What happened
Good news for some companies often means bad news for others. That's what we're seeing Friday as the stocks of several COVID-19 vaccine makers sank following the announcement by Merck (MRK 1.69%) and Ridgeback Biotherapeutics of positive results from a late-stage study of an oral COVID-19 treatment.
Shares of Pfizer (PFE 1.04%) were down by 1.6% as of 11:20 a.m. EDT after having declined by as much as 3.1% earlier in the session. Pfizer's COVID vaccine partner, BioNTech (BNTX 1.31%), fared even worse, with its stock sliding by 11.9%.
A couple of companies that have COVID-19 vaccine candidates that aren't on the market yet also felt the sting of the news from Merck and Ridgeback. Novavax (NVAX 1.55%) stock was trading 17% lower, while shares of Vaxart (VXRT 5.30%) dropped by 12.3%.
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So what
Merck and Ridgeback reported Friday that hospitalizations were reduced by roughly half for COVID-19 patients who had been given the oral antiviral therapy molnupiravir compared to those given a placebo. And while eight patients died in the placebo group through day 29 in the study, none had died in the group receiving molnupiravir. The results were so positive that the independent data monitoring committee for the study talked with the Food and Drug Administration and recommended that patient recruitment be stopped early.
Why did the vaccine stocks sink on this news? Investors appear to be worried that the potential availability in the near future of Merck's and Ridgeback's pill could reduce demand for COVID-19 vaccines. Also, Pfizer is developing its own oral antiviral therapy for the coronavirus. Its drug could face stiff competition from molnupiravir, assuming they both make it to market.
Despite investors' concerns, there's a distinct possibility that a COVID-19 pill wouldn't make much of a dent in sales for vaccines. Even a 50% reduction in hospitalizations doesn't stack up against the protection that the currently available vaccines offer. There's also no guarantee that Merck's and Ridgeback's pill will always prevent death from COVID-19.
Novavax and Vaxart face additional challenges. Investors are growing more concerned that Novavax's delays in filing for an Emergency Use Authorization (EUA) for its COVID-19 vaccine candidate could significantly reduce its commercial prospects. Meanwhile, Vaxart is being sued for allegedly artificially boosting its share price by making misleading statements about its involvement in Operation Warp Speed.
Now what
Merck and Ridgeback plan to file with the FDA for an EUA for molnupiravir as soon as possible. The two companies also intend to submit for regulatory approvals or authorizations in other countries.
Pfizer is evaluating its own COVID-19 pill candidate in late-stage testing. The big drugmaker hopes to file for EUA of its oral therapy by the end of this year.
Also, Pfizer and BioNTech expect to soon submit their request to the FDA for an EUA that would allow their COVID-19 vaccine to be administered to children in the 5- to 11-year-old age group. The partners provided positive initial data to the FDA from a late-stage study of their vaccine in this age group on Tuesday.
Novavax is still preparing to file for EUAs for its COVID-19 vaccine in the United Kingdom and several other countries. The company also awaits a decision by the World Health Organization on granting Emergency Use Listing for the vaccine.
Vaxart expects to soon advance its next-generation oral COVID-19 vaccine into phase 2 testing. The company is also evaluating an experimental oral norovirus vaccine in an early stage clinical study.
