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Will Weak Gardasil Sales Continue to Be a Drag on MRK's Top Line?
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Key Takeaways
Gardasil sales dropped 48% in H1 2025 to $2.45B due to weak demand in China and Japan.
MRK halted Gardasil shipments to China until at least the end of 2025 to reduce high channel inventory.
Other vaccines, including ProQuad, Rotateq and Pneumovax 23, also saw sales decline in H125.
Merck’s (MRK - Free Report) second-largest product Gardasil is a vaccine for the prevention of certain cancers caused by human papillomavirus (HPV). Though the vaccine’s sales were consistently rising till 2022, it started witnessing sluggish sales from 2024.
Gardasil recorded sales worth $2.45 billion during the first half of 2025, down 48% on a year-over-year basis. Gardasil sales have been declining due to weak performance in China, which resulted from sluggish demand trends amid an economic slowdown. Lower demand in China resulted in above-normal channel inventory levels at Merck’s commercialization partner in China, Zhifei.
As a result, Merck decided to temporarily halt shipments of Gardasil in China to allow Zhifei to burn down existing inventory. Merck does not expect to resume shipments to China through at least the end of 2025, extended from the prior expectation of mid-2025.
The ongoing economic headwinds in China led Merck to withdraw its previously issued long-term guidance of generating more than $11 billion in sales from Gardasil by 2030.
Coupled with headwinds in China, Merck is also seeing lower demand for Gardasil in Japan. Sales are expected to remain weak in Japan in the second half of 2025. Our estimates for Gardasil sales suggest a negative CAGR of 15.1% over the next three years.
MRK’s Other Vaccines & Competition in the Space
Besides Gardasil, Merck markets other vaccines like ProQuad/ M-M-R II/Varivax (measles, mumps, rubella and varicella virus vaccine, Vaxneuvance (pneumococcal 15-valent conjugate vaccine), RotaTeq (rotavirus vaccine), Pneumovax 23 (pneumococcal vaccine polyvalent) and its newest jab, Capvaxive (21-valent pneumococcal conjugate vaccine).
Sales of vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined during the first half of 2025.
Meanwhile, Merck’s respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Per management, Enflonsia is the first and only treatment option designed to protect infants with the same dose regardless of weight.
The company is currently gearing up for the successful launch of Enflonsia to help protect infants entering their first RSV season.
However, Enflonsia is likely to face stiff competition from AstraZeneca (AZN - Free Report) /Sanofi’s (SNY - Free Report) RSV antibody Beyfortus, which was also approved for a similar indication in 2023.
In the first half of 2025, the AZN/SNY antibody recorded sales worth €356 million, which rose 79% on a year-over-year basis.
Besides antibodies, some other vaccines have been approved for preventing RSV in certain patients in the United States. These include Pfizer’s Abrysvo, GSK’s Arexvy and Moderna’s mRESVIA.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have lost 15.4% compared with the industry’s decrease of 0.6%. The stock has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 8.98 forward earnings, lower than 14.79 for the industry and its 5-year mean of 12.75.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has increased from $8.87 per share to $8.93, while the same for 2026 has decreased from $9.64 to $9.59 over the past 30 days.
Image: Bigstock
Will Weak Gardasil Sales Continue to Be a Drag on MRK's Top Line?
Key Takeaways
Merck’s (MRK - Free Report) second-largest product Gardasil is a vaccine for the prevention of certain cancers caused by human papillomavirus (HPV). Though the vaccine’s sales were consistently rising till 2022, it started witnessing sluggish sales from 2024.
Gardasil recorded sales worth $2.45 billion during the first half of 2025, down 48% on a year-over-year basis. Gardasil sales have been declining due to weak performance in China, which resulted from sluggish demand trends amid an economic slowdown. Lower demand in China resulted in above-normal channel inventory levels at Merck’s commercialization partner in China, Zhifei.
As a result, Merck decided to temporarily halt shipments of Gardasil in China to allow Zhifei to burn down existing inventory. Merck does not expect to resume shipments to China through at least the end of 2025, extended from the prior expectation of mid-2025.
The ongoing economic headwinds in China led Merck to withdraw its previously issued long-term guidance of generating more than $11 billion in sales from Gardasil by 2030.
Coupled with headwinds in China, Merck is also seeing lower demand for Gardasil in Japan. Sales are expected to remain weak in Japan in the second half of 2025. Our estimates for Gardasil sales suggest a negative CAGR of 15.1% over the next three years.
MRK’s Other Vaccines & Competition in the Space
Besides Gardasil, Merck markets other vaccines like ProQuad/ M-M-R II/Varivax (measles, mumps, rubella and varicella virus vaccine, Vaxneuvance (pneumococcal 15-valent conjugate vaccine), RotaTeq (rotavirus vaccine), Pneumovax 23 (pneumococcal vaccine polyvalent) and its newest jab, Capvaxive (21-valent pneumococcal conjugate vaccine).
Sales of vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined during the first half of 2025.
Meanwhile, Merck’s respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Per management, Enflonsia is the first and only treatment option designed to protect infants with the same dose regardless of weight.
The company is currently gearing up for the successful launch of Enflonsia to help protect infants entering their first RSV season.
However, Enflonsia is likely to face stiff competition from AstraZeneca (AZN - Free Report) /Sanofi’s (SNY - Free Report) RSV antibody Beyfortus, which was also approved for a similar indication in 2023.
In the first half of 2025, the AZN/SNY antibody recorded sales worth €356 million, which rose 79% on a year-over-year basis.
Besides antibodies, some other vaccines have been approved for preventing RSV in certain patients in the United States. These include Pfizer’s Abrysvo, GSK’s Arexvy and Moderna’s mRESVIA.
MRK's Price Performance, Valuation and Estimates
Year to date, shares of Merck have lost 15.4% compared with the industry’s decrease of 0.6%. The stock has also underperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, Merck appears attractive relative to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 8.98 forward earnings, lower than 14.79 for the industry and its 5-year mean of 12.75.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has increased from $8.87 per share to $8.93, while the same for 2026 has decreased from $9.64 to $9.59 over the past 30 days.
Image Source: Zacks Investment Research
MRK's Zacks Rank
Merck currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.