Recently, Merck (MRK) submitted study data to the US Food and Drug Administration (FDA) related to the use of Gardasil in women in the age group of 27-45 years. Gardasil, one of the most significant products in Merck’s portfolio received FDA approval in June 2006 for preventing cervical cancer and genital warts in females in the age group of 9-26 years.
 
However, Merck’s vaccine segment has been witnessing pressure from lower sales of the cervical cancer vaccine Gardasil. While sales ramped very quickly following the approval of Gardasil in 2006, sales have struggled recently due to difficulty in penetrating patients. Global sales of Gardasil declined 22% to $311 million during the third quarter. Although the vaccine received FDA approval in September 2009 for the protection of boys and men, within the age group of 9–26 years, from genital warts related to human papillomavirus (HPV) types 6 and 11, sales will remain under pressure as on the same day, GlaxoSmithKline’s (GSK) cervical cancer vaccine, Cervarix received approval in the US.
 
Gardasil is designed to target four HPV strains; HPV 6, HPV 11, HPV 16 and HPV 18. While two of these (HPV 16, HPV 18) account for about 70% of cervical cancer cases in the US , the other two HPV strains are responsible for genital warts in both men and women.
 
Merck has been trying hard to get the vaccine approved for expanded use to boost its sales. Earlier in 2009, the FDA asked for data from the company’s 48 month study for approval. According to a study published in a medical journal in June, Gardasil was found to be 90% effective in preventing infection with the virus in women 24-45 years of age. We believe expanded use of the vaccine will boost sales of Gardasil which is facing lower sales due to tough competition. We have a Neutral recommendation on Merck.
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