Merck & Company, Inc. · NYSE:MRK
Merck & — Q4 2024 Earnings Presentation
35 slides from Merck &'s earnings presentation, Feb 4, 2025
Slide 1: Merck Q4 2024 Earnings
Merck Q4 2024 Earnings February 4, 2025
Slide 2: Agenda
Agenda Strategy and Business Financial Results and Research Update Question & Answer Update Outlook Session Rob Davis Caroline Litchfield Dr. Dean Li Chairman and Chief Chief Financial Officer President, Merck Executive Officer Research Laboratories 2
Slide 3: Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA
Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA This presentation of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These state
Slide 4: Strategy and Business Update
Strategy and Business Update Rob Davis Chairman and Chief Executive Officer
Slide 5: Nearly half a billion people reached with our medicines
Committed to saving and improving lives around the world Nearly half a billion people reached with our medicines and vaccines in 2024 5
Slide 6: Delivered on our key strategic priorities
Delivered on our key strategic priorities Advanced the pipeline to meet patient unmet need Executed on strategic business development to augment pipeline Achieved strong commercial and financial performance Created long-term value for patients and shareholders 6
Slide 7: 2024 performance and 2025 initial guidance
2024 performance1 and 2025 initial guidance Q4 Worldwide Sales Full Year Sales 70,000 GUIDANCE RANGE 60,000 $60.1B $64.2B $59.3B $64.1B - $65.6B $15.6B +7% 50,000 +22% +1% +0% - +2% $5.37 40,000 30,000 20,000 +7% 10,000 0 +9% ex-Exchange 2022 2023 2024 2025 Q4 Non-GAAP EPS4 Full Year Non-GAAP EPS2,3
Slide 8: Update on GARDASIL in China
Update on GARDASIL in China • Market dynamics remain challenging • Temporarily pausing shipments beginning in February through at least mid-year to accelerate inventory reduction • Expect strong growth in 2H25, 2026 and 2027, irrespective of GARDASIL in China Confidence in ability to successfully na
Slide 9: Advancing and broadening our diverse pipeline
Advancing and broadening our diverse pipeline Infectious Disease Oncology Cardiometabolic • FDA acceptance of BLA for • Positive topline results for • Positive topline results for clesrovimab to help protect subcutaneous pembrolizumab WINREVAIR from ZENITH trial infants from RSV • Licensed MK-2010,
Slide 10: Evolving to a more diversified commercial portfolio with robust Phase 3 development program
Evolving to a more diversified commercial portfolio with robust Phase 3 development program 2024-2025 2026-2027 2028+ MK-3000 patritumab deruxtecan1 bomedemstat MK-10844 Tetravalent tri-specific HER3 ADC LSD1i KRAS G12Ci antibody clesrovimab ifinatamab deruxtecan1 nemtabrutinib opevesostat RSV mAb B
Slide 11: Expanding diverse pipeline to drive patient impact and value creation
Expanding diverse pipeline to drive patient impact and value creation Updated Opportunity1 Infectious Disease / Vaccines Oncology >$25B • Including clesrovimab, V181 and others + Animal Health Cardiometabolic ~$15B • Expect revenue to more than double by the mid-2030s Immunology >$5B Early-Phase Pro
Slide 12: Business/Financial Results and Outlook
Business/Financial Results and Outlook Caroline Litchfield Chief Financial Officer
Slide 13: Strong Q4 and 2024 worldwide sales growth
Strong Q4 and 2024 worldwide sales growth Q4 2024 WORLDWIDE SALES1 $15.6B Merck +7% growth +9% ex-Exchange2 FULL YEAR WORLDWIDE SALES1 $64.2B +7% growth Human Health $14.0B Animal Health $1.4B +10% ex-Exchange2 +7% growth +9% growth +8% ex-Exchange2 +13% ex-Exchange2 1. Worldwide Sales includes Othe
Slide 14: Oncology: KEYTRUDA continues to grow globally
Oncology: KEYTRUDA continues to grow globally • KEYTRUDA sales of $7.8B increased 21%1, driven by continued robust global demand from metastatic indications and uptake from earlier stage cancers – In the U.S., growth reflects increased uptake from $5.3B KN-A39 in locally advanced or metastatic +30%
Slide 15: Oncology: Strength across broad portfolio
Oncology: Strength across broad portfolio $72M $160M $40M +78% +123% • WELIREG sales more than doubled, driven by +245% increased uptake in certain adult patients with previously treated advanced RCC in the U.S. 4Q22 4Q23 4Q24 • Lynparza1 sales grew 18%, primarily due to higher global demand $365M $
Slide 16: Vaccines: Broad vaccines portfolio driving global impact
Vaccines: Broad vaccines portfolio driving global impact • GARDASIL sales of $1.6B decreased 18%, driven by lower demand in China $1.9B – In the U.S., sales benefitted from price and $1.5B +27% $1.6B demand, partially offset by CDC purchasing +6% -18% patterns – Outside the U.S. and China, double di
Slide 17: Cardiovascular: Successful ongoing launch of WINREVAIR
Cardiovascular: Successful ongoing launch of WINREVAIR Patients • ~1,500 new patients prescribed in the quarter • ~5,200 total patients prescribed since launch • ~80% of prescribed patients receive commercial product • >22,000 total prescriptions filled since launch Prescribers U.S. • >900 physician
Slide 18: Animal Health: Strong growth across livestock and companion animal
Animal Health: Strong growth across livestock and companion animal • Animal Health sales increased 13%1 to $1.4B – Livestock sales grew 14%, driven by higher demand for poultry products, inclusion of sales from the recently expanded aqua portfolio, and price – Companion Animal sales growth of 10% re
