After $356M in Federal Funds in Dec, Merck Secures $1.2B Federal Commitment to Buy its Experimental Drug Upon Key Milestones

After $356M in Federal Funds in Dec, Merck Secures $1.2B Federal Commitment to Buy its Experimental Drug Upon Key Milestones

Another brilliant corporate showcasing enterprising business prowess or yet another example of crony capitalism on display for the world to see? That’s the question many are asking as Merck continues to progress its agenda to finally monetize the pandemic with an experimental drug that’s been around for many years. The company just announced it secured a $1.2 billion public commitment for up to $1.7 million courses of its still experimental antiviral drug Molnupiravir to the United States government. Merck already secured $356 million of taxpayer money for another COVID-19 drug that they subsequently shelved. Perhaps this explains why Merck went on the aggressive against the ivermectin generic alternative currently under investigation by the U.S. government as well in the ACTIV 6 program.  The U.S. government has agreed to pay about $705 per course should Merck successfully progress the drug through Phase 3 and to an emergency use authorization (EUA) or regulatory approval milestone. Merck, along with Roche, Pfizer, and a few others, continue their quest to capture what is a highly lucrative COVID-19 early-onset, mild-to-moderate symptom antiviral treatment market. All learned from Gilead that those pharmaceutical companies that could effectively secure key milestones could generate billions. Gilead alone turned over $3 billion in the first nine months of the pandemic with a product that’s efficacy and safety are negligible at best. But much has transpired since the beginning of the pandemic, and a lot of information is now available about lower-cost, generic repurposed options showing significant promise. That competition had to be ruthlessly cleared from the field.   

A Big Market

In “The Emerging COVID-19 Therapy Market for Early-Onset Non-Hospitalized Patients: Three Segments to Watch,” TrialSite offered a framework for understanding the pursuit of various companies targeting what is a substantially large market targeting the vast majority of COVID-19 cases: the 90% of cases that are essentially either asymptomatic or mild-to-moderate in nature where an orally administered antiviral can help reduce disease progression, including lowering of mortality. Merck’s main competition in this race includes Roche, which partnered recently with Atea Pharmaceuticals for a drug known as AT-527.

The Swiss-based company paid Atea $350 million for the rights of an antiviral drug now known as AT-527. The two conducted a Phase 2 trial (NCT04709835) in 220 non-hospitalized COVID-19 patients during February 2021. The study is scheduled to run through until this June (2021). The sponsors are running a small safety and “bronchopulmonary” study (NCT048777) of the drug in the UK. 

Interestingly, Roche and Atea both are running a Phase 3 clinical trial (NCT04889040) known as the MORNINGSKY across several nations in Latin America, Europe, South Africa, and Turkey, targeting low-to middle-income market segments. This study evaluates the effects of AT-527 in non-hospitalized adult and adolescent participants with mild to moderate COVID-19. This study is scheduled for August 2021.

Based in the biotech capital of America (Boston), Atea Pharmaceuticals was formed in 2014 and is now publicly traded. If the Phase 2 and 3 studies go well, it’s undoubtedly an acquisition target.

Pfizer is minting money now with its mRNA-based vaccine licensed from BioNTech and is going back for more targeting of this lucrative COVID-19 ambulatory care market. Early on in the pandemic, Pfizer organized many of its scientists and chemists to get together, brainstorm, and collaborate to target potential treatments for COVID-19. Like other companies, they recognized the market would demand a pill that could be used to stop the SARS-CoV-2 infection from advancing to later stages. 

One that a physician would prescribe in an ambulatory or outpatient setting. Pfizer’s teams ultimately converged on a protease inhibitor, which blocks enzymes and thus SARS-CoV-2’s ability to replicate. A similar concept is employed targeting HIV and hepatitis C both via monotherapy or in combination with other drugs such as antivirals. On March 25, TrialSite announced Pfizer initiated a Phase 1 clinical trial  (NCT04756531) investigating the oral antiviral PF-07321332. That study’s scheduled to close this month. Merck and Roche are ahead of Pfizer at this point.

