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The Billion-Dollar "Dud": Merck's HPV Vaccine Takes a Licking But Keeps on Ticking

Contrary to what you read recently in Fortune, Merck (MRK)'s HPV vaccine, Gardasil, is not a "dud." It sells $1 billion worth of shots a year -- the pharmaceutical industry's official definition of a blockbuster. In fact, you can only make the case that Gardasil is a failed product if you willfully ignore the brand's track record.

Fortune reached its odd conclusion by noting that after Gardasil's launch in 2006, it quickly ran up $1.1 billion in sales. But:

... it has proven to be a marketplace dud. In Merck's second quarter, the company reported an 18% year-over-year drop in sales to $219 million and [MRK] stock is down nearly 3% to date.
The article then went on to say:
Since then, Gardasil sales have been flat or declining, with analysts expecting the drug to pull in $1 billion in sales for years to come.
First, it's not unexpected that a new drug would see a quick increase in sales upon launch only to level off as a "normal" background rate of use kicks in. Second, $1 billion is not to be sneezed at.

The remainder of the article went on to detail the various apparent flaws in Merck's marketing of the drug, from the difficulty of administering the three-shot regimen to the political backlash against vaccinations. It concludes, "a full comeback seems unlikely."

"Unlikely"? I would have chosen the phrase "not impossible." Ever since Gardasil's launch -- which focused on the prevention of cervical cancer in women, which HPV causes -- there's been a drumbeat of interest in the other types of cancer that HPV is associated with. The virus is linked to throat cancer, skin cancer, anal cancer and penile cancer.

Even though Merck has stopped funding research into new applications for Gardasil, the medical profession is becoming convinced that boys as well as girls should receive the shots:

"Clearly, boys need to be vaccinated," says Marshall Posner, the incoming medical director of head and neck cancer at Mt. Sinai Medical Center in New York. "I want my kids to be vaccinated. I don't see a downside to these vaccines."
Countries and governments continue to add HPV vaccination to the lists of required inoculations for school attendance. Ireland just added it, for instance.

Given all that, the tide rather seems to be flowing with Gardasil, not against it.

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Image courtesy of Wikimedia Commons/Eugene Peretz, CC.
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