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A Look into the Performance of Merck’s Vaccine Portfolio in 3Q17

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Gardasil revenue

In 3Q17, Merck’s (MRK) Gardasil and Gardasil 9 generated revenue of $675 million, which reflected a ~22% fall YoY (year-over-year) and ~44% growth QoQ (quarter-over-quarter). Lower sales in the US market primarily led to the fall in Gardasil revenue between 3Q16 and 3Q17.

In 3Q17, Merck opted to borrow Gardasil 9 doses from the CDC’s (Centers for Disease Control and Prevention) pediatric vaccine stockpile. It borrowed the doses due to the temporary shutdown related to cyberattacks in June and higher-than-expected demand. Merck reversed the sales associated with the borrowed doses, which led to a ~$240 million revenue reduction.

Gardasil is used as a prophylaxis against cervical, vulvar, vaginal, and anal cancer due to human papillomavirus (or HPV) types 16, 18, 31, 33, 45, 52, and 58. GlaxoSmithKline’s (GSK) Cervarix is used to prevent cervical cancer caused by HPV types 16 and 18.

ProQuad, M-M-R II, and Varivax revenue

In 3Q17, ProQuad, M-M-R II, and Varivax reported revenue of $519 million, which reflected 5% growth YoY and 30% growth QoQ. It generated revenue of $169 million, compared with $150 million in 3Q16. Higher pricing in the United States and growth in international sales volumes primarily contributed to the revenue growth. During the first nine months of 2017, ProQuad reported revenue of $402 million, compared with $389 million in the same period of 2016.

In 3Q17, Merck’s M-M-R II reported revenue of ~$124 million, compared with $115 million in 3Q16, primarily due to international sales volume growth. In September 2017, M-M-R II reported year-to-date (or YTD) revenue of $303 million, compared with $269 million YTD in September 2016.

In 3Q17, Merck’s Varivax reported revenue of $226 million, compared with $232 million in 3Q16. In September 2017, Varivax reported revenue of ~$568 million YTD, compared with $578 million YTD in September 2016.

RotaTeq revenue

In 3Q17, RotaTeq reported revenue of $179 million, which is ~5% growth YoY and ~46% growth QoQ. In September 2017, RotaTeq reported revenue of $525 million YTD, which reflected ~7% growth YoY. RotaTeq competes with GlaxoSmithKline’s Rotarix.

Pneumovax 23 revenue

In 3Q17, Pneumovax reported revenue of $229 million, which is ~31% growth YoY and 38% growth QoQ. In September 2017, Pneumovax reported revenue of $558 million YTD, which reflected ~38% growth YoY. Sales volume growth and higher US and Europe pricing primarily contributed to the revenue growth in both periods.

Zostavax revenue

In 3Q17, Zostavax reported revenue of $234 million, which is ~23% growth YoY and ~46% growth QoQ. In September 2017, Zostavax reported revenue of $547 million YTD, which is ~18% growth YoY. Vaccine players Merck, GlaxoSmithKline, Pfizer (PFE), and Sanofi (SNY) make up ~4.4%, ~4.4%, 5.3%, and 4.6% of the VanEck Vectors Pharmaceutical ETF’s (PPH) total portfolio, respectively.

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