Crony Capitalism or the Status Quo?

TrialSite’s known that Merck’s sought to tap into and capture the $3+ billion per annum early-onset COVID-19 market—and that number could ring higher as well. But we must remember that in “Merck’s Incredible Quest for the COVID-19 Blockbuster: A Tainted Path to Early Onset Mild-to-moderate COVID-19 Therapy,” TrialSite shared that the drug known as molnupiravir, first with Ridgeback Biotherapeutics but originally developed at Emory University, was at the center of a whistleblower controversy associated with the U.S. government. A civil servant insider with an ax to grind challenged the ever-growing handouts of money from the previous POTUS’ Operation Warp Speed initiative. 

The public trough, however, still appears open under the current POTUS as they’ve been able to secure that sizeable commitment for a fairly high price, especially when compared to generic drug prices. Again, Merck’s already received a $356 million payment from the government just in December of 2020. Funds for EIDD-2801 were rejected before by BARDA for a prior $300 million request. More on that story can be reviewed in an edition of Science back in May 2020 titled, “Emails offer look into whistleblower charges of cronyism behind potential COVID-19 drug.” 


In that Science article, concerns were expressed early on about the drug. For example, an Emory chemist named Raymond Schinazi who studied the active ingredient in Molnupiravir fretted that his former company called Pharmasset abandoned any development due to the discovery of mutagenic properties. Now, according to the Science article, Schinazi shared that the “small chemical tweaks made to increase the ingredient’s bioavailability and transform it into EIDD-2801 (now molnupiravir) are unlikely to change its mutagenicity.” According to Schinazi, “Thank goodness someone is raising the red flag about EIDD-2801” the chemist was quoted, declaring, “You don’t develop a drug that’s mutagenic. Period.”

This story hinted of what amounts to claims of scientific crony capitalism in the last POTUS administration.

But Merck shared in their most recent press release that they need the money because they are at risk with this particular drug. But are they? Again, the company was given $356 million in taxpayer money just at the end of 2020 in association with the development of a company it announced it would acquire for $425 million in November 2020 (OncoImmune). But interestingly, they quickly stopped any development of that biotech’s drug called MK-7110 yet it’s not clear if the public funding was applicable to the Ridgeback drug (Molnupiravir). Now perhaps Merck gave the $356 million back to the feds or contributed it to a health charity. If that’s the case, then they get public kudos.

Clearing Away the Low Cost Competition

TrialSite reported on Merck’s bashing of its own product, ivermectin, (Stromectol) declaring that there’s absolutely no evidence that any studies show any efficacy. That’s despite the fact that 58 studies now show overwhelmingly positive data signals.  

Moreover, in a recent TrialSite Op-ed, a concerned Pennsylvania-based physician writes that the company helped finance an obscure trial site in Colombia, the one that conducted the questionable study showing the ivermectin produced negligible results. Are there any connections here?  Why was Merck giving this small clinic money—the one conducting what has become a very controversial ivermectin study with a considerable indication of conflict of interest?

It’s A System in Need of Reform?

TrialSite reminds all that Merck’s brand could have been universally celebrated during this pandemic. Imagine if it would have embraced ivermectin and offered a deal to the world—a low-cost treatment guarantee. The company could literally be the star pharmaceutical company of the century. But TrialSite, in Merck’s defense, reminds all that shareholders for the most part don’t care about humanitarian contribution; rather, they seek a cold, hard monetary return. Merck’s executives still don’t have too many options but to play the game. TrialSite suggests that while there’s increasing evidence of an urgent need for massive reform across public health and human services agencies, regulators, and industry, the underlying logic of the market system drives ruthless competition and returns at nearly any cost. Those that don’t generate continuous growth and substantial returns for shareholders are punished—period. With the pandemic, a feeding frenzy for public funding goes hand in hand with competition now as well. Gilead’s masterful moves early on are still the subject of envy while the vaccine winners generate tens of billions.

