The success of the Merck COVID-19 pill hits Moderna shares and shakes the healthcare sector

Oct 1 (Reuters) – Positive clinical trial results for Merck & Co’s (MRK.N) The experimental antiviral pill COVID-19 hit the health sector on Friday, causing the drugmaker’s stock price to skyrocket as it affected the high-flying stocks of vaccine companies and manufacturers of other anti-therapeutics. the coronavirus.

Merck shares rose as much as 12.3% and reached their highest level since February 2020 after The data showed that the company’s molnupiravir pill It could cut the chances of dying or being hospitalized in half for those most at risk for severe COVID-19. Experts hailed the news as a potential breakthrough in the fight against COVID-19.

At the same time, shares of vaccine manufacturers such as Moderna Inc (MRNA.O), Pfizer Inc (PFE.N) and its partner BioNTech SE were affected, with some analysts saying that the promise of an oral medication that can be taken at home could change the public perception of the risks associated with COVID-19.

“We see a modest headwind perception for vaccine stocks like MRNA (Moderna) if the market thinks that people will be less afraid of COVID-19 and less likely to get vaccinated, if there is a simple pill that can treat COVID- 19, “Jefferies said analyst Michael Yee in a customer note.

Shares in Moderna fell 13% in midday trading, while Pfizer, which is developing its own COVID-19 pill, fell 1.3%. BioNTech’s US shares fell 11%.

For Moderna investors, the Merck news presented an opportunity to secure earnings after an already staggering run. Moderna’s shares, which were added to the S&P 500 in mid-July, are still up 220% in 2021 despite declines on Friday. BioNTech shares were also up about 200% for the year, even with Friday’s slide.

The Merck news is a “big reason people are taking profits off the table” in both Moderna and BioNTech shares, said Sahak Manuelian, director of stock trading at Wedbush Securities. “These movements may be aggravated to the downside given the momentum they have had to the upside.”

FILE PHOTO: Vials of coronavirus disease (COVID-19) vaccines from Pfizer-BioNTech and Moderna are seen in the city of Ricany near Prague, Czech Republic, on February 25, 2021. REUTERS / David W Cerny

Shares of other companies with COVID-19 vaccines also fell, with AstraZeneca (AZN.L) down 2% and Novavax (NVAX.O) falling 16%.

Companies with other COVID-19 therapies given intravenously or by injection are also trading lower, with Regeneron Pharmaceuticals at (REGN.O) almost 5% and Gilead Sciences Inc (GOLDEN.O) of about 2%.

Health care (.SPXHC) it was the only one of the 11 S&P 500 sectors in negative territory in midday trading, falling 0.5%.

“We see molnupiravir, with its oral form, as a clear game changer that is likely to have a significant impact not only on the treatment paradigm for COVID-19, but also has potential utility in the area of ​​prevention,” 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 reduce hospitalization and death in already infected people.

Merck, whose shares rose about 9%, is leading the race in developing the first oral antiviral drug for COVID-19. Rivals such as Pfizer and Swiss pharmaceutical company Roche Holding AG (ROG.S) with partner Atea Pharmaceuticals Inc (AVIR.O) they are conducting late-stage trials of their pills. Atea’s shares rose 19%. read more

Merck, who discontinued his own COVID-19 vaccineprogram, had seen its shares drop about 4% for the year through Thursday, before turning into positive territory for 2021 on Friday.

“Merck has been dead in the water for investors for the last few quarters,” said Kevin Gade, a portfolio manager at Bahl & Gaynor, which owns shares in Merck. “This shows that their R&D engine is not dead and that they were the first … in what could be a multi-million dollar opportunity.”

Reporting by Lewis Krauskopf in New York and Manojna Maddipatla in Bengaluru; Editing by Ira Iosebashvili and Bill Berkrot

Our Standards: The Thomson Reuters Trust Principles.

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