As mild as Omicron is, the media will continue spreading fear about Covid. Health organizations are already encouraging everyone to take a third booster shot. Fortunately, hospitalization and fatality rates from Omicron are low. Since this could hurt sales of Covid vaccines in the near term, investors should look at anti-viral pill suppliers instead.
Last week, the Food and Drug Administration approved Merck’s (MRK) molnupiravir. Merck developed the drug with Ridgeback Biotherapeutics. The emergency use authorization will accelerate Merck’s revenue growth in 2022. Expect the firm to sell up to $7 billion of the antiviral next year. To minimize hospitalization rates, doctors have another weapon available in fighting the pandemic.
Governments may shift their measure of the pandemic from daily infection rates to reporting hospitalization rates. With Merck’s antiviral, hospitals will have another treatment option for patients.
Pfizer (PFE), which enjoyed the best stock rally in decades, won the FDA’s EUA authorization for its Covid pill. Expect the oral treatment, called Paxlovid, to lift Pfizer’s 2022 results. The company will produce 120 million courses. Given Pavlovid indicated an 89% reduction in the risks of hospitalization or death, investors should continue holding PFE stock.