Merck’s Covid Pill Reduces Hospitalization by About 50%

New study results from a five-day course of molnupiravir (an oral antiviral pill developed by Merck and Ridgeback Biotherapeutics) showed a large reduction in hospitalization and deaths when compared to a placebo.

Molnupiravir is $700/course for 40 pills which are to be taken over five days.

Merck said they would seek emergency approval from the FDA, but it might take a month for this to happen.

Since the dawn of the pandemic, we have desperately needed an early/easy-to-use therapeutic to combat Covid-19. With anti-vaxxers and breakthrough infections, it’s becoming clear that vaccines alone are simply not enough to put the pandemic behind us.

This news will have broad ramifications for vaccine/therapeutic stocks. Already we can see many are down significantly. While this makes sense for stocks like Modern and BioNTech, it does not make sense for Gilead.

Gilead has already shown that early use of remdesivir prevents hospitalization by 87%. This is with only a three-day course of intravenous remdesivir (the worst version of remdesivir.) There is a much better version in the pipeline.

Matinas Biopharma is working with Gilead and the NIH to develop an LNC oral version of remdesivir. Early use of remdesivir has already been shown to outperform molnupiravir, although the IV administration of it makes the early use of remdesivir impractical. Molnupiravir can be given orally, which makes it superior from a distribution/healthcare administration standpoint.

But an LNC version of remdesivir could be even better than 87%. LNC technology was designed to make drugs easier to administer, less toxic, and more effective. This is a technology that was recently proven to work in a superior version of amphotericin B.

So, I think the question that investors need to be asking themselves is: If molnupiravir’s reduction in hospitalization of 50% is good enough to add 18 billion in market cap to Merck, then what might positive trial results from LNC oral remdesivir do for Gilead and Matinas?

For Gilead this could represent an increase in share price of 20%.

For Matinas the increase could be several hundred to several thousand percent, depending on the license fee/arrangement with Gilead.

So, while I’m thrilled that molnupiravir will save lives and set us on a path towards normalcy, a 50% reduction in hospitalization is not enough to end the pandemic. Pfizer and Roche are also working on an oral anti-viral, so perhaps the future of Covid-19 treatment in the unvaccinated/breakthroughs is a cocktail of drugs. Depending on how at risk you are, your doctor might recommend you take them all.

All in all, this is great news. It’s hope. It’s another lantern in the dark that we can follow back to the old world. One where we don’t have to live in fear of strangers coughing in the elevator.

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(Disclaimer: This post does not constitute financial advice. Do your own due diligence before making an investment.)