Merck Signs $1.2 Billion U.S. Supply Pact for Covid-19 Pill

(Bloomberg) -- Merck & Co. entered a $1.2 billion agreement to supply the U.S. government with its pill for Covid-19, should the experimental drug receive regulatory clearance.

Merck agreed to supply 1.7 million courses of the treatment, called molnupiravir, to the U.S., according to a statement Wednesday. Likened to Tamiflu, an antiviral used in the early stages of influenza, the Covid drug is being developed with Ridgeback Biotherapeutics.

While vaccines are reducing the number of new Covid infections, mainly in wealthy countries rolling out large immunization campaigns, doctors need new treatments for those who do get sick. Molnupiravir is in a final-stage study of non-hospitalized patients with confirmed cases of Covid-19 and at least one risk factor associated with poor disease outcomes.

Merck expects data from the trial in September or October, executives said in April, and could approach U.S. regulators for authorization within the year. The Kenilworth, New Jersey-based company’s shares rose 2.2% at 9:53 a.m. in New York.

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Molnupiravir is in a class of drugs called nucleoside analogues that target the virus’s reproductive mechanism. It introduces errors into the viral genetic material that are then replicated until the pathogen is defunct. The cumulative mechanism makes it better suited to tackle the disease in its earliest stages, according to the company.

In April, results from a mid-stage trial showed the drug reduced virus levels in non-hospitalized patients but didn’t provide a meaningful benefit in preventing hospitalizations and deaths. The pill provided no benefit for sicker, hospitalized patients, the trial found, and Merck stopped developing it as therapy for them.

Roy Baynes, Merck’s senior vice president and head of global clinical development, said in an interview at the time that the trial wasn’t properly designed to define the drug’s benefit. Its hopes now rest on the final-stage leg of the outpatient study.

Merck plans to apply for clearances outside the U.S. and expects to have more than 10 million courses of therapy available by the end of 2021, according to the statement. A course of treatment consists of 10 pills, given twice a day across five days.

The drug giant has also allowed generic drug manufacturers to make the product for 104 low-and-middle-income countries through non-exclusive voluntary licensing agreements.

Merck gained rights to molnupiravir from Ridgeback last year. The Miami-based biotechnology company, which had licensed the compound from Emory University two months earlier, received an undisclosed payment and stands to share some of the profits if the drug is approved.

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