Big pharma companies Merck (MRK 0.36%) and Pfizer (PFE 0.19%) have been neck and neck in the most recent coronavirus race: the race to develop a pill to fight the virus. Pfizer has drawn a lot of attention due to its leadership in the coronavirus vaccine market. The idea has been this: If Pfizer brings the first pill to market, the company can dominate in prevention and treatment.

Merck may have burst that Pfizer dream last week though. Merck reported strong data from trials of its investigational covid pill -- and said it would request emergency authorization as soon as possible. Pfizer said back in July it would report data from its trial in the fourth quarter. Of course, that could be at any point as of now. Still, it's clear Merck is a step ahead from a timeline perspective. Let's take a closer look at what this means for Pfizer and its shareholders.

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The covid treatment market

First, a quick look at the treatment market. Right now, options are limited. The U.S. Food and Drug Administration has approved Gilead Sciences' Veklury (remdesivir) -- an antiviral administered to hospitalized patients through infusion. And the regulatory agency has authorized monoclonal antibody treatments. These are meant for at-risk individuals with mild-to-moderate illness. They're given through infusion in a healthcare setting.

So far, though, there hasn't been a pill option that people can take on their own. Several companies are working on possibilities. But Merck and Pfizer have remained at the head of the pack. At least when it comes to timing.

A pill could be a game-changer. That's because it can be administered quickly and easily outside of a healthcare setting. People may be more likely to agree to take a pill at home than to make an appointment for an infusion. A pill also is a game-changer because it may halt the illness before it wreaks havoc. And that means fewer people will end up in the hospital.

Pills also offer a storage advantage. It's much easier for countries to stockpile pills than products needing more space or specific temperatures.

Peak sales of $5 billion

So, it's clear pills could be big. SVB Leerink analyst Daina Graybosch predicts the Merck pill -- molnupiravir -- could generate peak annual sales of about $5 billion next year, according to Stat News. But does this first-to-market position mean bad news for Pfizer? Not necessarily.

Of course, it's ideal to be first to market. If your product works well, it's likely people will stick with it. But, as we've seen with the coronavirus vaccine market, there is room for more than one player. I think this will be the case in the treatment market as well. First, there's the idea of production and delivery. One company will have difficulty supplying the entire world.

Second, there's the idea of product profile and efficacy. Merck's molnupiravir trips up the virus' ability to replicate properly. That's why it must be given within the first few days of infection -- before extensive replication has happened. Pfizer's investigational pill also blocks viral replication and must be given early on. But it works in a different way than molnupiravir. It stops protease enzymes from doing their job. Potentially, doctors may decide that one of the drugs is better for some patients and the other is best for other patients. Or studies may show positive results when combining the treatments.

Molnupiravir reduced the risk of hospitalization or death by 50% compared with placebo in phase 3 trials. This is very positive. But we don't yet have Pfizer's data. If Pfizer results are about the same, it's likely the companies can share the treatment market. However, if Pfizer's results are much better or not as good, the whole picture could change.

What does this mean for Pfizer investors?

So, what does this mean for Pfizer and its investors? Pfizer won't lose out if it makes it to market after Merck. What will determine Pfizer's market share potential will be the data. It's important for Pfizer investors to keep an eye on that news -- and eventually compare the Pfizer results to those of Merck's investigational pill.

In any case, though, Pfizer investors shouldn't worry. The company leads the global coronavirus vaccine market. Including the coronavirus vaccine, Pfizer sells eight blockbuster products and has 100 projects in the pipeline. Dominance in the coronavirus pill market would be great. But if it doesn't happen, there are still plenty of reasons to hang onto this pharmaceutical stock for the long term.