Slide 19: Q4 2024 non-GAAP financial results summary
Q4 2024 non-GAAP financial results summary1 $ in billions, except EPS amounts Change Q4 2024 Q4 2023 Change Ex-FX Sales $15.6 $14.6 +7% +9% Non-GAAP Gross Margin 80.8% 77.2% +3.6pts +3.3pts Non-GAAP Operating Expenses $7.4 $11.6 -36% -36% Non-GAAP Tax Rate 16.2% 114.2% N/M N/A Non-GAAP EPS2,3 $1.72
Slide 20: Initial 2025 financial outlook
Initial 2025 financial outlook Guidance Key Assumptions • Assumes ~2 percentage point FX headwind • Implies +0% to +2% nominal (+2% to +4% ex-FX) Revenue $64.1B to $65.6B • Assumes no further shipments of GARDASIL to China at the low-end and less than $1B at the high-end Non-GAAP Gross Margin Rate ~
Slide 21: Key modeling considerations
Key modeling considerations • Expect to benefit from continued strength in Oncology and Animal Health, as well as Sales contributions from new product launches • Expect roughly flat YoY revenues in 1H25 and strong YoY growth in 2H25 • Withdrawing $11B target given uncertain timing of economic recove
Slide 22: Remain committed to balanced capital allocation strategy
Remain committed to balanced capital allocation strategy Q4 Spend ($ in billions)1 Capital allocation order of priority Continue to invest in the pipeline and business while augmenting the pipeline $3.2 with value-enhancing business development $2.0 $0.9 $0.5 $0.2 After-Tax R&D 2 CapEx Dividends Bus
Slide 23: Research Update
Research Update Dr. Dean Li President, Merck Research Laboratories
Slide 24: Important updates from across our cardiometabolic pipeline
Important updates from across our cardiometabolic pipeline WINREVAIR MK-4082 Foundational study supported initial regulatory approval for • Entered exclusive global license agreement WINREVAIR as first-in-class treatment for PAH with Hansoh to develop preclinical oral ‒ Submitted for approval in Jap
Slide 25: Building on our strong legacy in infectious disease and vaccines
Building on our strong legacy in infectious disease and vaccines RSV HIV Vaccines • FDA set PDUFA date of June 10th • Announced topline results from • GARDASIL approved in China for for clesrovimab, investigational two Phase 3 trials evaluating males 9 to 26 years old to help long-acting monoclonal
Slide 26: Strengthening our leadership in oncology
Strengthening our leadership in oncology Regulatory Developments Subcutaneous pembrolizumab • Fixed dose pembrolizumab + • KN-671: NMPA approved KEYTRUDA regimen1 for neoadjuvant and adjuvant treatment for certain patients with resectable NSCLC berahyaluronidase alfa in combination with chemotherapy
Slide 27: Significant progress across our broad pipeline in 2024
Significant progress across our broad pipeline in 2024 >20 Phase 3 studies initiated across multiple therapeutic areas “One Pipeline” Complementing internal innovation and discovery efforts with the best external science through business development Regulatory approvals in major to advance breakthro
Slide 28: Select milestones in 2025
Select milestones in 2025 Medical Meeting Presentations Upcoming Data Readouts Cardiometabolic • WINREVAIR - Phase 3 ZENITH study in PAH at • Enlicitide decanoate – Phase 3 studies in American College of Cardiology 2025 hypercholesterolemia Infectious Disease ‒ CORALreef HeFH (PCD in April) • Islatr
Slide 29: Q&A
Q&A Rob Davis Chairman and Chief Executive Officer Caroline Litchfield Chief Financial Officer Dr. Dean Li President, Merck Research Laboratories Peter Dannenbaum Senior Vice President, Investor Relations
Slide 30: Appendix
Appendix MERCK 2°
Slide 31: Q4 2024 GAAP financial results summary
Q4 2024 GAAP financial results summary $ in billions, EPS/LPS amounts Q4 2024 Q4 2023 Change Change Ex-FX Sales $15.6 $14.6 +7% +9% Operating Expenses1 $7.4 $12.4 -40% -40% Tax Rate 10.2% 40.1% N/M N/A GAAP Earnings / $1.48 ($0.48) >100% >100% (Loss) per Share1 1. 4Q24 GAAP results include a charge
Slide 32: 2024 GAAP financial results summary
2024 GAAP financial results summary $ in billions, EPS amounts 2024 2023 Change Change Ex-FX Sales $64.2 $60.1 +7% +10% Operating Expenses $28.8 $41.0 -30% -29% Tax Rate 14.1% 80.0% N/M N/A GAAP $6.74 $0.14 >100% >100% Earnings per Share 32
Slide 33: Capital allocation: Trailing twelve months
Capital allocation: Trailing twelve months Over the past 12 months Order of priority $15 Well-positioned balance sheet $12 $12.1 with capacity to fund Billions $9 additional value-enhancing $6 $7.8 business development $3 $3.4 $4.7 $1.3 opportunities $0 After-Tax R&D 1 CapEx Dividends Paid Business
Slide 34: Driving value for patients and shareholders by progressing our pipeline
Driving value for patients and shareholders by progressing our pipeline Key regulatory milestones since the last earnings call: Key data & clinical advancements since the last earnings call: • In the U.S., the FDA: Announced: o Accepted for priority review the sNDA for WELIREG for the treatment of a
Slide 35: Broad and innovative pipeline to address significant unmet medical needs
Broad and innovative pipeline to address significant unmet medical needs Phase 2 Phase 3 Under regulatory review Oncology Cardiometabolic Oncology Oncology MK-1022 (patritumab deruxtecan)1 KEYTRUDA (MK-3475) MK-2060 MK-1022 (patritumab deruxtecan)1 KEYTRUDA (MK-3475) KEYTRUDA (MK-3475) Biliary Advan