New Sex-Virus Vaccine Gives Merck Blockbuster Shot

Merck & Co.'s Gardasil, the first inoculation against a cancer for women, may become the best- selling vaccine in history as the drugmaker prepares to expand its use to men. The product may generate as much as $1.4 billion in its first full year on the market as governments endorse it for preventing cervical cancer caused by the sexually transmitted human papillomavirus. Whitehouse Station, New Jersey-based Merck is now conducting studies to prove the vaccine can also prevent infections in men. Merck shares have gained more than 50 percent since the June 2006 U.S. approval, and more gains may come as revenue increases. Gardasil use is rising faster than any new vaccine, and giving it to boys and young men as well as girls may push annual sales potential above $10 billion, says Lisa Kelly, an analyst at Wood Mackenzie Consultants Ltd. in Edinburgh. That would make Gardasil Merck's best-seller.

Recovered From Vioxx

The introduction of Gardasil and sales of the Vytorin cholesterol medicine have won over investors, pushing Merck shares up 21 percent this year. The stock rose 71 cents to $52.86 at 4 p.m. in New York Stock Exchange composite trading today.

Merck and French drugmaker Sanofi-Aventis SA jointly sell Gardasil in Europe. Sanofi, based in Paris, is also likely to benefit because European sales of the product may surge as high as $1.1 billion in 2012, HSBC analysts said in a Sept. 24 note to clients. That may boost the French company's earnings, analyst Kevin Scotcher wrote.

The jointly owned Sanofi Pasteur MSD, based in Lyon, France, today asked European regulators to widen the license on Gardasil to include use as a prevention of vulvar and vaginal cancers after tests showed it worked for these types of tumors.

Sanofi gained 67 cents, or 1.1 percent, to 60.75 euros in Paris, the most since Sept. 19.

Merck's stock has recovered from the recall of the Vioxx painkiller, which cut 31 percent from the shares in the three months after the product was pulled in September 2004 because of links to heart attacks and strokes. Profit may rise in 2007 for the first time in three years, according to the average estimate of 24 analysts surveyed by Bloomberg.

Fighting Resistance

Merck has overcome resistance from religious groups who expressed concern that endorsing the Gardasil vaccine would encourage promiscuity. The drugmaker successfully lobbied states and insurers to pay for the product.

Judicial Watch, a Washington-based public interest group, considers it ``disturbing that state and local governments might mandate in any way this vaccine for young girls,'' after FDA documents obtained under the Freedom of Information Act showed as many as eight new deaths related to the drug, the group's president, Tom Fitton, said in a news conference in Washington today. The agency reported three deaths in May.

Those three U.S. deaths weren't caused by the vaccine, said Robert Ball, chief of the FDA's Vaccine and Safety Branch, in an interview yesterday. Other adverse drug reports cited fainting, a widely known side effect of vaccination, he said.

`Take More Seriously'

``I just wish the FDA wouldn't so quickly explain this away, and take it more seriously than they have,'' Judicial Watch's Fitton said. ``The FDA's record on some of these drug-safety issues isn't as strong as they should be.''

The reports justify further investigation, he said.

Merck also won the support of the Atlanta-based U.S. Centers for Disease Control and Prevention, which backed the vaccine as a way to reduce cervical tumors, the second-biggest cancer killer among American women after breast cancer.

Merck also has benefited by beating GlaxoSmithKline Plc to the market. The London-based drugmaker hasn't won approval to sell its competing Cervarix in the U.S. and only began marketing the product in Europe this week, a year after Gardasil.

Joura, a Vienna gynecologist who helped conduct clinical trials with Gardasil on women, began inoculating boys as soon as it was approved. Joura says males develop genital warts more frequently from human papillomavirus than females and as a result, can contribute more to its spread than infected women.

During First Years

Vaccinating the youngsters before they become sexually active would offer added protection to females, he says, a public health argument Merck and Sanofi are planning to make should clinical trials in boys prove successful.

``Potentially you could be looking at a doubling of the market size'' if boys are vaccinated, Kelly said. ``It's really just the education that would determine how big the market could be.''

Human papillomavirus is known to scientists as the common cold of sexually transmitted diseases. More than 80 percent of men and women acquire the germ at some point in their lives, according to the non-profit group National Cervical Cancer Coalition, in Van Nuys, California.

Almost half of the cases occur between the ages of 15 and 25, during the first years of sexual activity. The virus causes genital warts and lesions, which can become cancerous.

Benefits for Boys

The benefits for boys may not be as clear as for girls, and a marketing or educational campaign aimed at vaccinating males may draw another round of religious opposition. Health plans may also balk at the cost, Wood Mackenzie's Kelly says.

Glaxo isn't working to win male patients for Cervarix.

``Our belief is the burden of this disease is predominantly in women, that's our priority,'' spokesman Joss Mathieson said. ``There a question mark over whether, in terms of health benefits, including males is cost-effective.''

Gardasil costs between 300 euros ($425) and 360 euros in Europe, compared with 240 pounds ($490) for Cervarix in the U.K. Merck generated $265 million in sales from the product last year. Kelly estimates the shot could bring in $5.5 billion in 2013 for the U.S. drugmaker, excluding use on boys.

Kelly points to a link between oral sex and a rise in the incidence of head and neck cancers as one argument for vaccinating males. The disease, typically caused by heavy drinking and smoking, is increasing among non-smokers and non- drinkers. Research shows that HPV is linked to about half of certain throat tumors.

Austria's Program

Austria is the only country to incorporate boys into a national immunization program, although Gardasil was approved for use in both sexes in the European Union and other countries. The product isn't approved for males in the U.S.

Data that could strengthen the case for vaccinating men may be available late next year. Merck and Sanofi are conducting trials on males between the ages of 15 and 26 to support an application to widen the use, said Patrick Poirot, head of Medical and Scientific Affairs at Sanofi Pasteur MSD, the joint venture that sells the vaccine in Europe.

For now, the companies are focusing their campaign on females, he said.

``The success of vaccination is based on education,'' Poirot said. Once Gardasil has been widely adopted for girls, ``they will come logically to boys.''