Did Merck's Sex and the City Strategy Work?

Recently I blogged about Merck (MRK) advertising its cervical cancer vaccine Gardasil to a captive audience during trailers for the Sex and the City movie.

At the time a spokesperson told me the drugmaker was trying to target 19- to 26-year-old females. The company's earnings conference call last night revealed why.

Gardasil sales in the second quarter were $326 million. Higher than a recently reduced UBS forecast but still down nine percent from the same quarter a year ago and from $390 million in the first quarter of this year. Merck also slashed its full-year Gardasil sales forecast from $1.9-$2.1 billion to $1.4-$1.6 billion.

Merck's President of Global Human Health, Ken Frazier (who, by the way, I think may be in line to possibly become the first African-American CEO of a major U.S. pharmaceutical company), cited a few reasons for the declining Gardasil numbers. But he singled out the fact that, as he put it, "We clearly underestimated the attitudinal and behavioral barriers with 19 to 26 year-olds themselves as well as the doctors who treat them." In pharma-sales-speak, they're having difficulty penetrating that cohort.

Frazier spent a good amount of time talking about the situation. "We have to translate their (the 19-26 year-olds) awareness into action. We have to make it relevant for them to come in and demand vaccines. And we have to get O.B. guys (obstetricians) who are not vaccinators to adopt that as a business model and to strongly recommend it to their patients."

I'm guessing the Sex and the City strategy didn't work. Or maybe it's too soon to tell. The marketing people and the ad agencies are probably hard at work trying to come up with a message that resonates. Referring to the lower than expected level of current demand and the need to goose it Frazier said, "It's not an excuse. That's the challenge before us. And that's the challenge we're taking on."

Investors aren't sure about that. Yesterday Merck shares were hammered, hitting another new low of $31 and change.