(New throughout, adds analyst, investor comment)
By Lewis Krauskopf and Manojna Maddipatla
Oct 1 (Reuters) – Positive clinical trial results for Merck & Co's experimental antiviral COVID-19 pill reverberated through the healthcare sector on Friday, sending the drugmaker's stock price soaring while denting high-flying shares of vaccine companies and makers of other coronavirus therapies.
Merck shares jumped as much as 12.3% and hit their 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-death-hospitalization-by-50-study-2021-10-01 could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19. Experts hailed the news as potentially a huge advance in the fight against COVID-19.
At the same time, shares of vaccine makers such as Moderna Inc, Pfizer Inc and partner BioNTech SE were hit, with some analysts saying 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 (Moderna) 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.
Moderna shares tumbled 13% in midday trading, while Pfizer, which is developing a COVID-19 pill of its own, fell 1.3%. U.S. shares of BioNTech dropped 11%.
For Moderna investors, the Merck news presented an opportunity to lock in gains after an already stunning run. Shares of Moderna, which were added to the S&P 500 in mid July, remain up some 220% in 2021 despite Friday's declines. BioNTech's shares were also still up about 200% for the year, even with Friday's fall.
The Merck news is a "great reason for folks to be taking profits off the table” in Moderna and BioNTech shares, said Sahak Manuelian, head of equity trading at Wedbush Securities. "These moves can get exacerbated to the downside given the momentum they have had to the upside."
Shares of other companies with COVID-19 vaccines also fell, with AstraZeneca down 2% and Novavax falling 16%.
Companies with other COVID-19 therapies that are administered intravenously or through injection also traded lower, with Regeneron Pharmaceuticals In down nearly 5% and Gilead Sciences Inc off about 2%.
Healthcare was the only one of the 11 S&P 500 sectors in negative territory in mid-day trading, falling 0.5%.
"We see molnupiravir, with its oral format as a clear game changer that is likely to meaningfully impact not just the treatment paradigm for COVID-19 but also has potential utility in the prevention setting," Piper Sandler analyst Christopher Raymond said in a research note.
Merck is conducting a late-stage trial to see if its antiviral pill can prevent COVID-19 infection, in addition to the study that showed it can significantly cut hospitalization and death in those already infected.
Merck, whose shares were last up about 9%, leads the race in developing the first oral antiviral medication for COVID-19. Rivals such as Pfizer and Swiss drugmaker Roche Holding AG with partner Atea Pharmaceuticals Inc are running late-stage trials of their pills. Atea shares were up 19%.
Merck, which discontinued 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 seen its shares fall about 4% for the year through Thursday, before they moved into positive territory for 2021 on Friday.
"Merck has kind of been dead in the water to investors for the past couple of quarters," said Kevin Gade, portfolio manager with Bahl & Gaynor, which owns Merck shares. "This shows their R&D engine is not dead and they were first … in what could be a multi-billion dollar opportunity."
(Reporting by Lewis Krauskopf in New York and Manojna Maddipatla in Bengaluru; Editing by Ira Iosebashvili and Bill Berkrot)
(Reuters) -An experimental antiviral pill developed by Merck & Co could halve the chances of dying or being hospitalized for those most at risk of contracting severe COVID-19, according to data that experts hailed as a potential breakthrough in how the virus is treated. If it gets authorization, molnupiravir, which is designed to introduce errors into the genetic code of the virus, would be the first oral antiviral medication for COVID-19. Merck and partner Ridgeback Biotherapeutics said they plan to seek U.S. emergency use authorization for the pill as soon as possible and to make regulatory applications worldwide.
Investors are focusing on Treasury yields as a key factor in determining how stocks will fare the rest of the year, after a month in which equities notched their steepest losses since the coronavirus pandemic began. The S&P 500 index posted its biggest monthly drop since March 2020 in September, while pulling back as much as 5% below its all-time high for the first time this year. Stocks wobbled as yields on U.S. Treasuries shot to a three-month high, exacerbating worries in a market already unsettled by a nasty fight over the U.S. debt ceiling, the fate of a massive infrastructure spending bill and the meltdown of heavily indebted Chinese property developer China Evergrande Group.
The cost of goods and services rose sharply again in August and left the rate of U.S. inflation at a 30-year high, with all signs pointing to price pressures snaking into next year.
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(Bloomberg) — For the world’s leading Covid-19 vaccine makers, news that Merck & Co.’s experimental pill cuts the risk of hospitalization and death in half was the latest blow in a very bad week.Most Read from BloombergWall Street Titans Warn of the Next Big Risks for InvestorsAn Unapologetic Old Boys’ Network Is Costing Australia BillionsThe Unstoppable Appeal of Highway ExpansionThe Country That Makes Breakfast for the World Is Plagued by Fire, Frost and DroughtHSBC Bets Big on China as Press
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