After running into HPV vaccine supply shortfalls throughout 2018 and 2019, Merck & Co. is now reaping the rewards of a more than $1 billion manufacturing investment.
The Gardasil maker has expanded human papillomavirus (HPV) vaccine capacity at its facility in Elkton, Virginia, to the tune of 120,000 square feet and 150 new jobs, Merck said Monday.
The update comes after Merck in 2019 threw down more than $1 billion to tackle “unprecedented global demand for [its] HPV vaccines." At the time, Merck pledged to bolster capacity at existing facilities and build new ones.
Alongside the Elkton upgrade plans in Virginia, Merck said it would spend more than $680 million over five years to build a 225,000-square-foot API plant at its site in Durham, North Carolina, and expand packaging facilities in nearby Wilson.
Now, the Kenilworth, New Jersey-based drugmaker says it’s successfully expanded and “maximized” its existing facilities and nearly doubled its HPV vaccine supply from 2017 to 2020. Looking ahead, Merck expects HPV vaccine supply to double again between 2020 and 2023.
“Increasing supply of our HPV vaccines is a top priority, and over the last several years we have steadily increased our manufacturing capacity in response to growing global demand," Jacks Lee, senior vice president, Merck manufacturing, said in a statement.
Alongside Merck's immuno-oncology superstar Keytruda, its Gardasil vaccine has served as a key growth driver in recent years. In 2020, despite challenges from the pandemic, the shot posted 6% growth at constant exchange rates, generating nearly $4 billion. Sales gained even more steam last year, jumping 39% to $5.7 billion.
But high demand for the shot has also caused shortages. In recent years, Merck has flagged supply disruptions in the U.K. and China, for instance. And in the U.S., the company in 2019 had to borrow doses from the Centers for Disease Control and Prevention's stockpile to meet vaccination demands.
“We expect Gardasil to significantly benefit from increases in productivity across our supply chain, which will allow us to fulfill the demand that we were previously unable to supply,” the company’s human health president Frank Clyburn said on an investor call in July. “These improvements alone will drive very strong sequential and year-over-year growth for Gardasil.”
Merck’s HPV production boost comes as the company slims down in other areas of its business. Last week, Merck said it was laying off 143 Acceleron Pharma employees in Cambridge, Massachusetts.
Separately, Merck is shutting down production at its Cherokee antibiotics manufacturing facility in Danville, Pennsylvania, sometime in 2024 in a move that will ultimately affect some 300 full-time jobs. The layoffs there are set to occur in phases “over a number of years,” the company has said.