Shares of Moderna Inc and Pfizer Inc slid on Friday after data from a late-stage study showed a COVID-19 pill from Merck & Co reduced chances of hospitalization or death among patients at risk of severe disease.
Merck leads the race in developing the first oral antiviral medication for COVID-19, while rivals such as Pfizer Inc and Swiss pharmaceutical Roche Holding AG, and partner Atea Pharmaceuticals are running late-stage trials of their own.
Some Wall Street analysts said Merck’s positive data and the promise of an oral drug that can be taken at home could change the public perception of risks associated with COVID-19.
“We see modest perceived headwind to vaccine stocks such as MRNA 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,” Jefferies analyst Michael Yee said in a client note.
Merck and partner Ridgeback Biotherapeutics plan to seek US emergency use authorization for the pill, molnupiravir, as soon as possible.
Shares of Merck surged 9.76% following the development, while Moderna dropped about 11% and Pfizer fell 2%. Novavax, Inovio Pharmaceuticals and Vaxart Inc, which are also developing vaccines for COVID-19, slid 6%-15%.
Analysts also said such oral treatment options can tap a multi-billion dollar opportunity, as the existing monoclonal antibody therapies from companies like Eli Lilly and Regeneron Pharmaceuticals Inc require inconvenient intravenous infusions.
“Preliminary modeling we have conducted shows molnupiravir could generate at least $10 billion in order flow by 2025,” SVB Leerink analyst Daina Graybosch said, adding that a preference for a pill and molnupiravir’s potential for stockpiling could also work in its favor. (Reporting by Manojna Maddipatla in Bengaluru; editing by Uttaresh.V)