Gardasil Is Driving Merck’s Vaccine Business


Nov. 12 2015, Updated 10:07 a.m. ET

Gardasil franchise

The Gardasil franchise is Merck & Co.’s (MRK) leading vaccine franchise. Gardasil is a vaccine that prevents certain strains of HPV (human papillomavirus). The disease is transmitted sexually. For the Gardasil franchise, the total sales during 3Q15 were $625 million—a rise of ~6% over 3Q14.

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Why is the Gardasil franchise important?

Gardasil is used to prevent certain HPV strains that are responsible for causing ~70% of cervical cancers. It also prevents most HPV-induced cancers including anal, vulvar, vaginal, and penile cancer cases in additional to genital warts.

Gardasil 9 accounted for ~80% of the total HPV sales in the US during 3Q15. The combined sales of Gardasil and Gardasil 9 reported 7% growth during 3Q15. The strong performance and presence of Gardasil 9 in the US represents Merck’s strength in securing managed care access. It also shows customers’ transition to the 9-valent vaccine.

Gardasil’s contribution

Gardasil accounted for ~6.2% of Merck’s total revenue during 3Q15. This is ~0.5% higher compared to its contribution in 3Q14. The revenue contribution of the Gardasil franchise is estimated to rise by 0.3% to ~3.7% of the total revenue during 4Q15. It’s expected to rise by ~0.7% to ~4.3% in 1Q16. This shows a positive trend for Gardasil.

Merck’s overall vaccines business 

Overall, the vaccines sales were ~$1.6 billion during 3Q15—a fall of ~3% over 3Q14. The growth of the Gardasil franchise was more than offset by the fall in the revenue of ProQuad and competitive pressure for Pneumovax.

Other vaccines include Zostavax and RotaTeq. Merck competes with Pfizer (PFE) and GlaxoSmithKline (GSK) for vaccines. GlaxoSmithKline acquired Novartis’ (NVS) vaccine business. Investors can consider ETFs like the VanEck Vectors Pharmaceutical ETF (PPH) or the Vanguard Healthcare ETF (VHT) to divest the risk.


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