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Merck Stock Up On Molnupiravir, But Don't Get Too Excited

Oct. 06, 2021 6:51 AM ETMerck & Co., Inc. (MRK)BNTX, GILD, MRNA, PFE, SPHRF, SPHRY95 Comments
Keith Williams profile picture
Keith Williams


  • Molnupiravir results are striking for very early treatment, but this doesn't compare with vaccination; the time window for effect is short and the trial was mostly with unvaccinated people.
  • Merck has a Phase 3 trial testing if molnupiravir can prevent infection of a person exposed to someone infected with COVID-19.
  • The commercial opportunities for COVID-19 remain primarily in the vaccine area; molnupiravir will have a role, but will it move the needle for Merck in the longer term?

Merck manufacturing plant factory producing pharmaceutical medicine drugs in rural Virginia countryside city of Rockingham county

krblokhin/iStock Editorial via Getty Images

There is a lot of excitement about Merck (NYSE:MRK)/Ridgeback Biotherapeutics success with molnupiravir pills as an early stage COVID-19 treatment. Here I review where molnupiravir fits in the COVID scene. The results are exciting and Merck’s share price is up

This article was written by

Keith Williams profile picture
Keith began his career as a research scientist (developmental biology, biochemistry, molecular biology) at the Australian National University, University of Oxford (UK), the Max Planck Institute for Biochemistry (Munich, Germany) and finally Macquarie University (Sydney) where he held a Chair in Biology and established the Centre for Analytical Biotechnology. Pioneering the area of proteomics (with Marc Wilkins in his group coining the term), Keith established the world’s first government-funded Major National Proteomics Facility (Australian Proteome Analysis Facility) which was involved with industrialising protein science. Keith left academe with his team to found Proteome Systems Ltd in 1999 to commercialise proteomics. The company had a strong focus on intellectual property, engineering/technology and bioinformatics. As CEO he led the company to ASX listing in 2004. Since 2005 Keith has been involved in new business development in biotech, e-health and other emerging technologies. Keith sees climate change and sustainable development as a major issue for humankind and also a major business disruptor/risk and opportunity. Keith holds a Bachelor Agr Science from the University of Melbourne and a PhD from the Australian National University. He is a Fellow of the Australian Academy of Technological Sciences & Engineering and received an AM (Member of the Order of Australia) for services to the Biotechnology Industry. He has received various industry awards including an Innovation Hero Medal from the Warren Centre for Advanced Engineering. With 300 scientific papers and many patents written, Keith has a clear view of innovation in the Biotechnology and Climate/Renewable Energy space. He is not a financial advisor but his perspective adds relevance to decision-making concerning feasibility and investment in technology innovation.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPHRY, PFE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (95)

Bossco profile picture
Apparently a good call by the author.
Kenmare profile picture
@Bossco Yeah, couple that with the call to buy Pfizer a few weeks ago and you have a real one-two punch. Even in those rare instances when I disagree with Keith he always provides a thought-provoking read.
A word on competition….anti cholesterol drugs ( taken by a fraction of worlds population ( Lipitor,Crestor,zocor etc ) have make 100 s of billions for many pharmas in last 10 years. Imagine anti- covid drugs which everyone will take whether vaccine or not …. Whether have covid or not ,year after year. This is big ……
Merck is estimating 6 billion in sales of molnupiravir……that’s based on the FDAs narrow indication……once it hits the market that goes out the window it’s called off - label use…..that’s where the money is at minimum another 6 to 10 billion. ( note : in all countries around the world antibiotics (anti bacterials) are routinely given for the flue ( even though it’s well know and proven that anti bacterials have no effect on flue). That the nature of medicine called hope.
Merck’s is unaware of the mother lode it uncovered.
This is the game changer, this will end the pandemic. The vaccines will not sell sales will plummet to zero. Once approved ,will be prescribed like all antibiotics at a hint of flue like symptoms, to all contacts as prevention ( as is done with antibiotics for almost a century ( in the absence of any evidence). To be honest once someone does not feel good ( may be wife miserable) and sees an MD molnupirvir will the prescribed. This will be the top selling drug on the planet . Merck’s share price will double. I am a practicing physician.
Keith Williams profile picture
@glmd .... only in pill popping USA?
@Keith Williams yes ,but that will generate 6 to 10 billion in sales!
Well, it looks like we should have gotten excited . . .
I just read that a professor said things look hopeful and probably would be a treatment option for people with Covid-19. Molnupiravir prevent the virus to split and multiply instead of utilize the immune system. A cure consists of 40 tablets within 5 days.

40 tablets a cure = 2800$

// Robert 🇸🇪
Keith Williams profile picture
@null Timing is everything with antivirals as once SARS-CoV-2 gets going there are other problems that mean the virus is no longer the main problem.

I maintain that the window for treatment is pretty narrow, but that probably won't stop molnupiravir being successful. Remdesivir basically doesn't work but GILD did well for a while.
Would you get on an airplane for a not-necessary trip—without an anti-viral pill in your travel kit?

