𝐓𝐡𝐞 𝐂𝐨𝐫𝐨𝐧𝐚 𝐏𝐢𝐥𝐥
𝐓𝐡𝐞 𝐔𝐒 𝐩𝐡𝐚𝐫𝐦𝐚𝐜𝐞𝐮𝐭𝐢𝐜𝐚𝐥 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 $MRK (Merck & Co.) 𝐡𝐚𝐬 𝐬𝐮𝐜𝐜𝐞𝐬𝐬𝐟𝐮𝐥𝐥𝐲 𝐭𝐞𝐬𝐭𝐞𝐝 𝐚 𝐧𝐞𝐰 𝐚𝐜𝐭𝐢𝐯𝐞 𝐬𝐮𝐛𝐬𝐭𝐚𝐧𝐜𝐞 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐂𝐨𝐯𝐢𝐝. 𝐇𝐢𝐠𝐡 𝐝𝐞𝐦𝐚𝐧𝐝 𝐢𝐬 𝐞𝐱𝐩𝐞𝐜𝐭𝐞𝐝. 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 𝐩𝐢𝐥𝐥 𝐰𝐨𝐫𝐭𝐡? 𝐀𝐧 𝐚𝐧𝐚𝐥𝐲𝐬𝐢𝐬.
A corona agent developed by the US pharmaceutical company Merck & Co. has shown encouraging results in clinical trials: 𝐓𝐡𝐞 𝐫𝐢𝐬𝐤 𝐨𝐟 𝐛𝐞𝐢𝐧𝐠 𝐡𝐨𝐬𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐞𝐝 𝐰𝐢𝐭𝐡 𝐜𝐨𝐯𝐢𝐝 𝐝𝐢𝐬𝐞𝐚𝐬𝐞 𝐰𝐚𝐬 𝐫𝐞𝐝𝐮𝐜𝐞𝐝 𝐛𝐲 𝟓𝟎 𝐩𝐞𝐫𝐜𝐞𝐧𝐭 𝐛𝐲 𝐭𝐚𝐤𝐢𝐧𝐠 𝐌𝐨𝐥𝐧𝐮𝐩𝐢𝐫𝐚𝐯𝐢𝐫. Fatalities did not occur. Merck and its development partner Ridgeback are now hoping for accelerated approval. This could happen in the USA by the end of the year.
Although there are already drugs to treat covid, Molnupiravir would fill a gap: The drug can be easily administered as a pill and helps at-risk patients who show symptoms but are not yet so severely ill that they need to be hospitalised. The drug Remdesivir from the biotech company $GILD (Gilead Sciences Inc) , on the other hand, is used for patients who are already suffering from severe symptoms. Antibody cocktails like those developed by $REGN (Regeneron Pharmaceuticals) are administered by infusion and are therefore expensive to use. Merck's new active ingredient could therefore significantly relieve the burden on the healthcare system.
From the stock market's point of view, the drug's sales potential is particularly interesting. An agreement with the US authorities gives an indication. 𝐀𝐜𝐜𝐨𝐫𝐝𝐢𝐧𝐠 𝐭𝐨 𝐭𝐡𝐢𝐬 𝐚𝐠𝐫𝐞𝐞𝐦𝐞𝐧𝐭, 𝐌𝐞𝐫𝐜𝐤 𝐰𝐢𝐥𝐥 𝐬𝐮𝐩𝐩𝐥𝐲 𝐭𝐚𝐛𝐥𝐞𝐭𝐬 𝐟𝐨𝐫 𝟏.𝟕 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐭𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭𝐬. 𝐓𝐡𝐞 𝐩𝐫𝐢𝐜𝐞 𝐟𝐨𝐫 𝐭𝐡𝐢𝐬 𝐩𝐚𝐜𝐤𝐚𝐠𝐞 𝐢𝐬 𝟏.𝟐 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 𝐝𝐨𝐥𝐥𝐚𝐫𝐬, 𝐰𝐡𝐢𝐜𝐡 𝐜𝐨𝐫𝐫𝐞𝐬𝐩𝐨𝐧𝐝𝐬 𝐭𝐨 𝟕𝟎𝟎 𝐝𝐨𝐥𝐥𝐚𝐫𝐬 𝐩𝐞𝐫 𝐭𝐫𝐞𝐚𝐭𝐦𝐞𝐧𝐭. The US company (which is completely independent of the German Merck KGaA, not tradable on eToro) also announced that it wants to produce ten million doses by the end of the year. So that could amount to a sales potential of seven billion dollars. According to data from the financial service Bloomberg, analysts had recently included around two billion dollars each for the current and coming year in their forecasts.
𝐃𝐫𝐮𝐠 𝐢𝐬 𝐚 𝐯𝐚𝐥𝐮𝐚𝐛𝐥𝐞 𝐚𝐝𝐝𝐢𝐭𝐢𝐨𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐲'𝐬 𝐥𝐢𝐧𝐞-𝐮𝐩
Merck turned over 48 billion dollars last year. The top performer was the cancer drug Keytruda with 14.4 billion dollars. Molnupiravir could become the second strongest product in the US company's medicine cabinet. However, there are still question marks. So far, little is known about possible side effects. In addition, the drug is not suitable for every patient. From the stock market's point of view, it is also important what price Merck will actually be able to charge for future deliveries. Competition is likely to become more intense. Among others, the Swiss pharmaceutical giant $ROG.ZU (Roche Holding Ltd) (also in our portfolio) has a Covid drug in the pipeline.
For the American Merck, Molnupiravir, as soon as the active ingredient is approved, should be an important growth accelerator. According to data compiled by Bloomberg, the company expects group sales to increase by an average of around six percent by 2024, and adjusted profits by around twelve percent. The potential of Molnupiravir is likely to be cautiously calculated. Besides, the Dow Jones-listed stock offers a dividend yield of more than three per cent, even after the recent price increase.
𝐓𝐡𝐞 𝐬𝐡𝐚𝐫𝐞 𝐫𝐞𝐚𝐜𝐭𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐧𝐞𝐰𝐬 𝐰𝐢𝐭𝐡 𝐚 𝐬𝐢𝐠𝐧𝐢𝐟𝐢𝐜𝐚𝐧𝐭 𝐣𝐮𝐦𝐩 𝐢𝐧 𝐩𝐫𝐢𝐜𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐬𝐭𝐢𝐥𝐥 𝐦𝐨𝐝𝐞𝐫𝐚𝐭𝐞𝐥𝐲 𝐯𝐚𝐥𝐮𝐞𝐝.
I wish you all an exciting and fullfilling week!