Predicting the Success of HPV Vaccines

Analysts agree that the much-anticipated cervical cancer vaccines in development at Merck and GlaxoSmithKline face a number of obstacles before they can achieve blockbuster status. But they are split over the time it will take to navigate these roadblocks and reach maximum sales potential.

    Both companies are in the final stages of development of vaccines that target strains of the human papilloma virus (HPV), which causes genital warts and, if unchecked, can lead to cervical cancer. Merck is expected to file for FDA approval of Gardasil before the end of 2005. GSK plans to file for approval of its product, Cervarix, in 2005 in the UK and in 2006 in the United States.

    If approved, HPV vaccines could change the cervical cancer screening process in the developed world and open new avenues of prevention in developing countries.

    “This is significant in terms of the unmet need that it will be addressing,” Murray Aitken, senior vice president of corporate strategy at IMS Health, said about Gardasil. “Based on the clinical information to date, this looks like a truly remarkable breakthrough.”

    But even after approval, experts are predicting that the vaccines will face a number of potential hurdles before reaching maximum sales revenues including:

• Getting their vaccines included on state government programs in the United States.
• Overcoming opposition from political groups in the United States who believe that use of the vaccine could increase teen sexual activity and will want to exclude if from state-mandated programs
• Educating the public about the link between HPV and cervical cancer.
• Persuading European government programs and domestic private insurers to pay for the vaccines, which are expected to cost $225 to $350 for a course of three injections

    Merck and GSK’s ability to successfully clear these hurdles will determine how quickly they can reach blockbuster status, analysts say.

A Wide Range of Sales Forecasts

GSK believes its vaccine will generate impressive revenues quickly. In June, it predicted the global market for HPV vaccines could reach at least $4 billion by 2010. In a Sept. 12 letter to shareholders, Richard Clark, Merck chief executive officer and president, listed a successful launch of Gardasil as one of three “key” factors for improving the company’s performance.

    In an Oct. 11 report, Morningstar analyst Tom D’Amore predicted Gardasil sales of $1 billion in 2009. The previous week, coinciding with Merck’s Phase III results announcement, Bear Stearns analysts John Boris estimated that Gardasil’s sales would reach $1.6 billion by 2010. Although he did not predict exact figures for Cervarix, Boris indicated that sales could be comparable to predictions for Gardasil, saying that the two vaccines could split the market.

    But Stephan Gauldie, analyst at Wood Mackenzie, predicted that it would take 10 to 15 years for HPV vaccine sales to reach their potential. He estimated 2009 sales of $410 million for Gardasil and $258 million for Cervarix.

    “How long is it going to take to get the message across?” Gauldie said in an interview. “We don’t believe that’s going to be rapid.”

Potential Stumbling Blocks:

Experts agree that after approval, the main challenge for Merck and GSK is getting their vaccines included in government programs.

    Both Gauldie and Boris said that HPV vaccines are likely to be approved in the United States at the federal level by the Advisory Committee for Immunization Practices. But the vaccines are administered through state programs, which may or may not follow federal recommendations. Boris predicted state-level implementation would happen quickly because Merck has already established working groups in a majority of states.

    But Gauldie said state governments might bow to already mounting political pressure from groups who oppose vaccinating 10- to15-year-old children against HPV, a sexually transmitted disease. This could hinder states from including Gardasil or Cervarix in mandatory vaccination programs, he said. Some analysts see a link between HPV vaccines and the political saga of Barr Laboratories’ so-far-unsuccessful attempt to move its morning-after contraceptive, Plan B, to over-the-counter status.

    Evan Myers, a professor of obstetrics and gynecology at Duke University and Merck consultant, said the companies could avoid this problem by emphasizing that preventing cervical cancer is the primary goal of vaccination. The link between HPV and cancer is better known than in previous years, he said.

    “I don’t think there’s as much stigma attached as there would have been 15 years ago,” he said.

    Gauldie and Boris also agreed that inclusion in government-sponsored vaccination programs would take longer in Europe than the United States. Gauldie indicated that Merck and GSK might have to lower prices in order to get the vaccines included in these programs.

    Gauldie predicted that if government programs do not include these vaccines, insurance companies might also be opposed to the high prices. This would also be an issue for older women interested in getting vaccinated.

    “It might be a difficult sell for the insurance companies,” he said.

    Myers disagreed. He believes that various medical professional organizations will recommend vaccinating against HPV, making it impossible for insurance companies to refuse.

The Clinical Impact

If HPV vaccines are adopted, it will be cost-effective for women in developed countries to screen for cervical cancer less frequently, Myers said. In addition, positive tests will be more likely to actually indicate a problem, he said. Current screening programs frequently identify abnormalities of HPV, but relatively few lead to cancer.

    Myers asserted that HPV vaccines could be key in preventing cervical cancer in developing nations, where screening programs are rare or non-existent.