That said, MRK is not going to end up being the only available anti-viral pill; PFE has one coming close behind, and others are in intensive development.
Keith Williams profile picture
@WndlB I'd get on an airplane with Viraleze in my pocket, taking a couple of sniffs prior to entering the plane.
BY far most quialified author on SA. excellent article, just the facts.
Montana13 profile picture
@iamback Especially the trends on Exxon!
Aussie Machead profile picture
At $700 for a 10 days course of pills I don't think this will be much competition for the general populace getting vaccinated with Astrozenica about $4, Pfizer about $25 and Moderna about $30 even 2 doses plus booster is way less than a course of Molnupiravir by Merck. I can't see the Australian PBS approving for anything more than immunocompromised in the early days. Think there are likely to be more cheaper prophylactics to come - just need some big pharma to do the trials and efficacy tests.


Pomegranate Peel Extract as an Inhibitor of SARS-CoV-2 Spike Binding to Human ACE2 Receptor (in vitro): A Promising Source of Novel Antiviral Drugs
Annalisa Tito, Antonio Colantuono

and as tested with Lozenges by University of Milan June 2020 medclinres.org/...
CPA Bob profile picture
@Aussie Machead I don't think you understand the situation and how Merck's molnupiravir is intended to be used. By the way, it is a 5-day course, not 10 day. You should read up.
Aussie Machead profile picture
@CPA Bob yes 5 day course 2 tablets each day i.e. 10 tablets cost $700 means $70 per pill
CPA Bob profile picture
@Aussie Machead - I believe that it is 4 pills taken twice day over 5 days. So 20 pills.
There is a fierce competition from JP:4507. Likely, COVID-19 drug from JP:4507.

So far, effectiveness wise, so far reported, REGN's monoclonal antibody is best. Actually, only its product has EUA from FDA for COVID-19 treatment.

Yes, MRK's is cheaper thus I mention JP:4507 which is pointed as even cheaper.

Meanwhile, there are other drugs under test. For instance, HK:1099 has products show promising. It could be another price spoiler in overseas markets.
So as your Profile says, He is not a financial advisor but his perspective adds relevance to decision-making concerning feasibility and investment in technology innovation.
But, since you are on a finance site can you list your holdings in your Portfolio if you have one? Performance results, etc. Thanks Keith.
Keith Williams profile picture
@Aristocrat & Dividend King Investor You reminded me that I have a small stake in PFE. I've written several articles about Pfizer and mRNA vaccines eg seekingalpha.com/...

My portfolio is a mix of biotech (many early stage companies eg SPHRY, BNOEF)... I've written about both of these companies.... and a group of renewable energy companies, with ENPH (entry price $3.99) my best investment. seekingalpha.com/...

I also have done very well with BYDDF (entry price $4.69) and VWDRY (entry price $4.58 taking account of split). If you dig through my articles you'll see why.

I also have stakes in a number of other solar (eg SPWR entry price $10.43) and wind companies.

I write for Seeking Alpha to provide a perspective on companies and technology areas (on the negative side coal, oil and gas). I'm not into providing my full portfolio because I'm not a financial advisor.
@Keith Williams Thank you for responding. If you want to keep your portfolio private for whatever reason that is your choice. However, what one has in their portfolio does not translate to being a financial advisor. Is that not so? Still curious on Performance, but that also is your choice not to mention. All the best. ADKI.
Keith Williams profile picture
@Aristocrat & Dividend King Investor It has taken me a long time to get the hang of investing in emerging opportunities and to get the timing right as some of my early investments took forever to come good.

I'm a little behind on recent investments in DNNGY, CSIQ, JKS, RWEOY, MCRB, but not worried as timing can be tricky.

Performance is completely out of whack with ENPH up almost 40 fold, BYDDF up almost 7 fold and VWDRY up 2.5 fold.

Investors might pay attention to how the companies I write about perform.
Yes, the drug might not work out in the long run. But the results are promising and the drug is deep into the development process, so the risks of failure are shrinking. We have vaccines. What we have lacked is a really effective treatment for serious cases. Prevention is only one side of the coin; treatment is the other side and is just as important. So I do find the Merck development exciting.
Long Time Running profile picture
@Doggywag , if you are unvaccinated you have a decision to make, are you fit enough to survive the disease or should you pop the pill.

As more than half the US population is obese especially in lower class demographics, there could be a lot of pill popping going on.

And if you can't afford it, go visit the horse doctor.

Why not just get the vaccine instead, it's free and proven.
Keith Williams profile picture
@Doggywag It is important that Merck abandoned development of molnupiravir for treating established (hospitalisation) COVID-19. There may never be effective treatments for established disease (other than treating the consequences eg dexamethasone) because SARS-CoV-2 is an explosive virus.... which is why I think prevention (nasal sprays) is crucial.

