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Is Merck’s New Drug a COVID Game-Changer?

The pill has done well in early trials.

October 4, 2021

Vaccines have slowed down the COVID-19 pandemic, but there are breakthrough cases and unvaccinated people who become effective. Now, a new drug from Merck (NYSE: MRK) may be able to help treat people in the early stages of infection limiting how sick they get and preventing them from having to go to the hospital.

The drug, molnupiravir, performed well enough in a late-stage trial that the company stopped enrolling new subjects in consultation with the U.S. Food and Drug Administration (FDA). These results put the anti-viral pill on a path to potentially be approved for use by the end of the year.

It’s not a cure-all — the trial results show that taking molnupiravir in the early stages of being infected cut serious illness rates by about 50% — but it could make a meaningful impact. Cutting hospitalization rates frees up doctors, nurses, and hospital beds to treat not just COVID patients but also people with unrelated medical concerns. This treatment could help meaningfully relieve stress on hospitals that have been stretched to (or in some cases beyond) their limits.

Maxx Chatsko joined Dan Kline on the Oct. 1 “7investing Now” to discuss this breaking news and examine what it means in the ongoing battle to get life back to what it was before the pandemic.

A full transcript follows the video.

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Maxx Chatsko  14:52  Let’s talk about the COVID.

Dan Kline  14:54  Oh dear God I forgot we have another topic.

Maxx Chatsko  14:56  We’re all over the place. That’s fine. We added this last minute sorry.

Dan Kline  14:58  Sorry this is very last minute but I teased it at the beginning, so it’d be very bad if I didn’t do it. So I woke up this morning. To be fair, there were some rumors of this yesterday. But there is a new drug that basically has done so well in trials, that Merck (NYSE: MRK) has gone to the FDA and said, Do we really have to do any more trials? Like I know, that’s not the technical thing that happened.

But Maxx, what is this drug? What does it do? And how might it be a useful tool? No hyperbole if possible, in the battle against COVID, which I picture as looking somewhat like the old Colgate commercials where they fought the cavity creeps. But that is probably before your time. And also not relevant as a way of picturing this. But Maxx, what is Merck done? And what does it mean? Yes, this

Maxx Chatsko  15:39  It is interesting, because Merck came out in the pandemic, and obviously, it’s a big opportunity not only to help people maybe help the world get out of the epidemic, but also, you know, good way to generate some revenues and profits. If you can develop a vaccine or a treatment. We’ve seen that of course, with the initial vaccines, there’s going to generate 10s of billions of dollars in revenue this year, also, probably next year as well. Merck actually tried to develop two vaccines and they just weren’t really you know, up to par. Maybe a little too little, maybe a little too late. Developing some other treatments. Maybe they nixed those in clinical trials as well.

But one of the big acquisitions they made relatively early on in the pandemic was a Ridgeback Biotherapeutics. This company makes antivirals, so things that go in and maybe disrupt how viruses can replicate within your body. So it’s kind of adding to what your immune system is already doing, to protect yourself against these infections. So they were developing an oral pill, you take it every day, an antiviral, and this is after you’ve been diagnosed to have COVID. And you take this and maybe it lessens your symptoms, it helps you to avoid having severe disease or maybe ending up in the hospital. And they were running as big long clinical trial testing this oral daily antiviral. And like Dan said, I mean, it works so well that the FDA was like, Hey, why don’t you close this up early, we’re just wanting you to like, you know, submit this for approval, and we’ll go from there.

So they’re hoping to have approval of this daily antiviral that you take by mouth, before the end of the year, they’re gonna maybe have 10 million treatments available. Again, there’s daily dosing, so 10 million treatments is not necessarily treating 10 million people. But this is a really nice arrow in the quiver. Especially we’ve seen like, there’s just for whatever reason, in some parts of the country, there’s lower vaccination rates, but you know, push came to shove, and you did actually get infected, and you didn’t wanna end up in the hospital, this now provides a very easy and convenient way to maybe quite significantly lower the amount of individuals who have severe disease or end up in the hospital. About 50% reductions. So I mean, that could be good for freeing up, you know, beds in the hospital for more serious conditions, things that are not preventable, like COVID is now and maybe even again, like people don’t want to get the vaccine. Fine. We won’t get into that. But now at least you have this very convenient option as well. So this is really good.

Dan Kline  17:51  Dear God, we won’t get into that. But even whether you’ve had the vaccine, you haven’t, and we’re all vaccinated, or at least the two of us are, and we’ve talked about it publicly, or at least I think we have. And so sorry, if I just said something I shouldn’t have. But I think we’ve talked about it publicly. But that being said, so Maxx, if if people get this, and yes, it will be bad to give 10 million people one dose, that would not be very effective. So but if people get this, and we have the number of hospitalizations, that has a bigger effect, right than just keeping half the people out of the hospital. It also frees up care.

So it opens up hospital beds, not just for people with COVID, who need that special attention. But also for like the guy who had a heart attack, or the woman who broke her ankle, or whatever it might be. So if we could have this happen, and half the cases don’t go to the hospital, the actual benefit should be bigger than half right? And I know I’m not expecting you to give an actual number. It’s just sort of anecdotally, there should be longer-reaching effects of this, right?

Maxx Chatsko  18:50 Yeah, exactly. So this is not like one plus one equals two, it’s more like one plus one equals like seven maybe right? This is a very nice thing to have for hospitals in the country. Because the company says it’s relatively easy to manufacture these, I’m not really sure if that’s true antivirals or have some complicated process as well. But if already intended to have like 10 million treatments before the end of the year, then I mean, they did have a long time, maybe get the supply chains in place for you know, some of the really weird reagents you need to make these things that this specific treatment.

So maybe that is believable, and they’re gonna have more available more than 10 million treatments available in 2022. So I mean, this is really nice. And again, it’s more convenient than like, you know, you go to the hospital, maybe you need to take antibody administration because you need to get that through an intravenous infusion that could take an hour or maybe two hours. If you go to a special facility that has that infrastructure. Something like this, I mean, you could literally go to the pharmacy pick it up and then just take it at home right. So this is like really hard obviously –

Dan Kline  19:48  Or better yet, go to a telemedicine appointment get it and have the pharmacy deliver because you have COVID so don’t go to the pharmacy. If you can possibly avoid that. Depending on where you live, there are all sorts of delivery services that for this type of drug, not for certain controlled substances. But for this type of drug depends where you live, the laws vary a lot by state. This is really encouraging. And when I said to Maxx this morning, I’ll let him go in a second here.

What I said to Maxx this morning is, I’m just amazed by science. The problem with science, not the problem of science. But it’s probably frustrating as a scientist to be working for, like 20 years on something. And you know, amazing advancements have been made, but the right scenario hasn’t come up or you haven’t hit the endpoint. So it’s basically like telling your friends like you’re writing a novel and you know, your novels great, or at least you think it is, but they don’t know anything about it until it’s released. We’ve actually seen just how powerful some things are, you know. We obviously learned that the mRNA platform has the ability to be transformative. And when we see the ability to quickly spin up an antiviral, that could be another tool in controlling this pandemic. Makes me feel good about humanity and I don’t always feel great about humanity. I think that’s like anyone could probably say that.

But Maxx Chatsko, you have work to do. Gonna let you get back to doing that. I totally appreciate you popping in. It is a tough day for the 7Investing team.

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