, with some analysts saying the promise of an oral drug that can be taken at home could change public perceptions of the risks associated with COVID-19.
“We see a modest perceived headwind for vaccine stocks like MRNA (Moderna) when the market believes people are less afraid of COVID-19 and less inclined to get vaccines when there is a simple pill called COVID-19 can handle, “Jefferies (NYSE 🙂 said analyst Michael Yee in a customer note.
Moderna stock plunged 13% in midday trading, while Pfizer, which is developing its own COVID-19 pill, fell 1.3%. BioNTech's US stocks fell 11%.
For Moderna investors, the Merck-Nachrichten offered the opportunity to make profits after an already impressive run. Moderna shares, which entered the stock in mid-July, remain up around 220% in 2021 despite the declines on Friday. BioNTech's share also rose by around 200% over the course of the year, despite the decline on Friday. The Merck News is a "great reason for people to take profits off the table" in Moderna and BioNTech stocks, said Sahak Manuelian, head of stocks at Wedbush Securities. "Given the momentum that they have, these movements can intensify upwards."
Shares of other companies with COVID-19 vaccines also fell, with AstraZeneca (NASDAQ 🙂 up 2% and Novavax (NASDAQ 🙂 down 16%.
Companies with other COVID-19 therapies given intravenously or by injection also traded lower, with Regeneron (NASDAQ 🙂 Pharmaceuticals down nearly 5% and Gilead Sciences Inc (NASDAQ 🙂 by about 2%.
Healthcare was the only one of the 11 S&P 500 sectors in negative territory in midday trading, down 0.5%. "We see molnupiravir with its oral format as a clear game changer that is likely not only to significantly influence the treatment paradigm for COVID-19, but also has a potential benefit in prevention," said Piper Sandler analyst Christopher Raymond in a research note.
Merck is conducting a late-stage study to see if its antiviral pill can prevent COVID-19 infection, in addition to the study that has shown it can significantly reduce hospital stays and deaths in those already infected.
Merck, whose shares recently rose about 9%, leads the race in developing the first oral antiviral drug for COVID-19. Rivals like Pfizer and Swiss drug maker Roche Holding AG (OTC 🙂 with partner Atea Pharmaceuticals Inc are conducting late-stage studies on their pills. The Atea share rose by 19%.
Merck, which is discontinuing its own COVID-19 vaccine https://www.reuters.com/article/us-health-coronavirus-merck/merck-ends-covid-vaccine-program-cites-inferior-immune-responses-idUSKBN29U187program had lost about 4% of its shares over the year through Thursday before sliding into positive territory for 2021 on Friday.
"Merck has been dead in the water for investors for the past few quarters," said Kevin Gade, portfolio manager at Bahl & Gaynor, who owns Merck shares. "This shows that your R&D engine is not dead, and you were the first … in a potentially billion-dollar opportunity."