Merck slumps on COVID pill’s lower effectiveness

Merck & Co. shares fell after new data showed its COVID-19 pill was less effective than previously reported and U.S. regulators raised concerns about its safety and long-term effectiveness.

Merck’s latest trial results, reported Friday from a larger population than its initial study, show its pill reduced the risk of hospitalization or death among adults with mild to moderate disease by 30%. That was less than a previous estimate of 48%.

Staff at the Food and Drug Administration, meanwhile, called the pill, molnupiravir, effective for individuals at increased risk for severe disease. But they raised questions about whether the treatment could cause birth defects, as well bone and cartilage toxicity and genetic mutations. The staff also cited possible resistance to the drug, which occurs when viruses and bacteria evolve to blunt or defeat a drug’s mechanism of attack.

The documents published Friday by the FDA are meant to spur discussion in a meeting next week of advisers to the agency, which will then determine whether to authorize molnupiravir for emergency use.

Shares of Merck slid as much as 6.3% on the news, while rival Pfizer Inc., which is producing its own COVID pill that has shown to be more effective in early studies, rose as much as 8%. The news comes after the discovery of a new coronavirus variant in South Africa, described by scientists as very different to previous incarnations and of serious concern.

The latest Merck trial analysis includes data from all participants, the company said in a statement. Nine deaths were reported in the placebo group, and one in the group receiving the treatment.

Merck sought U.S. authorization for molnupiravir, also called Lagevrio, in October after a late-stage study showed it cut the risk of hospitalization or death by around 50% in high-risk patients. Pfizer’s Paxlovid has been submitted for review for use in the same population.

If authorized by regulators, the pills from Merck and Pfizer are likely to overtake infused drugs monoclonal antibodies from Regeneron Pharmaceuticals Inc. and Eli Lilly & Co. that are more expensive and harder to use.

COVID cases and hospitalizations are climbing after a slowdown in the summer’s delta-fueled surge.