Merck's Vaccine Efforts Are Struggling

Last Updated Oct 31, 2008 8:00 AM EDT

merck richard clark.jpgMerck seems to be having difficulty with many of its vaccine efforts. So much so that CEO Richard Clark all but apologized to analysts in his third quarter earnings call. The trouble began about a year ago, when Merck recalled a batch of Pedvaxhib and Comvax vaccines, for Haemophilius influenzae type b and hepatitis B, respectively.

Then, in March 2008, the FDA placed on hold a trial for a new hep b vaccine, Heplisav, being conducted jointly with Dynavax. On Oct. 21 Merck reported that the FDA wasn't done with the trial, and had asked for more information.

In June, the FDA delivered more bad news, telling the company it would not immediately approve HPV vaccine Gardasil for use in women aged 27 to 45. (The obvious question is the fact that women in that age bracket have been sexually active years and most probably have already encountered the disease.)

In addition, an ongoing shortage of the shingles vaccine Zostavax has plagued the company, generating headlines:
"We probably have a list of almost 200 patients wanting to get it," Paul Vossen, a pharmacist at Dandurand's Piccadilly Pharmacy in Wichita, told the local paper. "They just keep moving the date back on us," he said. "The latest is, 'We're not sure.' "
CEO Clark acknowledged the problem in the earnings call, noting that things had hurt the company's outlook. The reason Merck was having problems? Making vaccines is, like, hard:
One of the factors that has led us to moderate our outlook is the manufacturing challenges that have attracted availability of certain of our vaccines... vaccine manufacturing is inherently complex. The process is complicated so it can take many months to manufacture vaccines from start to finish.
He then said that Merck hoped to catch up with the Zostavax shortage by the end of the year, and that the company was investing $1 billion in new capacity. Kenneth C. Frazier, Merck's president of global human health immediately cast doubt on that when he added that, er, the backlog may actually extend into 2009:
As new orders are received, we will fill in as quickly as possible but it is possible that depending on demand levels, some new orders will be back ordered and filled in early 2009.
Analysts, naturally, had some questions about all this. John Boris of Citigroup asked:
... you announced recently the Hepatitis B vaccine obviously also has issues. Can you just talk about what is going on ... from a safety standpoint view?
Clark dodged the question:
I have a lot of confidence in our scientific capabilities within Merck I think it is our strong points as a company and I think we have the ability to interact and communicate with the agency to make sure we understand if there are any changes or signals that we received that were able to make sure that we proactively answer those questions.
David Risinger of Merrill Lynch then tried again, only on the Gardasil issue:
I may have missed this, but where does Gardasil for 27 to 45 year old females stand? Thank you.
Clark ignored the question and the call ended without an answer.

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