An advisory committee to the U.S. Food and Drug Administration (FDA) recently met to review the Emergency Use Authorization (EUA) submission for Merck's (MRK 1.43%) oral COVID-19 therapy, molnupiravir. Although the committee gave a positive recommendation, the vote was very close. In this Motley Fool Live video recorded on Dec. 1, Motley Fool contributors Keith Speights and Brian Orelli discuss why the FDA panel had some concerns about Merck's COVID-19 pill.
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Keith Speights: The FDA advisory committee reviewed the data on Merck's oral antiviral medication molnupiravir yesterday. What were the highlights of this FDA meeting?
Brian Orelli: Yeah, the advisory committee was fairly split on the risk benefit of the drug. To the vote was 13 yeses and 10 nos. The big concern here is that while molnupiravir works by incorporating nucleotide analogs into the virus. That creates mutations and hopefully accretive enough mutations that it inactivates the virus.
But the compound might also be incorporated in a patient's DNA and that could potentially cause mutations in the patient cells. The lower efficacy level that was compared to what was first reported, I think probably contributed to some of the no votes. If there is that risk of mutations, even if it's fairly low, but the benefit is now lower.
Now that skews the risk-benefit analysis toward more risky. Even with the mixed reviews by the advisors, I think the FDA is probably still likely to approve the drug. I wouldn't be surprised if it came with some contraindications like for pregnant women due to the risk of mutation.
Speights: I think you're right, I think the FDA is still going to approve this drug and Merck stands to make a lot of money. They have a multi-billion-dollar deal with the U.S. government that hinges upon authorization and so assuming that authorization comes relatively soon, Merck's about to have a lot more money but over the longer term is going to face pretty intense competition from Pfizer (PFE 0.89%) more than likely.
Orelli: Yeah, I think that Pfizer's drug, at least the initial data from Pfizer's drug looks substantially better than the totality data from Merck. We'll have to wait and see but I think that so far it looks like Pfizer might outpace Merck. But as you pointed out Merck is getting a payday at least initially from the U.S. government. Whether the drug has to get used or not is irrelevant to Merck but longer-term I think that Pfizer's drug looks better than Merck's drug at least initially.