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3 COVID-19 Pill Stocks to Watch

By Keith Speights and Brian Orelli, PhD – Oct 16, 2021 at 6:10AM

Key Points

  • Merck is the frontrunner in the race to market a COVID-19 pill.
  • Roche, along with its smaller partner, Atea, isn't too far behind Merck.
  • Pfizer should also report data for its COVID-19 pill before the end of the year.

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These big drugmakers could soon compete against each other with oral COVID-19 therapies.

Merck (MRK -3.29%) and Ridgeback Biotherapeutics have already made a big splash with positive results for their COVID-19 pill. However, there are are other companies nipping at their heels. In this Motley Fool Live video recorded on Oct. 6, Motley Fool contributors Keith Speights and Brian Orelli answer a viewer's question about stocks that could win with their COVID-19 pills.

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Keith Speights: MG, he says or she says, "COVID pill is the next big thing for COVID. Any thoughts on which stocks to keep an eye on." Any ideas there?

I know you have an idea there, Brian.

Brian Orelli: Obviously, Atea Pharmaceuticals (AVIR 2.60%), which we talked about earlier, is a big one than the other ones and then it's partnered with Roche (RHHBY -1.72%), which is obviously a large pharmaceutical company. Merck (MRK -3.29%) is partnered with Ridgeback. Ridgeback is a privately held company so you can't buy that one but you could certainly buy Merck. Then the third major one is Pfizer (PFE 0.84%) and so that's an option.

Merck obviously has data already so we know that one works. Then Pfizer and Atea and Roche should have their data before the end of the year.

Speights: There's a follow-up question to that. I want to pose to you. Nice handle there, Opossum says, "Is Merck's pill still in the spotlight. Stock is not moving at all."

Orelli: Well, it jumped quite a bit on Friday's news. I don't think you'd expect it to continue up substantially beyond that. I think it jumped up about $18 billion in market cap. That was a substantial move, which I don't know whether that's a 100% justified. I think a lot of it's going to depend on how much competition it has and also what the breakthrough COVID-19 cases are and whether it actually gets prescribed for those cases or is it only going to get prescribed for people who are substantially likely to have issues with COVID-19. Those would be people with underlying conditions and people who aren't vaccinated.

If it goes to that level, then I think it's a relatively small number of patients who would get prescribed it compared to, we're going to give it to everybody who tests positive for COVID-19. That's obviously a substantially larger market. We'll have to wait and see what the FDA thinks of the data, especially the safety data, which will determine how many people actually get treated with these oral COVID-19 treatments.

Speights: I think it's just important for investors to remember that catalysts like Merck had aren't the gifts that just keep on giving. You get a bump and the stock doesn't always keep going up after that great news. So Merck is going to need another catalyst to make the stock go up even more.

Keith Speights owns shares of Pfizer. The Motley Fool owns shares of and recommends Atea Pharmaceuticals, Inc. The Motley Fool has a disclosure policy.

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