Merck & Co.'s Ebola Vaccine Won't Move The Needle

At the end of last month, the World Health Organization stated that an effective Ebola vaccine may be around the corner, citing an interim analysis of phase 3 trial results of Vesicular Stomatitis Virus-Ebola Virus Vaccine (also called VSV-EBOV) that is licensed to Merck now. Merck purchased commercial rights for the vaccine from NewLink Genetics in late 2014 and agreed to pay royalties to NewLink in some markets. So the question arises – what’s Merck’s commercial opportunity in this? We believe that Merck will approach this from a humanitarian perspective rather than a commercial endeavor, thus keeping margins and returns low. In other words, a successful Ebola vaccine won’t be a needle mover for Merck’s stock. Let’s see why.

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