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Molecular (MOLN), Novartis Post Positive Data From COVID-19 Drug

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Molecular Partners (MOLN - Free Report) and partner Novartis (NVS - Free Report) reported positive top-line data from a mid-stage study for ensovibep (MP0420), a DARPin (Designed Ankyrin Repeat Protein) antiviral therapeutic for COVID-19. Shares of Molecular Partners surged 30.4% in response to the same.

Both the companies announced that Part A of the EMPATHY clinical study, which compared single intravenous doses of ensovibep versus placebo to treat COVID-19, met the primary endpoint of viral load reduction over eight days.

The EMPATHY study is being conducted by Novartis, with Molecular Partners as a sponsor. The study is a randomized, double-blind, placebo-controlled study in ambulatory (non-hospitalized) adult patients with COVID-19. EMPATHY Part A enrolled 407 patients to identify a dose of ensovibep with optimal safety and efficacy.

The secondary endpoint of hospitalization and/or Emergency Room (ER) visits related to COVID-19, or death showed an overall 78% reduction in risk of events across ensovibep arms compared to placebo. Data also showed that no deaths were observed in the ensovibep treatment arms.

Ensovibep was safe and well-tolerated at all doses (75mg, 225mg and 600mg). The lowest dose of 75mg is the planned dose for further development.

Ensovibep is a multi-specific DARPin, specifically designed to block the receptor-binding domains of SARS-CoV-2 spike protein through highly potent and cooperative binding, making it challenging for escape mutants.

Ensovibep maintains potent in vitro pan-variant activity against all variants of concern identified so far, including Omicron.

The Swiss Pharma giant Novartis confirms it will exercise its option to in-license ensovibep from Molecular Partners. Following the exercise of the option, Novartis plans to seek expedited regulatory authorizations globally – first via the FDA’s Emergency Use Authorization (EUA).

Upon completion of in-licensing, Molecular Partners will receive a milestone payment of CHF150 million and is also entitled to a 22% royalty on sales of ensovibep in commercial territories.  Novartis will become responsible for the development, manufacturing, distribution and commercialization activities of ensovibep.

Given the surge in cases due to the rapid spread of the Omicron variant worldwide, Novartis and Molecular Partners are in close liaison with regulatory bodies to seek expedited review and approval of ensovibep as soon as possible.

Shares of Molecular Partners have gained 9.4% in the past year against the industry’s decline of 31.3%.

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Molecular Partners expects approximately CHF 133 million of cash and cash equivalents on Dec 31, 2021. Upon receipt of the CHF 150 million option exercise milestone from Novartis, Molecular Partners now estimates its cash runway to extend well into 2025, excluding any potential royalty income as well as excluding potential further cash flows to or from R&D partners.

The Omicron variant is creating havoc across the world and pharma/biotech companies are striving to come up with effective treatments to combat the spread.

The FDA recently granted an EUA to Merck’s (MRK - Free Report) and Ridgeback Biotherapeutics’ molnupiravir, an investigational oral antiviral, for the treatment of high-risk adults with mild to moderate COVID-19.

Merck also entered into a procurement agreement with the U.S. Government. It agreed to supply 3.1 million courses of molnupiravir to the U.S. administration upon gaining an EUA from the FDA.

The regulatory body also authorized the emergency use of Pfizer’s (PFE - Free Report) oral antiviral treatment Paxlovid for treating mild-to-moderate COVID-19 in adults and pediatric patients. In November 2021, Pfizer announced an agreement with the U.S. government to supply 10 million treatment courses of Paxlovid, with delivery fulfillment expected to be completed in 2022.

Molecular Partners currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.