Merck, Sanofi hope for sales expansion with two-dose Gardasil switch

Now that the European Commission has officially approved a two-dose Gardasil regimen for early teens, Merck ($MRK) and Sanofi ($SNY)--who market the HPV vaccine in Europe through joint venture Sanofi Pasteur MSD--will see the number of shots per patient fall. But that doesn't mean they'll necessarily take a sales hit, with the move potentially expanding overall access and providing a bump both drugmakers could use.

Merck's Gardasil HPV vaccine--FierceBiotech file photoMerck's Gardasil HPV vaccine

After granting a positive opinion for the new Gardasil schedule in February, the European Medicines Agency last week green-lighted the two-dose plan in children aged 9 to 13 based on a Canadian study showing a comparable immune response to the current three-dose regimen--a move a Sanofi Pasteur MSD spokeswoman told GP "could help to extend HPV vaccine coverage and increase uptake."

While Gardasil and GlaxoSmithKline's ($GSK) rival jab, Cervarix, have racked up billions of dollars in sales, low vaccination rates have put a ceiling on both the revenue and the health benefits their shots can generate. And though studies have shown that factors like vaccine skepticism and a lack of easy-to-understand information have hampered the vaccines' popularity, the costs and challenges associated with administering a three-dose program have also played a role.

The new approval could change some of that. The U.K.'s Joint Committee on Vaccination and Immunisation, for one, has already recommended that the country's National Health Service switch to the new plan, telling GP it could make the Gardasil program more cost-effective. And last month, Dr. George Kassianos, the Royal College of General Practitioners' head of vaccinations, told the publication the money saved would strengthen the case for extending the country's Gardasil program--currently only for girls aged 12 to 13--to include boys as well.

Any increased Gardasil uptake the new approval can bring with it will be welcomed by its marketers, with both pharma giants coming off a difficult 2013. Sanofi's vaccines sales stayed stable at €3.7 billion despite an overall sales dip of 5.7% thanks to continued patent-cliff struggles. For Merck, the complete sales picture was even gloomier, with the New Jersey-based company's top line taking a 6.8% hit last year. But vaccines provided a bright spot, powered by a 12% swell in Gardasil sales.

Merck does have a follow-up to the HPV vax in the works, which is nearing approval and potential blockbuster sales figures. The candidate, dubbed V503, protects against 9 strains of the virus compared with Gardasil's four, and analysts see it raking in $1.9 billion a year at its peak. But those sales may be mostly a wash, however; much of V503's haul will be revenues poached from Gardasil, which Leerink Swann analysts predicted in February would sink to $525 million in yearly sales by 2018.

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