Merck report: $358m in Gardasil sales for Q2; $1 billion total for vaccines

While we don't typically highlight corporate earnings reports or similar news, the quarterly report released Monday by Merck for April-June 2007 provides some new information about the growing market for vaccines, and, in particular, Gardasil. Here's coverage from yesterday's New York Times, "Another Quarter of Strong Results by Merck," and a similar story from Reuters.

Since this news comes directly from the company, the Merck press release is particularly useful. Here's part of what it says about vaccines:

"Total vaccine sales, as recorded by Merck, were $1.0 billion for the quarter, compared to $349 million in the second quarter of 2006. The growth in vaccine sales was led by the performance of GARDASIL along with strong contributions from ROTATEQ and other pediatric vaccines. Vaccines in most major European markets are sold through the Company’s joint venture, Sanofi Pasteur MSD, and the results from its interest in the joint venture are recorded in equity income from affiliates.

Total sales as recorded by Merck for GARDASIL, the Company's cervical cancer vaccine, were $358 million for the second quarter. As of the second quarter, GARDASIL has been approved in 80 countries, many under fast-track or expedited review; and launched in 59 of those countries. The vaccine remains under review in approximately 40 other countries.

ROTATEQ, Merck's vaccine to help protect children against rotavirus gastroenteritis, achieved worldwide sales, as recorded by Merck, of $119 million for the quarter. As of the second quarter, ROTATEQ has been approved in 61 countries and it has launched in 22 of those countries."

The release goes on to note sales figures for Proquad ($89 million), Varivax ($147 million), and Zostavax ($47 million).

A companion document released by Merck breaks down sales between the U.S. market and internationally. Nearly 80% of Gardasil sales were in the U.S. ($286 million), as were an amazing 96% of RotaTeq sales ($114 million). There's little doubt from these data that the U.S. is leading the way in the uptake of these two fairly new vaccines, despite the far greater need for cervical cancer and rotavirus prevention internationally.

Overall, $1 billion in vaccine sales for a single company in a three-month period is perhaps the best evidence to date of the potential profitability of vaccines to an extent not previously seen. As for Gardasil, it is difficult to work backwards from the sales figures given ($358m) to ascertain the number of doses sold during the April-June period, since governments and insurance companies pay less than the well-known $120/dose 'sticker price'. This CDC price list shows a cost of $96.75/dose for Gardasil as part of the Vaccines for Children program. Using those figures as endpoints, a very rough estimate would suggest 3-4 million doses were sold, or enough doses to fully vaccinate slightly more than 1 million girls.

Given the size of the population for whom vaccination is recommended (all females 11-26), the potential growth of the Gardasil market is staggering, perhaps explaining, in part, the company's apparent enthusiasm to promote its vaccine in advance of the arrival of GSK's Cervarix.