FDA approves Merck’s RSV shot for infants, ramping up competition with Sanofi and AstraZeneca

The FDA has approved Merck's Enflonsia, a preventative RSV shot for infants, setting up competition with Sanofi and AstraZeneca's Beyfortus, which experienced supply shortages last season despite generating €1.7 billion in sales. Enflonsia, expected to be available before the next RSV season, demonstrated in trials an over 84% reduction in RSV-related hospitalizations and a 90% decrease in hospitalizations due to lower respiratory infections. Both Enflonsia and Beyfortus are monoclonal antibodies, but target different parts of the virus; Merck highlights Enflonsia's weight-agnostic dosing as a potential advantage.

Analysis

The Food and Drug Administration's approval of Merck's Enflonsia, an RSV preventative shot for infants, introduces a significant new competitor into a market characterized by high unmet demand. Enflonsia is poised to challenge Sanofi and AstraZeneca's Beyfortus, which recorded €1.7 billion ($1.8 billion) in sales last year despite experiencing substantial supply shortages, highlighting a considerable market opportunity for Merck. Enflonsia demonstrated strong efficacy in mid- to late-stage trials, reducing RSV-related hospitalizations by over 84% and hospitalizations due to lower respiratory infections by 90%. Both treatments are monoclonal antibodies, but Merck's Enflonsia offers a potential dosing convenience as it can be administered regardless of an infant's weight, unlike Beyfortus which requires weight-based dosing. Merck intends to begin taking orders for Enflonsia in July, with shipments planned before the RSV season typically begins, aiming to capitalize on the existing demand. This development occurs as Sanofi concurrently announces aggressive measures to increase Beyfortus supply. While other companies like Pfizer, GSK, and Moderna have RSV vaccines, these are currently approved only for adults or pregnant women, with the FDA having paused testing of RSV shots in young children. A pivotal event for the market will be the Centers for Disease Control and Prevention advisory committee meeting from June 25-27, which will formulate recommendations for RSV immunizations.

Key Decisions for Investors

• Investors should assess the potential for Merck (MRK) to capture significant market share with Enflonsia, considering the drug's efficacy, dosing advantage, and the established demand demonstrated by Beyfortus's sales amidst previous supply issues.
• Holders of Sanofi (SNY) and AstraZeneca (AZN) should monitor the competitive impact on Beyfortus's sales and market penetration, factoring in Sanofi's announced efforts to ramp up supply against Merck's new entry.
• All stakeholders in the RSV treatment landscape should closely watch the forthcoming recommendations from the CDC's advisory committee in late June, as these will critically influence the adoption, reimbursement, and overall market dynamics for infant RSV immunizations.