Slide 1: Merck Q3 2024 Earnings
Merck Q3 2024 Earnings October 31, 2024
Slide 2: Agenda
Agenda Strategy and Business/Financial Research Question & Answer Business Update Results and Outlook Update 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: Delivered on our key strategic priorities in Q3 2024
Delivered on our key strategic priorities in Q3 2024 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 5
Slide 6: Strong Q3 underlying performance
Strong Q3 underlying performance1 Q3 Worldwide Sales Full Year Sales 70,000 GUIDANCE RANGE 60,000 $16.7B $59.3B $60.1B $63.6B - $64.1B $5.37 +22% +1% +6% - +7% 50,000 40,000 +4% 30,000 20,000 +7% ex-Exchange 2022 2023 2024 Q3 Non-GAAP EPS3 Full Year Non-GAAP EPS2 $1.57 $7.48 $1.51 GUIDANCE RANGE $7.
Slide 7: Advancing and broadening our diverse pipeline
Advancing and broadening our diverse pipeline Vaccines Oncology Infectious Disease Presented positive Phase 2b/3 Presented data for 10 Presented positive Phase 2 results for clesrovimab, & ACIP investigational or approved islatravir and lenacapavir voted to expand recommendation medicines at ESMO co
Slide 8: Business/Financial Results and Outlook
Business/Financial Results and Outlook Caroline Litchfield Chief Financial Officer
Slide 9: Strong Q3 worldwide sales growth
Strong Q3 worldwide sales growth Merck WORLDWIDE SALES1 Human Health Animal Health $16.7B +4% growth $14.9B +5% growth +8% ex-exchange2 $1.5B +6% growth +11% ex-exchange2 +7% ex-exchange2 1. Worldwide Sales includes Other Revenue. 2. ~2 percentage points of the negative impact of foreign exchange fo
Slide 10: Oncology: KEYTRUDA continues to drive exceptional growth
Oncology: KEYTRUDA continues to drive exceptional growth • KEYTRUDA sales of $7.4B increased 21%1 year-over-year, driven by uptake in earlier stage cancers and continued robust global demand from metastatic indications – In the U.S., growth reflects increased use in $5.3B resectable NSCLC, as well a
Slide 11: Oncology: Updates across broad portfolio
Oncology: Updates across broad portfolio $299M $337M $284M +6% +13% • Lynparza1 sales grew 13%, driven primarily +23% by increased global demand • Lenvima2 sales declined 4%, driven primarily 3Q22 3Q23 3Q24 by timing of shipments last year $260M $251M • WELIREG sales more than doubled, driven $202M
Slide 12: Vaccines: Broad vaccines portfolio having significant patient impact
Vaccines: Broad vaccines portfolio having significant patient impact • GARDASIL sales of $2.3B decreased 10% year-over-year, driven by a decline in China $2.6B $2.3B +16% $2.3B – In the U.S., sales benefitted from CDC +20% -10% purchasing patterns, as well as price and demand – Ex-U.S. sales increas
Slide 13: Cardiovascular: Continued successful launch of WINREVAIR
Cardiovascular: Continued successful launch of WINREVAIR • ~1,700 new patients prescribed in the quarter Patients • >3,700 total patients prescribed since launch • ~80% of prescribed patients receive commercial product • >2,600 commercial patients started treatment since launch • ~10,000 total presc
Slide 14: Animal Health: Strong growth across companion animal and livestock
Animal Health: Strong growth across companion animal and livestock • Animal Health sales increased 11%1 to $1.5B – Companion Animal grew 17%, driven by uptake from new product launches and price – Livestock sales grew 7%, driven by higher demand for poultry and swine products, the $1.5B inclusion of
Slide 15: Q3 2024 non-GAAP financial results summary
Q3 2024 non-GAAP financial results summary1 $ in billions, except EPS amounts Change Q3 2024 Q3 2023 Change Ex-FX Sales $16.7 $16.0 +4% +7% Non-GAAP Gross Margin 80.5% 77.0% +3.5pts +3.4pts Non-GAAP Operating Expenses $8.5 $5.8 +48% +49% Non-GAAP Tax Rate 21.9% 15.0% +6.9pts N/A Non-GAAP EPS2,3 $1.5
Slide 16: Updated 2024 financial outlook
