Merck & Company, Inc. · NYSE:MRK
Merck & — Q3 2020 Earnings Presentation
18 slides from Merck &'s earnings presentation, October 2020
Slide 1: Merck Q3 2020 Earnings
Merck Q3 2020 Earnings
Slide 2: Forward-looking statement of Merck & Co., Inc., Kenilworth, N.J., USA
Forward-looking statement of Merck & Co., Inc., Kenilworth, N.J., USA This presentation of Merck & Co., Inc., Kenilworth, 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. The
Slide 3: Q3 performance highlights
Q3 performance highlights • Invested $2.3B in research and development, making Created Delivered significant progress in advancing our pipeline, as well as shareholder $12.6B across our key growth pillars worldwide • Returned $1.5 billion to shareholders through dividends value sales +2% • Continued
Slide 4: Driving value for patients and shareholders by progressing our pipeline
Driving value for patients and shareholders by progressing our pipeline Regulatory milestones • In the U.S., the FDA granted priority review for KN-355 in TNBC, KN-2041 in 2L cHL, and Vericiguat in chronic heart failure; accepted the filing for KN-522 in TNBC; and granted breakthrough designation to
Slide 5: COVID-19 research efforts: oral antiviral candidate now in pivotal trials
COVID-19 research efforts: oral antiviral candidate now in pivotal trials Antiviral candidate Collaboration with Ridgeback Bio to develop molnupiravir (MK-4482) an orally available antiviral candidate in development for the treatment of patients with COVID-19. In preclinical studies, molnupiravir ha
Slide 6: COVID-19 research efforts: advancing two promising vaccine programs
COVID-19 research efforts: advancing two promising vaccine programs Vaccine candidates V591 V590 (measles virus vector) (rVSV) V591, a SARS-CoV-2 vaccine candidate that uses a V590, a SARS-CoV-2 vaccine candidate that uses a measles virus vector platform, has entered Phase 1 recombinant vesicular st
Slide 7: Oncology: continued strength across broad portfolio
Oncology: continued strength across broad portfolio +21% YOY • KEYTRUDA sales of $3.7B increased 21% year- over-year, reflecting continued leadership in lung and strong growth across the breadth of indications o In the U.S., sales of $2.2B driven by growth across all key tumor types, including conti
Slide 8: Vaccines: wellness visits recovering but at extended pace
Vaccines: wellness visits recovering but at extended pace • Vaccines sales were flat year-over-year, reflecting strong recovery from Q2 but wellness visits still below normal levels, particularly in the U.S. • GARDASIL sales of $1.2B decreased 10% year- -10% YOY over-year o In the U.S., sales declin
Slide 9: Hospital: improved hospital access and elective procedure volumes drive strong recovery
Hospital: improved hospital access and elective procedure volumes drive strong recovery • BRIDION sales of $320M increased 13% year-over-year driven by the recovery in +13% YOY elective surgical procedures and increased penetration of the reversal agent market • Ongoing launch of PREVYMIS drove 69%
Slide 10: Animal Health: strong growth across the portfolio
Animal Health: strong growth across the portfolio • Animal Health sales increased 12% to $1.2B • Companion Animal sales increased 18%, +12% YOY reflecting underlying demand for the BRAVECTO line of products and companion animal vaccines • Livestock sales increased 8%, reflecting growth in ruminants,
Slide 11: Return to growth across most global markets
Return to growth across most global markets Canada +4% Europe2 +7% +10% -11% United +1% States $343M China Japan +4% -6% Eastern Europe / Middle East Asia Pacific +4% Africa Global Latin pharmaceutical America sales +2%1 1. All growth rates exclude the impact of foreign exchange. 2. Europe primarily
Slide 12: Q3 2020 financial results summary: Delivering leverage in the P&L
Q3 2020 financial results summary: Delivering leverage in the P&L $ in billions, except EPS amounts Change Q3 2020 Q3 2019 Change Ex-FX Sales $12.6 $12.4 +1% +2% GAAP Gross Margin 72.3% 67.8% +5% +5% Non-GAAP Gross Margin2 74.8% 75.9% -1% -1% GAAP net income1 $2.9 $1.9 +55% +59% Non-GAAP net income
Slide 13: Updated full-year 2020 guidance
Updated full-year 2020 guidance Prior Guidance Updated Guidance Key Assumptions $47.2B - $48.7B $47.6B to $48.6B • Assumes ~1.5% negative FX impact Revenue +1% to +4% (+3% to +6% ex-FX) +2% to +4% (+3% to +5% ex-FX) • +8% to +10% ex-FX, ex-COVID Non-GAAP Gross Margin Rate1 ~75.0% ~75.0% • No change
Slide 14: Balanced approach to capital allocation
Balanced approach to capital allocation: Investing in the business and creating value for shareholders Commitment to the Dividend Capital Investments 2019 to 2023 +11% ~$20.0B Dollars per share $2.30 +15% $2.00 +2% Over 5 years, including expanding manufacturing +2% +2% $2.44 +11% +2% +2% capacity f
Slide 15: Merck has actively supplemented its pipeline and portfolio with strategic business development
Merck has actively supplemented its pipeline and portfolio with strategic business development Oncology Cardiovascular, Animal Health Neurosciences & Other Bolt-on acquisitions Strategic collaborations & licensing 15
Slide 16: Continued progress on the spinoff of Organon & Co.
Continued progress on the spinoff of Organon & Co. Significant progress continues to be made on the spinoff of Organon & Co. Continue to appoint talented and experienced leaders that will help drive Spinoff of Organon & Organon’s success as an independent company Co. expected to be completed in the
Slide 17: Creating long-term value for patients, employees and shareholders
Creating long-term value for patients, employees and shareholders Next 5 Years 5-10 Years 10+ Years Strong execution driving Rich pipeline addressing Revitalized discovery efforts and sustainable revenue growth, areas of high unmet need to increased expertise in biology to meaningful margin expansio
Slide 18: Continuing to make progress on our ESG commitments
Continuing to make progress on our ESG commitments Increasing access to health to advance Merck’s efforts to serve more patients • History of making medicines and vaccines accessible and affordable through responsible pricing practices • Implemented refreshed Access to Health Guiding Principles to e