Merck getting merc’d after cutting Gardasil sales to China
Merck & Co. shares are down more than 10% on Tuesday after the drugmaker gave a gloomy guidance for 2025, in part because it will pause shipments of its HPV vaccine to China until at least midyear.
The vaccine giant said it expects to bring in $64.1 billion to $65.6 billion in revenue in 2025, compared to the $67 billion analysts polled by FactSet expected. Merck said it would pause shipments of Gardasil, a vaccine that prevents cancer from HPV, into China beginning in February and going through at least mid-2025. Sales of the vaccine began unexpectedly slumping in China in the second quarter of 2024, which management attributed to an anti-corruption crackdown focusing on the nation’s healthcare industry.
“Like many other companies, we’ve seen increased pressure on discretionary consumer spending, including across the vaccine space more broadly, and demand for Gardasil has not recovered to the level we had expected,” Merck CEO Robert M. Davis told analysts on Tuesday. “As a result, overall channel inventory remains elevated at above-normal levels.”
Gardasil is a key product for Merck, bringing in $8.6 billion of its $64.1 billion in sales for 2024. That shipment pause is another headwind for Gardasil, which already declined in demand compared to 2023.
Meanwhile, vaccine skeptic Robert F. Kennedy Jr. is nearing confirmation as secretary of the Department of Health and Human Services. Kennedy has referred clients to the law firm that’s filed suit against Merck, saying Gardasil has potentially severe adverse effects.
