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Will Soft Gardasil Demand Continue to Dampen Merck's Top Line?
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Key Takeaways
Gardasil sales dropped 40% in the first nine months of 2025 due to weak demand in China and Japan.
Economic weakness in China and soft demand in Japan weigh on Gardasil's sales outlook.
MRK's other vaccines, including ProQuad, Rotateq and Pneumovax 23, also saw sales decline.
Merck (MRK - Free Report) continues to face challenges with Gardasil, its second-largest product, which is a vaccine approved 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.
Gardasil sales declined 3% in 2024 and 40% on a year-over-year basis during the first nine months of 2025.
Sales of Gardasil are declining due to weak performance in China, driven by sluggish demand trends amid an economic slowdown. Lower demand in China led to 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 in China through at least the end of 2025, as a result of which Gardasil sales are expected to decline significantly in 2025 from 2024 levels.
Coupled with headwinds in China, Merck is also seeing lower demand for Gardasil in Japan in recent quarters. Management expects Gardasil sales to remain weak in China as well as Japan heading into the new year. Our estimates for Gardasil sales suggest a negative CAGR of 18.1% 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 some other Merck vaccines, like Proquad, M-M-R II, Varivax, RotaTeq and Pneumovax 23, also declined in the first nine months 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. The RSV antibody recorded sales worth $79 million in the third quarter of 2025, consisting of inventory stocking.
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.
In the first nine months of 2025, the AZN/SNY antibody recorded sales worth €1.09 billion, up 33.8% on a year-over-year basis.
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 risen 6.3% compared with the industry’s rally of 15.9%. The stock has 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 11.97 forward earnings, lower than 16.98 for the industry and its 5-year mean of 12.56.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has increased from $8.94 per share to $8.98, while the same for 2026 has decreased from $9.56 to $8.81 over the past 60 days.
Image: Bigstock
Will Soft Gardasil Demand Continue to Dampen Merck's Top Line?
Key Takeaways
Merck (MRK - Free Report) continues to face challenges with Gardasil, its second-largest product, which is a vaccine approved 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.
Gardasil sales declined 3% in 2024 and 40% on a year-over-year basis during the first nine months of 2025.
Sales of Gardasil are declining due to weak performance in China, driven by sluggish demand trends amid an economic slowdown. Lower demand in China led to 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 in China through at least the end of 2025, as a result of which Gardasil sales are expected to decline significantly in 2025 from 2024 levels.
Coupled with headwinds in China, Merck is also seeing lower demand for Gardasil in Japan in recent quarters. Management expects Gardasil sales to remain weak in China as well as Japan heading into the new year. Our estimates for Gardasil sales suggest a negative CAGR of 18.1% 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 some other Merck vaccines, like Proquad, M-M-R II, Varivax, RotaTeq and Pneumovax 23, also declined in the first nine months 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. The RSV antibody recorded sales worth $79 million in the third quarter of 2025, consisting of inventory stocking.
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.
In the first nine months of 2025, the AZN/SNY antibody recorded sales worth €1.09 billion, up 33.8% on a year-over-year basis.
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 risen 6.3% compared with the industry’s rally of 15.9%. The stock has 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 11.97 forward earnings, lower than 16.98 for the industry and its 5-year mean of 12.56.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings per share has increased from $8.94 per share to $8.98, while the same for 2026 has decreased from $9.56 to $8.81 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.