The Agreement

Through the agreement, if molnupiravir receives Emergency Use Authorization (EUA) or approval by the U.S. Food and Drug Administration (FDA), Merck will receive approximately $1.2 billion to supply approximately 1.7 million courses of Molnupiravir to the United States government, which comes out to about $705 per course. Again, Merck reports it’s been investing at risk to support the development and scale-up production of Molnupiravir and expects to have more than 10 million courses of therapy available by the end of 2021. 

But again, the company doesn’t share in the press release that it received $356 million already of taxpayer money for existing COVID-19 drug development efforts just in December of 2020. 

So this procurement of molnupiravir will be supported in whole or in part with federal funds from the Department of Health and Human Services; Office of the Assistant Secretary for Preparedness and Response; Biomedical Advanced Research and Development Authority, in collaboration with the DOD Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense, (JPEO-CBRND) under contract number W911QY21C0031. As mentioned above, a whistleblower in the U.S. government had previously rejected a taxpayer-based handout for this particular drug but with new faces and a compelling story, the tap’s turned back on. 

Outside the USA

Merck also plans to submit applications for emergency use or approval to regulatory bodies outside of the U.S. and is currently in discussions with other countries interested in advance purchase agreements for molnupiravir.  Facing fierce competition against Roche, Merck’s positioned to work to offer access to the investigational product globally, seeking a tiered pricing approach based on World Bank data that recognizes countries’ relative ability to finance their public health response to the pandemic. 

As TrialSite reported recently, the drug is currently under study in the Philippines and elsewhere, and again the great American pharmaceutical company is head to head in a competitive battle against Roche and, to a lesser extent, Pfizer.  

Their ivermectin competition has been wiped out by a convenient consortium, or more like a cabal of industry and government inclusive of the FDA, NIH, World Health Organization and EMA—even India’s health and welfare agency felt the global heat recently and took ivermectin off the national guidance list despite substantial contribution to battles against COVID-19 in places like Uttar Pradesh. 

With the markets cleared, Merck proceeds to ink deals with local generic producers in countries like India to expand local access in low- and middle-income countries (LMICs) following approvals or emergency authorization by local regulatory agencies. Again, there could have been a vastly different story if they would have embraced their generic option but, as mentioned, shareholders would have probably punished those in charge. 

What is Molnupiravir?

Merck recently shared in their press release a description of the investigational product. Science writer Bethany Halford writes a comprehensive background of the drug’s history last year in Chemical & Engineering News.

An experimental, orally bioavailable form of a ribonucleoside analog that helps inhibit the replication of multiple RNA viruses including SARS-CoV-2, the causative agent of COVID-19, Molnupiravir (EIDD-2801/MK-4482) is known to be active in several models of SARS-CoV-2, including for prophylaxis, treatment, and prevention of transmission, as well as SARS-CoV-1 and MERS. 

Again the investigational product was invented at Drug Innovations at Emory (DRIVE), LLC, a not-for-profit biotechnology company wholly owned by Emory University, and with partial funding support from the U.S. government. Since being licensed by Ridgeback, all funds used for the development of EIDD-2801 by Ridgeback have been provided by Wayne and Wendy Holman and Merck. Although, as the TrialSite mentioned at the end of last year, Merck received a payment of $356 million from the U.S. government, and it’s not clear if those funds were used for any of the EIDD-2801 activity or not.

The Pivotal Study

The Phase 3 portion (Part 2) of the MOVe-OUT study, evaluating the potential of molnupiravir to reduce the risk of hospitalization or death, is ongoing. Merck currently anticipates that, pending favorable results from MOVe-OUT, the earliest possible submission for an Emergency Use Authorization for molnupiravir will be in the second half of 2021. TrialSite reported that this study concluded in August 2021. Merck shared in their press release that the company and partner Ridgeback Biotherapeutics plan to share further findings from the ongoing molnupiravir development program with regulatory agencies as they become available. 

Call to Action: Want to know more about Merck’s study? See the linkTrialSite continues to monitor the study.

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