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Merck and Ridgeback’s molnupiravir will be ‘complementary, but not a competitor’ to COVID-19 vaccines: analyst

What do Merck and Ridgeback’s eye-opening data, recently released for its antiviral molnupiravir on high-risk COVID-19 patients, mean for manufacturers of vaccines?

Analysts from the ODDO BHF financial services group see little impact in the short and intermediate term. Even though inoculation rates are low in most lesser developed countries, ODDO says it’s unlikely that countries will shift away from vaccination campaigns to focus primarily on treating high-risk patients with COVID.

This is the case despite trial data showing molnupiravir providing a 50% reduction in the hospitalization rate and a 100% reduction in the death rate among patients within five days of symptomatic illness.

“The impact on vaccine manufacturers such as Moderna should be limited,” ODDO wrote in a report to investors. “We believe that molnupiravir can be complementary to the COVID-19 vaccine but not a competitor.”

With Merck able to manufacture no more than 10 million doses of the oral treatment the rest of this year, far less than what is needed worldwide, there should be little change in demand for vaccine, ODDO said. Additionally, the analysts don’t see a significant change in the number of patients hospitalized because of the emergence of molnupiravir.

Many factors will continue to fuel demand for vaccines, ODDO says, citing new orders, booster shot rollouts, the push to vaccinate children and the need for new multivalent vaccines as new variants spread.

“Momentum should continue to build in 2022,” ODDO wrote.

As for Merck and Ridgeback, the data put molnupiravir in a position to become the standard of care for high-risk COVID-19 patients, Bernstein analysts said.

This represents a “significant win,” for Merck, analyst Ronny Gal wrote. “But the 8.4% stock move seems to capture a generous scenario.”

They figure that the treatment will be approved by the end of this year, but the market may soon be crowded, as other antivirals, made by Pfizer and Roche, are in late-stage testing. Based on molnupiravir’s study results, Bernstein expects these companies will also present strong data and be close behind with approvals.

So how much revenue will Merck generate from molnupiravir?

Bernstein took a stab at a figure for 2022 based on an estimate that 20 million Americans—roughly the same as this year—will be infected and 20% of them will be treated with oral antivirals. Based on Merck’s price of $700 per dose, per a recent supply deal with the U.S. government, Bernstein sees potential for $2.8 billion in sales in the U.S. and $5 billion worldwide.

There’s another factor that bodes well for the future of antivirals as COVID treatments, Bernstein analysts say. In general, antivirals offer greater hope against variants because they “target proteins other than spike,” Gal wrote.