By Matt Grossman

Merck KGaA has cleared its investigational new drug application with the U.S. Food and Drug Administration in the development of a drug it said could treat pneumonia associated with Covid-19, the company said Thursday.

Merck, based in Darmstadt, Germany, will begin a Phase 2 study of the drug, M5049, which Merck said may block immune sensors that detect genetic material from the new coronavirus.

The goal is to help control the immune response to the virus, which if left unchecked can overreact and cause severe secondary problems in some patients, Merck said.

The study will take place in the U.S. and Brazil, with 150 patients split into three groups that will receive either a placebo, or one of two M5049 dose levels. The drug has already completed a Phase 1 study in healthy volunteers.

Write to Matt Grossman at matt.grossman@wsj.com