Merck draws mixed views on Street despite backing from FDA panel for COVID-19 pill

Merck (NYSE:MRK) is trading flat in the pre-market after narrowly winning the support of an FDA advisory panel on Tuesday for the company’s oral COVID-19 therapy molnupiravir for use in high-risk adults.
Commenting on the outcome where experts voted 13-10 to support the Emergency Use Authorization of the pill, Bank of America maintains the Neutral rating and $86 per share target on the stock to imply a premium of ~14.8% to the last close.
Merck (MRK) could still win the EUA for the drug by the end of the year, the analysts led by Geoff Meacham note, adding that the rival therapy from Pfizer (NYSE:PFE) could still dominate the oral options for COVID-19 as both drugs are set to enter the market in late 2021/ early 2022.
Meanwhile, BMO Capital Markets, with a Market Perform rating on Merck (MRK), argues that the positive vote was within its expectations despite the likely challenges. The analyst Evan Seigerman also notes that the recommendation has reinforced the view Pfizer (PFE) has the best antiviral for COVID-19. The price target of $91 per share implies a premium of ~21.5% to the last close.
Read more on updated late-stage data for molnupiravir, developed by Merck (MRK) in partnership with Ridgeback Biotherapeutics.