How Has Merck’s Story Changed?

Investors are pricing Merck (MRK) stock at 5.5 times sales, compared with 3.1 for the S&P 500. Shareholders paying that premium need to understand exactly what they hold, and the drugmaker’s priorities have changed. During the fiscal Q4 2024 call in February 2025, executives noted that conditions for the GARDASIL vaccine in China remained challenging. By the August 4, 2026 call, management emphasized something else. So what does management talk up now?

Merck’s Management Now Talks Up New Medicines

During the fiscal Q2 2026 call, executives highlighted the FDA approval of LIPFENDRA, the first and only oral PCSK9 inhibitor, which helps reduce LDL cholesterol. They also detailed positive top-line results from a large Phase III program for sac-TMT, framing Merck as a substantially stronger and more diversified company.

A year earlier, executives were reporting on a shrinking vaccine franchise. During the fiscal Q2 2025 call in July 2025, executives disclosed that GARDASIL sales were $1.1 billion, down 55% from a year earlier. That decline occurred during a quarter when total revenue at Merck fell 2%.

The company no longer emphasizes GARDASIL in China, and the vaccine came up just once on the August 4 call.

How Big Are GARDASIL And Merck’s Newer Drugs?

GARDASIL still generates more revenue than either WINREVAIR or CAPVAXIVE, posting $1.2 billion of sales in fiscal Q2 2026. Executives noted on the fiscal Q3 2025 call that both newer drugs would help fuel growth. GARDASIL made up about 7% of Merck’s $16.6 billion in revenue in fiscal Q2 2026. Excluding currency effects, those sales were up 3% from a year earlier, driven by growth in international markets.

WINREVAIR, a treatment for pulmonary arterial hypertension, recorded sales of $525 million in the same quarter. That figure is up 87.5% from $280 million a year earlier in fiscal Q1 2025, with management crediting strong demand. Meanwhile, the pneumococcal vaccine CAPVAXIVE sold $142 million, up 31% from a year earlier excluding currency effects. Both newer drugs are growing, yet each still sells less than GARDASIL.

Is Merck’s Quieter Tone On GARDASIL Reassuring?

Mostly, yes, because GARDASIL has become a smaller drag on the broader business. Its sales fell less in fiscal Q1 2026 than in fiscal Q2 2025. At the same time, total revenue for Merck grew 5.1% from a year earlier in fiscal Q2 2026.

The caveat for shareholders is profit. Over the twelve months to June 2026, Merck posted an operating margin of 10.5%, compared with 31.2% a year earlier. In August, Merck raised its revenue outlook as new products grew, CNBC reported. However, the company also cut its profit guidance because of a charge tied to buying Terns Pharmaceuticals.

The performance of GARDASIL sales against a year earlier remains the number to watch when Merck reports, expected on or around October 29, 2026.

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