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Taking A Shot At GlaxoSmithKline

Friday, 8 May 2009 | 12:18 PM ET
GlaxoSmithKline
Source: Ian Wilson
GlaxoSmithKline

Last month I was keeping crazy hours working the overnight shift anchoring “Worldwide Exchange” at 4 a.m. ET, waking up around 1 a.m. ET. This month, I’m back to normal. So, I wasn’t awake when GlaxoSmithKline emailed a press release at 4:55 a.m. ET today.

The Glaxo announcement containedthe results of the first head-to-head study of GSK’s Cervarix versus Merck’sGardasil. They’re the shots for the sexually transmitted virus that can cause genital warts and cervical cancer. MRK’s is already on the market. GSK’s has been delayed in getting there.

The head-to-head results show Cervarix did pretty well. So, here was an opportunity for Glaxo to tout the efficacy of its potential challenger, but no one from the company bothered to give us a heads up about it.

Merck had its own test results coming out at the same scientific meeting in Sweden at 2 a.m. ET. So, as is common practice between companies and reporters, its point-person reached out to us yesterday andgave us an embargoed release well ahead of time. That gave me plenty of time to write some copy on it for CNBC.comto post as soon as the embargo lifted in the middle of the night.

I put the Merck Gardasil study story to bed late yesterday afternoon. Had I known about the Cervarix study results I would have incorporated that into the copy or I would have written a separate story to go up when the GSK embargo lifted. In fact, it probably would’ve been the lead since it’s the first direct duel between the two products. But I had no clue, I’m not a mindreader and I don’t keep my BlackBerry on and sitting on the nightstand unless I’m expecting big news to break (i.e. a rumored merger agreement.)

The fight over efficacy isn’t the only battlefront here. Sales of Gardasil are going down. By its own admission, Merck is having a tough time getting females in their late teens and early- to mid-20s to get the set of three shots. It’s hoping to find a way to break through with that population and to win approval of the vaccine for older women and males to reignite sales growth. And Glaxo will be late getting into the game. JPMorgan pharma analyst Chris Schott writes in a research note to clients today, “The larger issue for cervical cancer vaccines in the US is the relative stagnation of the US market. We forecast a decline in US vaccinations (and thus US market sales) in 2009 relative to 2008, with 2010 sales returning to roughly 2008 levels.”

Gardasil and Cervarix are given as shots in the arm. Today, Glaxo kinda shot itself in the foot.

Disclosures:JPM has banked MRK and wants to do it again. It’s also a financial advisor on the MRK/Schering-Plough deal.

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman

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