While Merck's oncology powerhouse Keytruda delivered another multibillion-dollar sales haul in the third quarter, regional fright surrounding another staple product took the spotlight during the company's earnings conference call.
Worldwide, the company’s Gardasil franchise saw sales (PDF) slide 11% compared with last year to $2.3 billion. Merck attributed the decline to lower demand in China, which offset double-digit growth across “almost every other region,” CEO Robert Davis noted on the drugmaker’s third-quarter call Thursday.
Merck's inventory shipments to its commercialization partner in China declined during the period, and the same level of shipments is expected for the fourth quarter, the company said. Still, the drugmaker is “making progress” on improving patient education and boosting promotional resources in the country, Davis said.
“We’re going to make progress, we are making progress, but it’s going to take some time,” the CEO said.
The Gardasil franchise is the company's second largest sales driver behind Keytruda, and Merck remains steadfast it can garner more than $11 billion from the key product in 2030. Fewer than 10% of eligible people worldwide have received the vaccine, and a “wide range of long-term growth opportunities” exist in China and around the world, according to Davis.
Despite the global growth opportunities, Merck executives cautioned that China revenue for the product will likely decline again in 2025.
“What I’m trying to make sure everyone hears is this isn’t going to be solved next quarter,” Davis emphasized.
Meanwhile, in the U.S., the company’s pneumococcal conjugate vaccine Capvaxive recently scored a key recommendation from the Centers for Disease Control and Prevention’s (CDC's) vaccine advisory group to expand its use to all adults aged 50 and older, compared to a previous endorsement for people 65 and older. About120 million people in the U.S. are over the age of 50, with 60 million between the ages of 50 to 64, making the new recommendation a “tremendous opportunity,” Chief Financial Officer Caroline Litchfield noted.
That vaccine goes up against Pfizer’s Prevnar 20, which also got the CDC go-ahead for the 50-and-older population. However, Merck’s offering has a leg up as it's the only pneumococcal disease vaccine that was specifically designed to product adults 50 and older with 21 serotypes that account for 84% of the disease found in that population, according to Merck.
Based on the updated recommendation, Leerink Partners analysts previously projected Merck's shot can capture an extra $700 million in U.S. revenue in 2026.
Despite Merck’s Gardasil woes, Keytruda kept the company's growth ambitions afloat with a whopping $7.4 billion in quarterly sales. The company picked up a total haul of $16.6 billion during the quarter, good for 4% growth versus the same period in 2023.