Innovax: The Chinese Vaccine in the Market Merck LeftThin moat

Merck & Co. (MRK) — moat facet

China approved its own nine-valent HPV vaccine three months after Merck stopped shipping Gardasil there.

In China, Merck's competitor is not another multinational but a domestic vaccine maker with a product that did not exist two years ago. China approved its first domestically developed nine-valent HPV vaccine, Cecolin 9, in May 20251, developed with Xiamen University and Wantai BioPharm2. Merck's own report notes that a nine-valent vaccine from a local manufacturer received approval in China that month for females aged 9 to 453.

Merck sales in China ($M)4,37820215,19120226,80220235,49420241,9392025Merck Forms 10-K FY2023 and FY2025, sales by country
A 71% fall in two years.

The timing was hard for Merck. It had paused Gardasil shipments to China in February 20254, and Caixin described the domestic vaccine as positioned to "capture a massive market recently abandoned" by Merck5. Merck's sales in China fell from $6,802 million in 2023 to $1,939 million in 20256.

This is a different kind of competitor. A domestic vaccine maker in China can benefit from procurement and national programmes that favour local products, and Chinese price-setting for medicines is severe: Merck reports that new entries to the national reimbursement list averaged approximately 60% price reductions7.

Merck has resumed only limited shipments under a revised contract and expects the revenue to be immaterial in 20268.

The domestic vaccine's trial record is extensive. Xinhua reported that Cecolin 9 had been through multiple clinical trials across China since 20199. A product with that history will not need a foreign partner to supply the Chinese market again.

The China HPV market may not come back to Merck at its old scale. Merck's quarterly sales in China, $408 million in the second quarter of 2026 against $446 million a year earlier10, are the number to follow; a further decline after shipments resume would confirm the domestic vaccine has taken the market.

Moat trajectory: Narrowing

China sales $6.8bn in 2023, $1.9bn in 2025, $408M in Q2 2026.

The number that tests this moat
Reported
Merck sales in China, latest quarter
$408M (Q2 2026), against $446M

What is left of the China business; a further fall after shipments resume would confirm the local vaccine has the market.

Source: Merck Form 10-Q, Q2 2026 ↗
References
  1. ReportedChina approved its first domestically developed nine-valent HPV vaccine, Cecolin 9, in May 2025, developed with Xiamen University and Wantai BioPharm.
    Xinhua, 30 May 2025 - China approves its first domestically developed nine-valent HPV vaccine, Cecolin 9. — May 2025 · publ. 30 May 2025 · source ↗
  2. ReportedChina approved its first domestically developed nine-valent HPV vaccine, Cecolin 9, in May 2025, developed with Xiamen University and Wantai BioPharm.
    Xinhua, 30 May 2025 - China approves its first domestically developed nine-valent HPV vaccine, Cecolin 9. — May 2025 · publ. 30 May 2025 · source ↗
  3. ReportedMerck's own report notes that a nine-valent vaccine from a local manufacturer received approval in China that month for females aged 9 to 45.
    Merck & Co. Form 10-K for fiscal 2025 - vaccines and China: Gardasil, the childhood and pneumococcal vaccines, and sales in China. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedIt had paused Gardasil shipments to China in February 2025, and Caixin described the domestic vaccine as positioned to "capture a massive market recently abandoned" by Merck.
    Merck & Co. Form 10-K for fiscal 2025 - vaccines and China: Gardasil, the childhood and pneumococcal vaccines, and sales in China. — FY2025 · publ. 24 February 2026 · source ↗
  5. ReportedIt had paused Gardasil shipments to China in February 2025, and Caixin described the domestic vaccine as positioned to "capture a massive market recently abandoned" by Merck.
    Caixin Global, 17 July 2026 - China's first homegrown nine-valent HPV vaccine, Cecolin 9, and the market Merck left. — July 2026 · publ. 17 July 2026 · source ↗
  6. ReportedMerck's sales in China fell from $6,802 million in 2023 to $1,939 million in 2025.
    Merck & Co. Form 10-K for fiscal 2025 - vaccines and China: Gardasil, the childhood and pneumococcal vaccines, and sales in China. — FY2025 · publ. 24 February 2026 · source ↗
  7. ReportedA domestic vaccine maker in China can benefit from procurement and national programmes that favour local products, and Chinese price-setting for medicines is severe: Merck reports that new entries to the national reimbursement list averaged approximately 60% price reductions.
    Merck & Co. Form 10-K for fiscal 2025 - Item 1A risk factors, patents and exclusivity, government pricing, vaccine policy and legal proceedings. — FY2025 · publ. 24 February 2026 · source ↗
  8. ReportedMerck has resumed only limited shipments under a revised contract and expects the revenue to be immaterial in 2026.
    Merck & Co. Form 10-Q for the quarter ended 30 June 2026 - segment profits on the recast basis, the Cidara and Terns acquisitions, the Halozyme litigation, China shipments, loss of exclusivity events and the balance sheet. — Q2 2026 · publ. 7 August 2026 · source ↗
  9. ReportedXinhua reported that Cecolin 9 had been through multiple clinical trials across China since 2019.
    Xinhua, 30 May 2025 - China approves its first domestically developed nine-valent HPV vaccine, Cecolin 9. — May 2025 · publ. 30 May 2025 · source ↗
  10. ReportedMerck's quarterly sales in China, $408 million in the second quarter of 2026 against $446 million a year earlier, are the number to follow; a further decline after shipments resume would confirm the domestic vaccine has taken the market.
    Merck & Co. Form 10-Q for the quarter ended 30 June 2026 - segment profits on the recast basis, the Cidara and Terns acquisitions, the Halozyme litigation, China shipments, loss of exclusivity events and the balance sheet. — Q2 2026 · publ. 7 August 2026 · source ↗
Sources
Generated September 25, 2026