We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Declining Gardasil Sales Ail MRK's Top Line in Q3 Earnings?
Read MoreHide Full Article
Key Takeaways
Gardasil sales plunged 48% year over year to $2.45 billion during the first half of 2025.
Merck halted Gardasil shipments to China until at least 2025-end amid excess partner inventory.
Economic weakness in China and soft demand in Japan weigh on Gardasil's sales outlook.
Merck (MRK - Free Report) is facing persistent challenges for its second-largest product, Gardasil, which is a vaccine for the prevention of certain cancers caused by human papillomavirus. Though the vaccine’s sales rose consistently till 2022, it started witnessing sluggish sales from 2024.
During the first half of 2025, Gardasil sales declined 48% on a year-over-year basis to $2.45 billion. Sales of Gardasil are 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.
Accordingly, 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.
Gardasil sales are expected to decline significantly in 2025 from 2024 levels.
Merck is also seeing lower demand for Gardasil in Japan. Management expects Gardasil sales to remain weak in China as well as Japan in the third and fourth quarters 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 Target Market
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 other vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined during the first half of 2025.
Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Merck is currently gearing up to launch Enflonsia to help protect infants entering their first RSV season.
Per management, Enflonsia is the first and only treatment option designed to protect infants with the same dose regardless of weight.
However, Enflonsia is likely to face stiff competition from AstraZeneca (AZN - Free Report) /Sanofi’s (SNY - Free Report) RSV antibody Beyfortus, which was approved for a similar indication in 2023.
AstraZeneca records a 50% share of gross profits on sales of Beyfortus in major markets outside the United States and 25% of brand revenues in the rest of the world markets received from partner Sanofi as Alliance revenues.
Beyfortus achieved blockbuster status in its first full year of sales in 2024.
Besides antibodies, some 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 declined 15.8% against the industry’s rise of 5.6%. 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 8.97 forward earnings, lower than 15.62 for the industry and its 5-year mean of 12.64.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has decreased from $8.94 per share to $8.92, while the same for 2026 has decreased from $9.55 to $9.44 over the past 60 days.
Image: Bigstock
Will Declining Gardasil Sales Ail MRK's Top Line in Q3 Earnings?
Key Takeaways
Merck (MRK - Free Report) is facing persistent challenges for its second-largest product, Gardasil, which is a vaccine for the prevention of certain cancers caused by human papillomavirus. Though the vaccine’s sales rose consistently till 2022, it started witnessing sluggish sales from 2024.
During the first half of 2025, Gardasil sales declined 48% on a year-over-year basis to $2.45 billion. Sales of Gardasil are 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.
Accordingly, 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.
Gardasil sales are expected to decline significantly in 2025 from 2024 levels.
Merck is also seeing lower demand for Gardasil in Japan. Management expects Gardasil sales to remain weak in China as well as Japan in the third and fourth quarters 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 Target Market
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 other vaccines like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23 also declined during the first half of 2025.
Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. Merck is currently gearing up to launch Enflonsia to help protect infants entering their first RSV season.
Per management, Enflonsia is the first and only treatment option designed to protect infants with the same dose regardless of weight.
However, Enflonsia is likely to face stiff competition from AstraZeneca (AZN - Free Report) /Sanofi’s (SNY - Free Report) RSV antibody Beyfortus, which was approved for a similar indication in 2023.
AstraZeneca records a 50% share of gross profits on sales of Beyfortus in major markets outside the United States and 25% of brand revenues in the rest of the world markets received from partner Sanofi as Alliance revenues.
Beyfortus achieved blockbuster status in its first full year of sales in 2024.
Besides antibodies, some 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 declined 15.8% against the industry’s rise of 5.6%. 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 8.97 forward earnings, lower than 15.62 for the industry and its 5-year mean of 12.64.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has decreased from $8.94 per share to $8.92, while the same for 2026 has decreased from $9.55 to $9.44 over the past 60 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.