Merck Shares Fall Ahead of FDA Panel Hearing on Covid Pill

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Merck’s COVID-19 antiviral molnupirvir capsules.

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Courtesy Merck

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Merck

Shares fell on Monday on the eve of a Food and Drug Administration advisory committee hearing on the company’s COVID-19 antiviral pill, as investors increasingly counted on the drugmaker to the Covid-19 treatment landscape.

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The FDA is convening an advisory committee Tuesday to consider the pill. Analysts widely expect the agency to authorize mollupiravir, although that authorization is likely to be limited. What’s more, Tuesday’s discussion will highlight the drug’s limitations, including safety risks and limited efficacy, which could further cut expectations for long-term sales of the drug.

Shares of Merck (ticker: MRK) Shares of Covid-19 vaccine makers also fell, on Friday and Monday amid news of the emergence of a worrying new version of the virus that causes Covid-19.

Merck stock fell 3.8% on Friday, and was down another 5.8% on Monday, while the S&P 500 rose 1.5%. On Monday, Merck was the worst performer of the S&P 500.

The decline comes amid lackluster expectations for Merck’s COVID-19 antiviral, known as molnupiravir. Merck shares jumped 8.4% on October 1, when the company announced preliminary data showing the drug reduced the risk of hospitalization or death by nearly 50%, and Covid-19 vaccine stock. had fallen. Since then, the medicine has lost its luster.

First, Pfizer

(PFE) announced what appears to be more positive data on its COVID-19 antiviral, known as PaxLovid. Then, on Friday, Merck said the updated results of its Phase 3 study of molnupiravir are far less promising than the initial data. Merck now says studies show mollupiravir reduces the risk of hospitalization or death by 30%, Instead of an initial result of about 50%.

Earlier on Monday, Citigroup analyst Andrew Baum downgraded Merck to neutral from its previous rating, citing new risks to sales projections for molanupiravir.

“The clinical profile of Legaverio continues to deteriorate,” Baum wrote, referring to molanupiravir, which is being marketed in the UK, where it Already has regulatory approval.

A Merck spokesperson said the company does not comment on analyst reports or recommendations.

in early October, baron’s Concerns raised by some scientists reported that molanupiravir may increase the risk of cancer or birth defects. Those concerns persist, although Merck says its preclinical studies show the drug is safe.

Concerns have arisen over the way mollupiravir inhibits the replication of the virus that causes Covid-19: by first incorporating itself into the virus’s genetic code, and then causing errors as the virus replicates. The concern is that it can also cause mutations if it inserts itself into the genetic code of a person taking the pill. This mechanism of action is typical for molanupiravir; Pfizer’s COVID-19 pill works differently.

The FDA, for its part, dismissed those concerns in documents posted Friday ahead of Tuesday’s advisory committee meeting on molanupiravir, writing that the “risk of post-treatment genotoxicity” with molanupiravir is low.

Scientists who initially raised concerns are unconvinced. In public comments presented to the advisory committee, Dr. Ronald Swanstrom, a professor of biochemistry and biophysics at the University of North Carolina at Chapel Hill, whose lab published a paper last spring argued that mollupiravir Can cause mutations in mammalian cell cultures, wrote: “Molnupiravir is being shipped around the world, with a huge genotoxic question mark that most people being given the drug will not have the background to fully understand.”

Merck scientists have taken issue with the Swanstrom Lab’s study, although Swanstrom stands by his lab’s methods.

The key question for the advisory committee will be how broad the authorization should be for molanupiravir. The FDA will ask consultants to discuss whether the drug should be allowed for use during pregnancy. It will also ask consultants about the risk that the use of mollupiravir could effectively create new strains of the virus.

In its own briefing document, the agency wrote: “It is unclear whether the potential [molnupiravir]The associated changes in the SARSCoV-2 spike protein present a public health risk given the anticipated widespread use of MOVs.”

Finally, the agency will ask committee members whether mollupiravir’s benefits generally outweigh its risks for adult patients at high risk of severe COVID-19, and what risk factors should qualify a patient.

Importantly, the FDA’s briefing document was written based on early data from Merck, not the updated results announced on Friday that cut into its effectiveness. In an addendum to its briefing document taking into account the new data, the FDA noted that the benefit/risk assessments to be submitted Tuesday may differ materially from the original briefing documents.

Analysts widely expect the drug to receive emergency use authorization, though possibly for a narrower population.

“After reading the briefing documents, and considering the macro-pandemic situation, we expect mollupiravir authorization for all patients at one or more risk… and regardless of vaccination/previous infection status.” ,

However, Grebosch wrote that the discussion will shed light on the ways in which molanpuiravir appears to be inferior to Pfizer’s COVID-19 pill. “These include the risk of harm to the fetus and accelerated viral mutation rates that may drive the emergence of new SARS-CoV-2 variants in addition to relatively weak efficacy,” Grebosch wrote.

FDA advisors will meet Tuesday at 9 a.m., and are scheduled to adjourn at 5 p.m.

Write to josh [email protected]

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