India's Everest Organics Ltd (EVER.BO) said on Tuesday it had started making the active pharmaceutical ingredient (API) for a generic version of Merck & Co's (MRK.N) experimental antiviral drug molnupiravir to treat mild to moderate COVID-19.

According to Reuters, shares of Everest Organics jumped as much as 11.6% after the news came in, and were last up 9.9% at 330 rupees in a weak Mumbai market.

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The Indian bulk drugs manufacturer joins Divi's Laboratories Ltd (DIVI.NS) as an API maker for Merck's experimental oral drug.

Merck has separately entered into voluntary licensing agreements with at least eight Indian generic drugmakers for molnupiravir, with an aim to turn the country into a manufacturing hub for the drug.

"After the successful development and commercialisation of various COVID-19 drugs such as Oseltamivir, Remdesivir... Everest Organics is on its path of expansion of this portfolio," Chief Executive Officer Srikakarlapudi Sirisha said in a statement.

Merck said on Monday it had sought U.S. emergency use authorisation for the drug, putting molnupiravir on course to become the first oral antiviral medication for COVID-19.

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The U.S. authorisation application was based on data released earlier this month by Merck and partner Ridgeback Biotherapeutics.

The data showed molnupiravir nearly halved the risk of hospitalisation or death in at-risk non-hospitalised patients with mild-to-moderate COVID-19.