Merck-U.S. Deal for Covid Drug Shows Need for Therapies Persists

The U.S. government agreed to pay Merck & Co. $356 million for tens of thousands of doses of an experimental treatment for severe Covid-19, adding to its arsenal of potential therapies at the same time that a mass immunization effort is getting underway.

Under the deal, Operation Warp Speed, the U.S. accelerator for coronavirus therapeutics and vaccines, will fund manufacturing and secure supply of 60,000 to 100,000 doses of the drug, called MK-7110, through the end of June.

The intravenous therapy has yet to receive an emergency-use authorization or approval from the Food and Drug Administration. In an interim study, it significantly improved the likelihood and speed of recovery for severe and critical Covid-19 patients needing oxygen, reducing the risks of respiratory failure and death by more than 50%. Doses will be distributed once the FDA clears the drug for use.

The U.S. has authorized and is distributing two coronavirus vaccines, but a continuing surge in infections has highlighted the need for more treatment options. The U.S. has averaged roughly 214,000 new cases a day in the past seven days, according to Johns Hopkins University data, and on Tuesday the country recorded more than 3,000 deaths.

“Even with the best vaccines, we still see emergence of disease,” Merck Chief Marketing Officer Michael Nally said in an interview on Tuesday before the pact was announced. The company, which also has two vaccines in development, believes “therapeutics are going to have utility long into the future in this case,” he said.

“Ultimately there’s going to be a lot of people unprotected through 2021 globally, and we need other interventions to ease the pain and suffering of this pandemic,” Nally said.

The Kenilworth, New Jersey-based drugmaker’s shares gained 1.1% to $80.28 on Wednesday. Bloomberg first reported the U.S. talks with Merck on Dec. 9.

Warp Speed Matchmaking

Merck acquired MK-7110 in its $425 million takeover of closely held biotechnology company OncoImmune Inc. in November. OncoImmune, based in Rockville, Maryland, had developed the drug to treat autoimmune diseases and inflammation.

Operation Warp Speed’s Chief Scientific Adviser Moncef Slaoui, an immunologist and former pharmaceutical-industry executive, introduced Merck executives to OncoImmune after he reviewed the company’s clinical trial data and saw the drug’s potential as a virus treatment. Slaoui wanted to find a way to help OncoImmune rapidly boost production.

“The one thing that struck me is, Oh my God, we just met the whole company and there’s 10 people,” Slaoui said in an interview this month. “Here is this enormous task of making a life-saving drug, the best clinical data I have seen by then, and we need to have a deal strategy.”

Merck is investing to expand manufacturing capacity and increase supply of MK-7110, Nally said, working inside the company and with outside help. He said the treatment is complex and difficult to produce at mass scale.

Merck is also working on a pill-based antiviral therapy for Covid-19 patients at earlier stages of the disease. Known as molnupiravir, it was discovered by scientists at Emory University and is being studied in late-stage trials. Merck and partner Ridgeback Biotherapeutics LP expect to release data early next year and file for regulatory clearance shortly thereafter, Nally said.

The drug is intended to be taken twice a day over five days, for a total of ten capsules. Merck anticipates it will be able to produce more than 20 million courses of the treatment, or 200 million capsules, in 2021, Nally said.

Merck is also looking to make voluntary licenses available to third-party manufacturers.

“You want to stimulate a healthy market for production, especially in those parts of the world with the lowest ability to pay,” he said.

©2020 Bloomberg L.P.

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