After Merck released the results of its phase 3 clinical trial for molnupiravir, an oral Covid-19 treatment, investors are focusing their attention on how the results will affect related stocks in the Korean market.
Merck is known as MSD outside of the U.S. and Canada.
The phase 3 clinical trial results, published in the New England Journal of Medicine last Thursday, was a double-blind, randomized, placebo-controlled clinical trial with a total of 1433 subjects.
The experimental group (716 patients) received 800 mg of molnupiravir, and the control group (717 patients) received a placebo twice daily for five days. The two groups were similar in most characteristics except for gender imbalance.
The trial's primary endpoint was the hospitalization and mortality rate from all causes for 29 days. The secondary endpoints were World Health Organization’s 11-point WHO clinical progression scale and the symptoms and signs of Covid-19 for 29 days.
As a result of the study, the risk of hospitalization from any cause of death was 7.3 percent in the experimental group, 6.8 percentage points lower than the control group’s 14.1 percent.
Also, the hospitalization and mortality rate up to 29 days after randomization were 6.8 percent for the experimental group and 9.7 percent for the control group.
Based on such positive data, Korean investors' interest is focusing on Merck-related Korean stocks, such as inno.N, GC Cell, and Samsung Biologics.
Interestingly, none of the companies are directly related to Merck's molnupiravir. However, investors pay attention to these companies just because they have a relationship with the multinational giant in partnerships or technology transfer contracts.
For instance, when news outlets reported that Merck applied for emergency use authorization (EUA) for molnupiravir to the U.S. Food and Drug Administration in early October, the stock price of inno.N rose significantly.
inno.N shares rose 20.57 percent from 52,500 won ($44) on Oct. 1 to 66,100 won on Oct. 8. inno.N jointly markets and distributes Merck's vaccine products after forming a cooperative partnership since the beginning of this year.
Some local investors have even classified inno.N as a leading stock related to Merck.
GC Cell, which recently merged with GC Labcell, is also one of Merck's beneficiary stocks thank to their technology transfer agreement.
In January, Artiva Biotherapeutics, a company established through an equity investment of GC Holdings and GC Cell, signed a technology transfer contract with Merck worth $1.8 billion for three types of chimeric antigen receptor-natural killer cells (CAR-NK) therapy products.
Samsung Biologics also has been regarded by investors as a Merck-related stock since it signed a letter of intent on a biopharmaceutical consignment production contract with Merck in September.
On Sept. 29, Samsung Biologics announced the contract manufacturing organization (CMO) deal worth $41.15 million with Merck. However, it has not yet been revealed whether the contract was for manufacturing molnupiravir.
Despite rising interest in Korean stocks related to Merck, some analysts cautioned investors against buying their shares solely based on the clinical trial success of molnupiravir.
"While the success of molnupiravir may serve as a positive factor for the companies, for the time being, the effect may wear off quickly soon as they have no known relationship with molnupiravir," Lee Jun-soo, an analyst for Prophet Asset Management, told Korea Biomedical Review. "Therefore, caution is required when buying shares of such companies."