Updated 2024 financial outlook Prior Guidance Updated Guidance Key Assumptions • Assumes ~3 percentage point FX headwind (no change) Revenue $63.4B to $64.4B $63.6B to $64.1B • Implies growth of 6% to 7% Non-GAAP Gross Margin Rate ~81.0% ~81.0% Non-GAAP • Now includes $750 million one-time charge re
Slide 17: Remain committed to balanced capital allocation strategy
Remain committed to balanced capital allocation strategy Q3 Spend ($ in billions)1 Capital allocation order of priority Continue to invest in the pipeline and business while augmenting the pipeline $3.1 $3.2 with value-enhancing business development $2.0 $0.8 $0.4 After-Tax R&D 2 CapEx Dividends Bus
Slide 18: Research Update
Research Update Dr. Dean Li President, Merck Research Laboratories
Slide 19: Important updates across our vaccines, immunization and infectious disease programs
Important updates across our vaccines, immunization and infectious disease programs Pneumococcal RSV HIV • CDC’s ACIP voted in favor of • Presented results at IDWeek • Presented results at IDWeek expanding the age-based from Phase 2b/3 trial evaluating from Phase 2 trial evaluating recommendation fo
Slide 20: Extensive ongoing Phase 3 clinical development program for KEYTRUDA-based regimens
Extensive ongoing, Phase 3 clinical development program for KEYTRUDA-based regimens in earlier stages of cancer1 Esophageal Head & Neck KN-975 KN-689 9 FDA approved indications Lung Breast KN-091 KL-012 INTerpath-002 KN-671 KL-013 INTerpath-009 KN-242 KN-522 KV-006 TroFuse-019 TroFuse-012 KN-756 4 D
Slide 21: Broadening the impact of KEYTRUDA
Broadening the impact of KEYTRUDA Recent Approvals ESMO • KEYNOTE-483: FDA approved KEYTRUDA in combination with pemetrexed and platinum • Three presentations for KEYTRUDA U.S. chemotherapy for 1L treatment of adult patients with unresectable advanced or metastatic showcased during Presidential Symp
Slide 22: Continuing to advance our broader oncology program with BD
Continuing to advance our broader oncology program with BD Exelixis Daiichi Sankyo • Announced clinical development collaboration with • Initiated Phase 3 IDeate-Lung02 trial evaluating I-DXd, Exelixis to evaluate investigational tyrosine kinase a B7-H3 directed antibody drug conjugate, for inhibito
Slide 23: Executing on our broader pipeline
Executing on our broader pipeline Cardiometabolic Immunology Ophthalmology • Received EC approval for • Presented 50-week efficacy and • Initiated Phase 2b/3 BRUNELLO WINREVAIR which has safety data for tulisokibart, a trial for MK-3000, an potential to transform the TL1A inhibitor, from Phase 2 inv
Slide 24: Q&A
Q&A Rob Davis Chairman & Chief Executive Officer Caroline Litchfield Chief Financial Officer Dr. Dean Li President, Merck Research Laboratories Peter Dannenbaum Senior Vice President, Investor Relations
Slide 25: Appendix
Appendix 25
Slide 26: Q3 2024 GAAP financial results summary
Q3 2024 GAAP financial results summary $ in billions, EPS amounts Q3 2024 Q3 2023 Change Change Ex-FX Sales $16.7 $16.0 +4% +7% Operating Expenses $8.6 $5.8 +47% +49% Tax Rate 22.7% 15.5% +7.2pts N/A GAAP EPS1 $1.24 $1.86 -33% -30% 26 1. 3Q24 GAAP results include a net charge of $0.79 per share for
Slide 27: Capital allocation: Trailing twelve months
Capital allocation: Trailing twelve months Over the past 12 months Order of priority Well-positioned balance sheet $15 $12 $11.7 with capacity to fund Billions $9 $10.1 additional value-enhancing $6 $7.7 business development $3 $3.4 $1.2 opportunities $0 After-Tax R&D 1 CapEx Dividends Paid Business
Slide 28: 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 approved: Announced: o KEYTRUDA in combination with pemetrexed and platinum chemothera
Slide 29: 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 Oncology Oncology MK-1022 (patritumab MK-2400 (ifinatamab MK-4280A LYNPARZA MK-1022 (patritumab deruxtecan)4 KEYTRUDA (MK-3475) KEYTRUDA (MK-3475) deruxtecan)4 deruxtecan)4 (fave