Merck Submits EUA Application for Oral Antiviral Drug

Merck (MRK) and Ridgeback Biotherapeutics announced that the former has submitted an Emergency Use Authorization (EUA) application to the U.S. Food and Drug Administration (FDA) for an orally administered drug, molnupiravir, to treat COVID-19.

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The application has been made based on positive results from a Phase 3 MOVe-OUT clinical trial, which reveals that molnupiravir, if administered to non-hospitalized adult patients with mild-to-moderate COVID-19, reduces the risk of progressing to a severe case and hospitalization. (See Merck stock charts on TipRanks)

The interim analysis shows that molnupiravir reduces the risk of hospitalization or death by about 50%. About 7.3% of patients, who received molnupiravir, were either hospitalized or died through Day 29, as compared to 14.1% of placebo-treated patients.

With expectations of receiving regulatory approval, Merck has been producing molnupiravir at risk and expects to produce 10 million courses of treatment by the end of 2021. Also, earlier in 2021, the company entered into a procurement agreement with the U.S. Government to supply 1.7 million courses of molnupiravir.

Recently, Berenberg Bank analyst Luisa Hector maintained a Hold rating on Merck and raised the price target to $92 (upside potential of 14.1%) from $86.

Hector noted, “We update our forecasts to encompass the Acceleron acquisition, positive data for molnupiravir in COVID-19 treatment and a reduction in Pneumovax/Vaxneuvance sales which is more than offset by an increase in Gardasil sales. The net effect of these changes is an increase of 4-10% to our EPS forecasts.”

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The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 5 Buys and 4 Holds. The average Merck price target of $92.78 implies 15.1% upside potential to current levels.

According to TipRanks’ Smart Score system, Merck gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages.