After showing a 50% reduction in the risk of hospitalization or death, Merck & Co. and Ridgeback Biotherapeutics’ molnupiravir looks on track to secure an FDA emergency use authorization and become a blockbuster earner during the pandemic. But what kind of longer-term market will the drug face once COVID-19 makes the likely shift from pandemic to endemic?
With the increasing number of people vaccinated, COVID-19 is gradually becoming more manageable. Once the public health crisis transitions to the endemic stage, the need for treatment will persist. That will leave a $6 billion global market for oral antivirals, Bernstein analyst Ronny Gal estimates.
Gal used the influenza market as the benchmark for his calculation and incorporated efficacy data from molnupiravir and COVID-19 vaccines. He now projects Merck—as the only company with positive clinical data—will take half of the endemic oral drug market, with Pfizer and Roche potentially sharing the rest if their contenders prove successful.
Molnupiravir’s 50% reduction in hospitalization and death risk came from the MOVe-OUT study in high-risk, unvaccinated adults. That profile description only matches about 15% of the U.S. population, Gal noted. Merck may argue that vaccinated, high-risk patients should also be eligible for molnupiravir, but, given the impressive protection already offered by the vaccine, the drug will have a hard time making that case, Gal said.
However, Pfizer and Roche are running their trials differently, which could open up a broader market for oral antivirals. Pfizer has two studies for PF-07321332, used in combo with AbbVie’s HIV antiviral Norvir. One is similar to MOVe-OUT in high-risk patients to measure reduction in hospitalization or death. The other is in low-risk patients and evaluates alleviation of COVID symptoms as the primary endpoint. By comparison, Roche’s Atea Pharmaceuticals-partnered AT-527 is in phase 3 testing in a broader non-hospitalized population regardless of risk factors, and it’s also using improvement of symptoms as the primary goal.
Using Roche’s newer influenza drug Xofluza as an example, Gal suggested that Pfizer and Roche's symptom alleviation trials have a relatively low efficacy bar to cross and gain approval.
Because vaccination have already significantly lowered hospitalization rate, “we believe the oral antivirals will be used broadly based on symptom alleviation and shortening of disease durations,” Gal wrote in an investor note Wednesday.
In the U.S., influenza causes about 10 million to 15 million medical visits each year, accounting for about 30% of symptomatic cases, and about 80% of them eventually get a script for an antiviral, mostly Roche’s Tamiflu or its generic.
All told, Gal assumed a slightly higher penetration of treatment for COVID than influenza, estimating 40% of all symptomatic COVID infections will be treated with an oral antiviral.
Then the question is the overall number of diagnosed cases. Compared with the high, 90% effectiveness of COVID vaccines, influenza vaccines are much less effective at 40% or below and are adopted less. But the coronavirus is much more infective than influenza. Taking these factors together, Gal’s team figures there would be about 60% as many COVID infections a year as there are flu infections. So that would translate into about 18 million overall COVID cases in the U.S. each year.
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In terms of pricing, Merck already has a deal with the Biden administration to supply 1.7 million courses of molnupiravir to the U.S. government for $1.2 billion. That’s about $700 per course. Merck said it expects to make 10 million courses of the drug by the end of 2021, meaning $7 billion in revenue.
Even though that’s the pandemic price before the data readout, Gal argued that the sticker will likely be kept same for the postpandemic world. As for Roche and Pfizer, Gal expected they will adopt a lower, $300-per-treatment price for their drugs, given they could have broader labels. It would still be a nice price; Xofluza costs about $150 after showing about a one-day improvement in time to symptom relief, Gal noted.
All told, Gal estimates a $6 billion global market for oral antivirals beginning in 2023. Of those, Merck could take away $3 billion, and Roche and Pfizer will split the remainder. Gal assigned the two latecomers lower market share at the moment after adjusting for the risks of failure.