Merck & Company, Inc. · NYSE:MRK
Merck & — Merger or Acquisition (March 2009)
33 slides from Merck &'s merger presentation, Mar 13, 2009
Slide 1: Merck & Schering-Plough Merger Investor Presentation
Merck & Schering-Plough Merger Investor Presentation March 9, 2009 Schering-Ploug
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on both Merck’s and Schering-Plough’s managements’ current expectations and involve risks and uncertainties,
Slide 3: Additional information and where to find it
In connection with the proposed transaction, Schering-Plough will file a registration statement, including a joint proxy statement of Merck and Schering-Plough, with the Securities and Exchange Commission (the “SEC’). Investors are urged to read the registration and joint proxy statement (including
Slide 4: Presenters
Presenters Richard T. Clark Merck Chairman, President & Chief Executive Officer Fred Hassan Schering-Plough Chairman & Chief Executive Officer Peter S. Kim Merck Executive Vice President & President, Merck Research Laboratories Peter N. Kellogg Merck Executive Vice President & Chief Financial Office
Slide 5: Transaction Overview, Benefits, Financial Overview, Next Steps
¢ Transaction Overview Benefits of the Transaction Financial Overview Next Steps * Q&A > MERCK ofp Schering Plough
Slide 6: Richard T. Clark, Merck
ard T. Clark n, President and CEO Merck Schering-Ploug
Slide 7: Transaction Overview
Transaction Overview Merger of Merck and Schering-Plough Price per Schering-Plough Share: $10.50 cash and 0.5767 of a share of the combined company (fixed exchange ratio); total consideration $41.1 billion — Total value of $23.61 per Schering-Plough share based on Merck’s closing stock price on Marc
Slide 8: A Formula for Growth
A Formula for Growth + Strong, complementary portfolio: Broadens scope of Merck commercial portfolio with leading franchises in key therapeutic areas — Schering-Plough products provide long-lived marketing exclusivity + Enhances R&D efforts and pipeline: Adds high potential early-, mid- and late-sta
Slide 9: Fred Hassan
Fred Hassan hairman and CEO Schering-Ploug
Slide 10: The Right Transaction for Schering-Plough
The Right Transaction for Schering-Plough Over last several years Schering-Plough has undergone an impressive transformation — Grew adjusted top-line’ from $8 billion to $21 billion — Grew the R&D pipeline which now includes 12 late-stage compounds -— Successfully completed integration of Organon Bi
Slide 11: Richard T. Clark
_ Richard T. Clark Chairman, President and CEO Merck Schering-Ploug
Slide 12: Broadens and Complements Commercial Portfolio with Leading Franchises
Broadens and Complements Commercial Portfolio with Leading Franchises Therapeutic Area Schering-Plough Products Merck Products SS. > Tredaptive Cardio / (ecetimbelsimeastath! Januyia Es) “mma Metabolic Zeti (ezetimibe) Infectious Disease AveloxL, = NOXAFIL: Cancidas posaconazol is (cexpolingn aos )N
Slide 13: Value Creating Consolidation of Cholesterol JV
Value Creating Consolidation of Cholesterol JV * Merck/Schering-Plough cholesterol JV generated revenue of $4.6 billion in 2008 * Merck’s 100% ownership enables: — Streamlined decision-making ability — Opportunity for leveraging cholesterol franchise through future combinations with ZETIA € MERCK of
Slide 14: REMICADE and Golimumab
REMICADE and Golimumab REMICADE is a well-established biologic product for inflammatory / immunological diseases Marketed by Schering-Plough in international territories, marketed by Johnson & Johnson in U.S. — Schering-Plough’s 2008 sales were $2.1bn Golimumab is a late-stage pipeline product expec
Slide 15: Animal Health and Consumer Health Businesses
Animal Health and Consumer Health Businesses Animal Health — Intervet/Schering-Plough Animal Health is a global leader in animal health, with market-leading products for a broad range of species — More than 1,000 marketed products —balanced between vaccines and pharmaceuticals Consumer Health — Succ
Slide 16: Strength Across Key Therapeutic Areas
Strength Across Key Therapeutic Areas Combined 2008 Sales’: $46.9B Other = Cardio/ 18% Metabolic 24% OTC 3% Animal Health 6% Oncology 3% Respiratory Arthritis! We Immunology 6% Women's Health 8% ‘Waciines Infectious 9% Disease 9% 1 Sales figures reflect Merck and Schering-Plough reported 2008 sales
Slide 17: More Geographically Diverse Revenue Base