The window for molnupiravir treatment is very small and it may be that in vaccinated people, (who generally don't get very sick, are rarely hospitalised and mostly don't die), the improvement will be very marginal.

This brings us back to small improvement in symptoms, like tamiflu for flu. The point is that in the US Tamiflu costs $95.16 and a generic is available as low as $21.70.

If I'm correct about the above I suspect many COVID-19 patients may blink at a $700 treatment cost.
Aussie Machead profile picture
@Keith Williams yes that is what I heard the cost is. I reckon with the waste of pomegranate skins when producing juice there is potential for a much cheaper prophylactic as discussed by scientists from Univ of Milan June 2020 and NIH US paper in 2021


and www.ncbi.nlm.nih.gov/...

Pomegranate Peel Extract as an Inhibitor of SARS-CoV-2 Spike Binding to Human ACE2 Receptor (in vitro): A Promising Source of Novel Antiviral Drugs
Annalisa Tito, Antonio Colantuono
bengalesq profile picture
It is always interesting for investors to digest what it is that triggers share price shifts.
07 Oct. 2021
The other considerations are
1. Is this drug teratogenic or potentially oncogenic? Needless to say 30 days follow-up doesn’t cut it in this regard
2.will the FDA have concerns about global use of a drug that increases genetic mistakes, and hence genetic variability in Covid-19. This is the type of agent we use in microbiology labs to induce variants and drug resistance. This could even lead to gain of function mutations. Especially likely in real world use, where dosage compliance is always imperfect

Keith Williams profile picture
@MTTCnd You make a good point about teratogenicity. I haven't looked at the data. As you indicate it may be that absence of worrying signs from initial studies and the COVID emergency no doubt get weighed up in this consideration.

On the obvious mutagenicity. Molnupiravir is a RNR-dependent RNA polymerase inhibitor (SARS-CoV-2 is an RNA virus ... its genetic material is RNA not DNA) and this is why it messes up the virus. Humans use DNA as their genetic material. This might be material.
08 Oct. 2021
@Keith Williams sorry, I guess I wasn’t clear. Yes, DNA polymerase seems much less likely to be affected by this nucleotide analogue, although there have been animal tests suggesting this is not 100% selective. My concern was in the acceleration of viral variation when given in a population, at scale. Erratic RNA copying may be lethal to nearly all replicating units, but by shear statistics and numbers ( we are talking about a mind boggling n), gain of function mutation will undoubtedly occur at a higher rate.

Compare this to an antibody which may select for virus that is not expressing the antibodies epitope, but doesn’t accentuate viral genetic change.

From an epidemiological perspective, this is concerning
@Keith Williams
Most people will choose teratogenicity, to permanent mask wearing and permanent social distancing. The most vaccinated countries have rising cases and deaths…go figure.
crrj profile picture

What makes this drug better than Merk's Ivermectin?

40x their cost?
Apple Dan profile picture
Uh, it was made for humans instead of livestock and for rona instead of worms?
07 Oct. 2021
@Apple Dan we use ivermectin in Covid setting, but only to provide prophylaxis against strongyloided in patients from endemic areas on steroids. ie, not for Covid
crrj profile picture
@Apple Dan

Ivermectin was made almost 50 years ago (Nobel prize-winning) for humans, buttercup lefty, to cure river blindness from parasites in Africa---safe--proven

Worked great in India on 200 million of their people------

Purely evil the DEMS and leftists withhold proven effective therapies---Dems will lie and do anything to further their cause of the manufactured crisis.

99.95% survival without vax
This is funny. If the article had mentioned the I’ll effects of PFE, MRNA, JNJ or AZN the story would have been Blacked Out by FB or GOOG as being from a conspiracy theorist. Since MRK is not yet under that umbrella of protection, you get to see discussion about the potential damage the drug could cause. MRK better pony up Biden & his son with some political campaign contributions quickly! LOL
SA-NJ52 profile picture

My book on MRNA is 144. I bought based on Steve Weiss' recommendation.

I sold half at 480.

I have a limit order in to buy back the stock I sold, at 275.

MRNA is a solid hold and I want to buy it back for the long term.

Keith Williams profile picture
@gandc Good strategy.
Winnertakesall profile picture
Stock should be trading north of $110.
22thoroughbred profile picture

That number represents the price Merck will drop back to before beginning the next leg up. It’s not some random but the price I get using charts (ok 1 chart), something I’ve done pretty successfully for many many years (ok, 3 years) Lol, just kidding, over 20 years
Manzil profile picture
At $700 per treatment with a short duration of effect, I don't see insurers covering this as a prophylactic. I would see it more as an early intervention therapy for people who test positive for Covid-19 but have moderate to no symptoms.
07 Oct. 2021
@Manzil that’s an interesting point. MAb’s are only a little more expensive, twice as effective and last 3 months
@MTTCnd hospitalization effectively reduced with vaccination and controlled with boosters....don't see the real need with complex indication
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