Please ensure Javascript is enabled for purposes of website accessibility

France Rejects Merck's COVID-19 Pill: How Bad Is the News?

By Keith Speights and Brian Orelli, PhD – Updated Jan 2, 2022 at 10:44PM

Key Points

  • The French National Authority for Health determined that other therapies were much more effective than molnupiravir.
  • Merck's agreement with France for the COVID-19 pill was only in the ballpark of $30 million.
  • Although the French rejection won't hurt Merck much, molnupiravir won't generate the level of sales globally that were anticipated.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

French regulators were concerned about the low efficacy of molnupiravir.

At least one major country won't allow the use of Merck's (MRK -0.41%) COVID-19 pill molnupiravir. French regulators announced in December that the therapy would not be authorized. In this Motley Fool Live video recorded on Dec. 15, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss how bad this news is for Merck.

10 stocks we like better than Merck & Co.
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Merck & Co. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of December 16, 2021


Keith Speights: We mentioned that Merck had some bad news for its COVID-19 pill. Well, that bad news was that French regulators announced last Friday that they're not going to allow Merck's oral COVID-19 therapy molnupiravir to be used in the country. So why did Merck's pill get rejected, and how bad is this news for the company?

Brian Orelli: It seems like the French National Authority of Health basically concluded that monoclonal antibodies are much more effective than Merck's drug, and so that's the reason why they're not going to use it in the country. The company [Editor's note: Brian misspoke since he meant to say "the country"] had committed to buy doses to treat 50,000 people. So at $600 per treatment, that would be about $30 million in sales.

That's certainly not going to make or break Merck. But of course, it could've gotten additional sales beyond that initial commitment.

The bigger question is: How will the European Medicines Agency decide? And they're scheduled to decide early next year on whether it'll get used in all of Europe. And that would probably be obviously a bigger deal if all of Europe doesn't actually use the drug.

Then the big unknown is what this is foretelling of the FDA decision, which we're still waiting for. The Advisory Committee voted 13 to 10 in favor of recommending Emergency Use Authorization. But that's obviously, was the majority, but not an overwhelming majority. We'll have to wait and see what the FDA decides as well. [Editor's note: The FDA granted EUA to Merck's COVID pill after this video was recorded.]

Keith Speights: Brian, I thought it was interesting that the French decision seemed to be based mainly, as you said, on the low efficacy and that it just wasn't worth it. Whereas the FDA Advisory Committee seemed even more concerned about some of the potential safety issues.

Brian Orelli: I think for the safety issues, I think it was still some of the quotes I saw from the Advisory Committee were basically people saying: "Well, the only reason we're really debating the safety issues is because of the low efficacy. If it had much higher efficacy, then we would be less concerned about these safety issues because we know it's obviously helping people, and so whatever issues with the safety we might have, they will be counteracted by saving people's lives."

At this point, I think it had about a 30% reduction in hospitalization and deaths, and so the committee was worried about that low number compared to the safety issues.

Keith Speights: Assuming the FDA does grant Emergency Use Authorization to this pill, Merck is going to make a lot of money here. But its prospects really are much less, I think, than originally hoped. I think the light has dimmed somewhat for molnupiravir over the last few weeks.

Brian Orelli: Yeah, definitely.

Brian Orelli, PhD has no position in any of the stocks mentioned. Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.