Will Lower Gardasil Sales Hurt MRK's Vaccines Sales in Q1 Earnings?
Merck MRK continues to encounter persistent challenges with its second-largest product, Gardasil, a vaccine approved to prevent certain cancers caused by the human papillomavirus. While Gardasil’s sales grew steadily through 2022, growth began to slow down in 2024.
Gardasil sales plunged 39% year over year to $5.2 billion in 2025.
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. The company is also seeing lower demand for the vaccine in Japan, with sales not expected to improve in 2026.
We expect Gardasil sales to decline due to lower demand in China as well as Japan in the first quarter.
The Zacks Consensus Estimate for Gardasil’s first-quarter sales stands at $1.18 billion.
MRK’s Other Vaccines & Competition in the Space
Besides Gardasil, Merck markets 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 2025.
However, as seen in previous quarters, sales of the new vaccine, Capvaxive, are likely to have improved sequentially in the first quarter, driven by growing demand.
Also, Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025. The RSV antibody was approved in Europe earlier this month.
Enflonsia recorded sales worth $21 million in the fourth quarter of 2025, which declined sequentially due to a lower-than-expected infant immunization rate and high inventory levels in the market. As Merck prepares to report its first-quarter 2026 results, it remains to be seen how Enflonsia performs in the quarter.
Enflonsia faces competition from AstraZenecaAZN/Sanofi’s SNY RSV antibody Beyfortus, which is approved for a similar indication.
In the first quarter of 2026, the AZN/SNY antibody recorded sales worth €284 million, up 2.8% 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 increased 8.9% against the industry’s 5.4% decline. The stock has also outperformed 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 is trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 17.69 forward earnings, higher than 16.62 for the industry and higher than its 5-year mean of 12.68.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has decreased from $5.18 to $4.93, while the same for 2027 has declined from $9.98 to $9.91 over the past 60 days.
Image Source: Zacks Investment Research
MRK's Zacks Rank
Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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