Sales of Merck’s MRK second-largest product, Gardasil, which is a vaccine approved to prevent certain cancers caused by the human papillomavirus, have been declining for some time now. While the vaccine’s sales grew steadily through 2022, it started witnessing sluggish sales from 2024.
Gardasil sales plunged 22% to $1.07 billion in the first quarter of 2026. Sales of Gardasil are declining due to weak performance in China, which resulted from weak 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. As a result, 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.
Management does not expect Gardasil sales to improve in 2026.
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).
While Merck continues to grapple with weakness in Gardasil sales, revenues from other vaccines, including ProQuad, M-M-R II, Varivax, RotaTeq and Vaxneuvance, also fell in the first quarter of 2026.
However, sales of the new 21-valent pneumococcal conjugate vaccine, Capvaxive, increased 31% year over year in the first quarter, driven by growing demand.
Meanwhile, Merck’s newest respiratory syncytial virus (“RSV”) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025 and in the European Union in April 2026.
Enflonsia’s sales were $1 million in the first quarter of 2026, compared with $21 million in the fourth quarter of 2025 in the United States. MRK expects minimal sales from Enflonsia in the second quarter as well due to seasonality and increased inventory levels in the market.
Enflonsia faces competition from AstraZeneca AZN /Sanofi’s SNY RSV antibody Beyfortus, which is approved for a similar indication.
Sanofi recorded Beyfortus sales of €284 million in the first quarter.
AstraZeneca records its share of gross profits and royalties on Beyfortus sales in major markets outside the United States as Alliance revenues. It also records Product Sales from AstraZeneca’s sales of manufactured products to Sanofi.
AZN recorded $116 million in revenues from Beyfortus in the first quarter, which included alliance revenues as well as sales of the manufactured Beyfortus product to SNY.
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 10.1% against the industry’s 0.7% 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 discount compared with the industry. Going by the price/earnings ratio, the company’s shares currently trade at 16.65 forward earnings, lower than 16.96 for the industry but higher than its 5-year mean of 12.73.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings per share has inched up from $5.15 to $5.16, while the same for 2027 has declined from $9.85 to $9.78 over the past 30 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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This article originally published on Zacks Investment Research (zacks.com).