Will Weak Gardasil Sales Continue to Weigh on MRK's Top Line in 2026?

Merck MRK continues to face challenges with its second-largest product, Gardasil, which is a vaccine approved to prevent certain cancers caused by the human papillomavirus. While the vaccine’s sales grew steadily through 2022, it started witnessing sluggish sales from 2024.

Gardasil sales declined 39% year over year to $5.2 billion in 2025.

Sales of the vaccine declined due to weak performance in China, which resulted from sluggish 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.

Accordingly, 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 the trend expected to continue in 2026.

Per management, Gardasil sales are not expected 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).

Sales of some other Merck vaccines, like Proquad, M-M-R II, Varivax, Rotateq and Pneumovax 23, also declined in 2025.

However, sales of the new vaccine, Capvaxive, have been rising, driven by demand growth.

Also, Merck’s newest respiratory syncytial virus (RSV) antibody, Enflonsia (clesrovimab), was approved in the United States in June 2025, while it is under review in the EU. The RSV antibody recorded sales worth $21 million in the fourth quarter compared with $79 million in the third quarter of 2025. A lower-than-expected infant immunization rate and high inventory levels in the market hurt sales in the fourth quarter. It remains to be seen how Enflonsia performs as 2026 progresses.

Enflonsia faces competition from AstraZeneca AZN/Sanofi’s SNY RSV antibody Beyfortus, which was approved for a similar indication in 2023.

In 2025, the AZN/SNY antibody recorded sales worth €1.8 billion, up 9.5% on a year-over-year basis, reflecting strong demand.

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%, compared with the industry’s 0.8% rise. The stock has also outperformed the sector and the S&P 500 during the same time frame, as seen in the chart below.

From a valuation standpoint, Merck is trading at a premium compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 18.40 forward earnings, higher than 17.89 for the industry and higher than its 5-year mean of 12.57.

The Zacks Consensus Estimate for 2026 earnings per share has decreased from $5.99 to $5.47, while the same for 2027 has declined from $10.01 to $9.89 over the past 30 days.

MRK's Zacks Rank

Merck currently has a Zacks Rank #4 (Sell).

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).

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