18 Jul

How Merck’s Vaccine Portfolios Are Expected to Perform in 2017

WRITTEN BY Daniel Collins

Zostavax’s revenue trends

In 2016, Merck’s (MRK) Zostavax reported revenues of around $685 million, which reflected an ~9% decline year-over-year (or YoY). The company estimated that the drug’s revenues were impacted negatively by around 1% due to the unfavorable effect of foreign exchange. The lower sales volume in the US also affected the drug’s revenues. However, the company witnessed increasing demand for Zostavax in emerging markets.

In 1Q17, Zostavax generated revenues of around $154 million, which reflected an ~23% growth on a YoY basis and a 30% decline on a quarter-over-quarter basis. The vaccine witnessed growing demand in the Asia-Pacific region. Zostavax is a live attenuated viral vaccine designated for the prevention of herpes zoster in people aged 50 years and older. The chart below represents the revenue trajectory of Merck’s RotaTeq, Pneumovax 23, and Zostavax.

How Merck’s Vaccine Portfolios Are Expected to Perform in 2017

RotaTeq’s revenue trends

RotaTeq is a vaccine for the prevention of gastroenteritis in infants and children. In 2016, RotaTeq reported revenues of ~$652 million, which reflected ~7% growth YoY. The purchasing from the public sector in the US and the increase in sales volume in emerging economies contributed to the revenue growth in 2016.

In 1Q17, RotaTeq reported revenues of around $224 million, which reflected ~19% growth on a YoY basis and 38% growth quarter-over-quarter. The termination of the collaboration with Sanofi, public sector purchases in the US, and high demand in Europe contributed to its revenue growth in 1Q17.

Pneumovax 23‘s revenue trends

Pneumovax 23 is a vaccine used for the prevention of pneumococcal diseases. In 2016, Pneumovax reported revenues of ~$641 million, which represents ~18% YoY growth. High sales volume, favorable pricing in the US, and increasing demand in some emerging economies contributed to the revenue growth.

In 1Q17, the vaccine generated revenues of ~$163 million, which represents ~52% YoY growth. Pneumovax sales growth in the US and Japan due to increasing demand contributed to the high revenue growth in 1Q17.

Merck’s peers in the vaccine market include Pfizer (PFE), Sanofi, AstraZeneca (AZN), GlaxoSmithKline (GSK), and Emergent BioSolutions. Merck’s vaccine sales growth could boost the Health Care Select Sector SPDR ETF (XLV).

Merck comprises ~5.7% of XLV’s total portfolio holdings. Pfizer, one of Merck’s peers in the vaccines market, comprises ~6.6% of XLV’s total portfolio holdings.

Latest articles

US crude oil production has more than doubled since 2009 and grew by 1.1% over the last year. Currently, there are 133 operable refineries in the US.

The cannabis industry is fighting against the ongoing US-China trade war and recessionary worries, which have hurt valuations across the global market.

Higher revenues, increased ticket prices, and lower fuel costs are likely to drive American Airlines' Q3 earnings higher despite its Boeing MAX woes.

HEXO plans to report its Q4 earnings before the market opens on October 24. October has been tough for Hexo, with its stock falling 31.2% as of October 18.

Today, Advanced Micro Devices (AMD) rose 4% to over $32, making it one of the top Nasdaq gainers. Morgan Stanley raised its price target for AMD stock.

Early in 2019, President Donald Trump warned that China could overtake the US as a global power. He vowed that this would not happen under his leadership.