3 stocks that could skyrocket with COVID pills

On Friday, we saw a massive sell-off in stocks of COVID vaccines. Novavax (NASDAQ: NVAX) fell 12%, and shares of Modern (NASDAQ: mRNA) fell 11%. Meanwhile, another health sector was skyrocketing: inventories of oral treatments for COVID.

Actions of Merck (NYSE: MRK) increased by 9%, and Atea Pharma (NASDAQ: AVIR) flew 20% higher. Actions of Pfizer (NYSE: PFE) barely budged for the day, possibly because the megacap has both a vaccine and oral therapy in the works. Read on to find out why our trio of fools like Pfizer, Atea and Merck in the war on COVID.

1. Pfizer: The next phase of the pandemic

George Budwell: Pfizer plans to achieve $ 33.5 billion in COVID-19 vaccine sales in 2021. Still, the pharmaceutical giant may already have its next mega-rockbuster coronavirus therapy on hand. Pfizer is currently testing an oral antiviral drug, known as PF-07321332, as a treatment for various types of COVID-19 patients. The medicine is said to work by preventing the virus from replicating itself.

Merck’s oral antiviral candidate, known as molnupiravir, released exceptional late-stage results last Friday, although this drug works by a different mechanism than Pfizer’s candidate. Currently, PF-07321332 lags a little behind Merck’s oral medications from a development perspective. But it could produce crucial milestone data as early as next month. If this is true, the first round of oral COVID drugs could be on the U.S. market by perhaps the end of the first quarter of 2022.

What is the problem for Pfizer and its shareholders? With the number of unvaccinated patients in the US and overseas slowly but steadily declining, Pfizer’s best-selling vaccine will eventually decline in sales. In fact, the drugmaker’s COVID-19 vaccine is likely very close to its peak in trade right now. A pill that effectively improves symptoms associated with COVID-19 should ease the financial blow to vaccine makers like Pfizer, and perhaps even prove to be a long-lasting source of income. Therefore, Pfizer’s stock could prepare for a strong run if PF-07321332 does indeed succeed.

2. Pills versus injections make Atea a winner

Taylor carmichael: It was irrational to slam vaccine stocks on Friday. Compared to COVID treatments, the timeliness of the vaccine market is astronomical. Billions of people will be vaccinated.

However, Atea’s treatment could save lives. A significant number of people have not been vaccinated and may never get it. And even vaccinated people could catch a mutant strain of the virus. There is therefore still a market for COVID treatments. And it could actually be a big market, as governments around the world want to stockpile treatments in advance. A few weeks ago, the Biden administration paid $ 2.9 billion to Regenerate (NASDAQ: REGN) to acquire 1.4 million doses of its antibody treatment, REGEN-COV.

Atea’s COVID drug candidate, AT-527, is not an antibody but an RNA inhibitor that prevents viral replication early in infection. And what’s exciting about Mr. Market is that this is an oral treatment. These pills are a very big market opportunity. You can avoid hospitalization and take them home.

We are still awaiting data from Atea’s pivotal trial. The company collaborates with the pharmaceutical giant rock (OTC: RHHBY). Right now, Merck is leading the way, reporting positive Phase 3 data from its oral COVID treatment on Friday. And Pfizer will also take market share if its oral treatment is approved.

Why buy Atea shares? Merck is a $ 200 billion company and Pfizer is a $ 240 billion pharmaceutical giant. Atea is a small company with a market capitalization of $ 3 billion. The benefit is incredibly large for a small cap with COVID treatment. The key question, of course, is whether the drug works. We will find out in a few months.

3. The story of the $ 206 billion growth

Patrick Bafuma: Merck recently made investors happy. The $ 206 billion drug company gained about $ 16 billion in market capitalization, or about 8.4% of the share price, after a press release about its treatment for COVID-19 last week.

Merck’s antiviral pill, molnupiravir, was found to reduce the risk of hospitalization or death compared to placebo by just under half – 14.1% vs. 7.3% – 29 days after treatment. randomization. With around 380 patients in each arm of the trial, surprisingly, no deaths were reported in patients who received molnupiravir, compared with eight deaths in patients who received placebo. Molnupiravir demonstrated consistent efficacy against several viral variants, including delta, gamma, and mu, which accounted for nearly 80% of the evaluable cases in the trial. All signs at present suggest that these data are broadly applicable to the general population and that molnupiravir is dramatically decreasing hospitalizations and, more importantly, mortality from COVID-19.

In a continuing wave of positive news, American patients may not have to worry about its cost. According to The New York TimesUncle Sam’s plan is to provide the treatment for free to the American population, just like the vaccines. And the U.S. government has already ordered 1.7 million treatments at about $ 700 per course, or roughly $ 1.19 billion. Merck expects to be able to produce nearly six times that number, with the capacity to produce up to 10 million courses by the end of this year. With those kinds of estimates, it’s entirely possible that molnupiravir could bring in more than $ 5 billion in the fourth quarter alone.

The holiday season can be even more fruitful for Merck than this rosy prospect. The Transportation Security Administration has regularly seen more than 2 million people travel on an airplane in the United States every day. However, despite only about a third of usual vacation travel in 2020, COVID has increased further. Although we currently have vaccines, we are at about 75% to 80% of travel levels before the pandemic. This means airports that are much busier than the 2020 holiday season, and with the potential for declining immunity, it is difficult to see how molnupiravir will not be distributed like candy canes, even potentially off-label for preventive means. To that extent, I should note that Merck has a Phase 3 study evaluating molnupiravir as a prophylactic option, or “just in case I was exposed”, with a readout of data in the first half of 2022.

In its latest quarterly report, Merck raised its revenue forecast for the year to $ 46.4 billion to $ 47.4 billion, an increase of 12 to 14 percent. Add to that what could easily be $ 8-10 billion a year in molnupiravir sales, and not only is its 3.1% dividend secure, but it also gives Merck plenty of money for potential buybacks. I believe the success of molnupiravir will cement the company as the foundation of portfolios for years to come.