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Vaccine May Be a Winner for Merck

Gardasil, meant to protect women from cervical cancer, was a big success in a study.

An experimental


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vaccine designed to protect women from cervical cancer was completely successful, according to the findings of a company-sponsored research program.

The vaccine, Gardasil, is being developed to fight the human papillomavirus, or HPV, which can lead to cervical cancer. The research found that Gardasil recorded a 100% prevention rate of certain early cancers and precancerous lesions for two types of HPV that account for 70% of cervical cancers.

Laura Koutsky, principal investigator of the HPV research group at the University of Washington, said the results are the first pivotal data to show that vaccination with Gardasil reduced cervical precancer and noninvasive cervical cancer associated with HPV 16 and HPV 18, the two major types of HPV.

Merck's news sent its stock up 33 cents, or 1.2%, to $27.22 in heavy trading Thursday. The drugmaker's shares rose as high as $27.84 as trading began, but eased after a New Jersey judge rejected a Merck request to dismiss a Vioxx-related lawsuit midway through the trial.

John Boris of Bear Stearns wrote in a research note that the Gardasil test results are "compelling," and the timing of the clinical trial gives the vaccine a competitive advantage over Cervarix, a product from


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Merck appears to be in the lead to convince regulators of the effectiveness of its vaccine.

Boris expects Gardasil to reach the U.S. market in late 2006 and Cervarix to become available in 2008. That two-year lead is "potentially a significant opportunity for Merck," he says. Boris has a peer perform rating on Merck. He doesn't own Merck shares, and his firm doesn't have an investment banking relationship with the company.

Merck said it remains on schedule to seek marketing approval for Gardasil during the fourth quarter from the Food and Drug Administration.

The announcement provided some welcome relief to Merck, whose headlines in recent months have been primarily linked to lawsuits over Vioxx, the arthritis drug that was withdrawn more than 12 months ago.

Merck lost its first Vioxx suit in a Texas state court in August, and the company has said it will appeal. The New Jersey trial is continuing. Merck has been named as a defendant in thousands of personal injury lawsuits.

Merck says roughly 20 million American women and men are infected with HPV. Cervical cancer causes around 290,000 deaths worldwide each year, and the U.S. will have an estimated 3,700 deaths from the disease this year, the company says.

GlaxoSmithKline has said it expects to seek regulatory approval in the European Union by mid-2006 for its Cervarix vaccine that also attacks the two major forms of HPV. The company, which hasn't forecast a U.S. application, is working with



on the HPV vaccine.

Merck's late-stage clinical trials of Gardasil, which are continuing, include more than 25,000 women in 33 countries. More than 12,100 women from 13 countries participated in the trial whose results were released Thursday.

Nicknamed Future II, this trial tested women 16 to 26 years old. Some received a three-dose regimen of Gardasil. Others received a placebo. The study looked at women who weren't infected with HPV when they enrolled in the test and who remained infection-free through the time they received the vaccine. Women were followed for an average of two years after enrollment.

Researchers found no cancers or precancerous lesions among 5,301 women in the vaccine group. They found 21 cases in the 5,258-member placebo group.

"There were no discontinuations due to serious vaccine-related adverse events," Merck says. The most common vaccine-related problem was injection-site discomfort. Gardasil also is being tested against two types of HPV that account for 90% of the cases of genital warts.