More Geographically Diverse Revenue Base Merck: 2008 $23.9B Asia Pacific, 6% Combined" 2008 $46.9B Latin Japan America 6% Asia 7% Pacific 5% United States United AT% States 56% Europe and Canada 26% Europe and Canada 35% International Sales $10.5 billion International Sales $25.0 billion * Sales fig
Slide 18: Long-Remaining Marketing Exclusivity
Merck and Schering-Plough Products Provide Long-Remaining Marketing Exclusivity ong periods of expected marketing exclusivity CLARINEX [i T=NCOAR [ETE NASONEX | VYTORIN US. PEGINTRON i i ———_;;,; AROS | 2005 2010 2015 2020 2025 € MERCK
Slide 19: Peter S. Kim
Peter S. Kim Executive VP & President, MRL > Schering-Ploug
Slide 20: Shared Commitment to Discovering and Developing Important Therapies
Shared Commitment to Discovering and Developing Important Therapies for Patients ¢ Schering-Plough and Merck R&D organizations share a common culture of scientific excellence ¢ Schering-Plough has an established presence in oncology and neuroscience, two areas Merck is building ¢ Schering-Plough’s e
Slide 21: Mid- and Late-Stage Pipeline: A Powerful Combination
Mid- and Late-Stage Pipeline: A Powerful Combination Select Programs (February-2009) Merck Schering-Plough Cardiovascular/ MK-0859 (atherosclerosis) Metabolic Rolofylline (heart failure} MK-0524A & MK-0524B | . By] ISENTRESS Tx Naive (HIV, Infectious Disease ISENTRESS QD (HIV) . MK-0476C (asthma) v
Slide 22: Broader and Deeper Clinical Pipeline
Broader and Deeper Clinical Pipeline (February, 2009) Phase Il Compounds Phase Ill Compounds Cancer, MK.9646 Aero MK 9858 Cardiovascular, MK-0735 nnacetrapib) Cancer, MK-8669, Diabetes, MK-0893 (deforolimus; AP2: CHF, MK-7418 (rolofytine; KW3902) Diahetes, MK-3245 Diabetes, MK-0431C mene _| (Ganuvia
Slide 23: Schering-Ploug
4 Schering-Ploug
Slide 24: Significant Financial Benefits
Significant Financial Benefits * Significant Accretion: Anticipated to be modestly accretive to non-GAAP EPS in first year following the close and significantly accretive thereafter — Synergies: Significant cost savings opportunities of incremental ~$3.5bn annually beyond 2011 — Investment: Enhance
Slide 25: Application of Merck's Plan to Win Across a Broader Platform
Application of Merck’s Plan to Win Across a Broader Platform Provides Opportunity for Margin Improvement . * Plan to leverage best practices at Merck Merck standalone 37% 2008 — Application of Merck’s Plan to Win across a broader platform — Consolidation of VYTORIN/ZETIA . Cholesterol JV inne 31% (2
Slide 26: Significant Cost Savings Opportunities
Significant Cost Savings Opportunities Annual cost savings expected to be achieved beyond 2011 $3.50 billion $5.95 billion $1.50 billion $950 million L] Merck 2008 Schering-Plough Transaction Combined annual program PTP initiative related cost savings incremental cost. beyond 2011 savings © MERCK 26
Slide 27: Transaction Financing & Structure
Transaction Financing & Structure Committed acquisition financing: — $3 billion 364-day bridge term loan Cash 49:8 Billion — $5.5 billion new and amended revolving Debt $8.5 Billion credit facilities * To be syndicated to bank market promptly after Merck Stock $22.8 Billion* public announcement of t
Slide 28: Superior Long-Term Financial Profile
Superior Long-Term Financial Profile ¢ EPS: Target high single-digit non-GAAP EPS’ compound annual growth rate from 2009? to 2013 — Assumes contribution from Animal Health business is reflected in Equity Income at 50% ¢ Pretax Margins: Target non-GAAP pretax margins’ of nearly 40% in 2013 ¢ Free Cas
Slide 29: Richard T. Clark
_ Richard T. Clark Chairman, President and CEO il —— Merck Schering-Ploug
Slide 30: Integration Process
Integration Process ¢ Merck’s integration team to be led by Adam Schechter, President, Global Pharmaceuticals * Schering-Plough’s integration team to be led by Brent Saunders, senior vice president and president, Consumer Health Care ¢ Similar culture and established working relationship will facili
Slide 31: Roadmap to Completion
Roadmap to Completion ¢« Complete S-4 filing ¢ Special meetings for Merck and Schering-Plough shareholder approval ¢ Receive regulatory approvals — Expiration of Hart-Scott-Rodino — European Commission Merger Regulation — Others such as Brazil and Japan ¢ Transaction expected to be completed in the
Slide 32: A Compelling Combination
ympelling Combination A Formula for Growth + Strong, complementary portfolio: Broadens scope of Merck commercial portfolio with leading franchises in key therapeutic areas — Schering-Plough products provide long-lived marketing exclusivity + Enhances R&D efforts and pipeline: Adds high potential ear
Slide 33: Schering-Ploug
Schering-Ploug