Merck & Company, Inc. · NYSE:MRK
Merck & — Investor Day (May 2014)
133 slides from Merck &'s investor day presentation, May 6, 2014
Slide 1: Merck Investor Briefing May 6, 2014
Merck Investor Briefing May 6, 2014
Slide 2: Forward-Looking Statement
This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant ri
Slide 3: No Duty to Update
No Duty to Update The information contained in the presentation set forth below was current as of May 6, 2014. While this presentation remains on the company’s website the company assumes no duty to update the information to reflect subsequent developments. Consequently, the company will not update
Slide 4: Merck Investor Briefing 2014 Agenda
Merck Investor Briefing 2014 Agenda CEO Perspective Ken Frazier Merck Research Laboratories Roger M. Perlmutter Global Human Health Adam H. Schechter New Launches Roger M. Perlmutter and Adam H. Schechter Suite of Opportunities Roger M. Perlmutter and Adam H. Schechter Break Harnessing Immune Mechan
Slide 5: CEO Perspective
CEO Perspective Ken Frazier Chairman and Chief Executive Officer
Slide 6: Merck Has the Right Strategy to Drive Growth and Productivity
Merck Has the Right Strategy to Drive Growth and Productivity New, Focused Model Suite of Opportunities Harnessing Immuno-Oncology
Slide 7: Merck Has the Right Strategy: New, Focused Model
• New Management Team • Greater Integration of GHH and MRL • Investing Behind the Best Sources of Growth • Execution of Key Strategic Initiatives Merck Has the Right Strategy to Drive Growth and Productivity New, Focused Model Suite of Opportunities Harnessing Immuno-Oncology
Slide 8: Consumer Care Sale to Bayer and CV Collaboration
• New Management Team • Greater Integration of GHH and MRL • Investing Behind the Best Sources of Growth • Execution of Key Strategic Initiatives Merck Has the Right Strategy to Drive Growth and Productivity New, Focused Model Suite of Opportunities Harnessing Immuno-Oncology Announced the Sale of C
Slide 9: Suite of Opportunities and Launches
• Numerous Launches Planned in 2014 and 2015 • Launching into Large Markets with Unmet Needs • Opportunities in Immuno-Oncology and HCV • Leveraging Global Presence to Accelerate Growth Merck Has the Right Strategy to Drive Growth and Productivity New, Focused Model Suite of Opportunities Harnessing
Slide 10: Harnessing Immuno-Oncology: MK-3475
• MK-3475 File Accepted; Granted Priority Review • Unprecedented Execution to File MK-3475 • Growing Utility in Multiple Tumor Types • Building Partnerships and Collaborations • Expanding Into Combination Therapy Merck Has the Right Strategy to Drive Growth and Productivity Harnessing Immuno-Oncolog
Slide 11: What Merck Has Delivered in the Past Years
What Merck Has Delivered in the Past 2 Years Launched new, focused model Successfully defended key franchises vs competition Executing the development program of MK-3475 Filed numerous NMEs with regulatory authorities Generated strong free cash flow Returned an industry-leading amount of
Slide 12: Our Intention: Premier Research-Driven Biopharmaceutical Company
Our Intention… To Be the Premier Research-Driven Biopharmaceutical Company − Bring innovation to patients and physicians − Invest in key areas to address unmet need − Access the best external science − Grow EPS off the 2014 base − Industry-leading return of capital to shareholders To deliver superio
Slide 13: Merck Research Laboratories
Merck Research Laboratories Roger M. Perlmutter Executive Vice President and President Merck Research Laboratories
Slide 14: Welcome to MRL-Boston
Welcome to MRL-Boston & merck Be well
Slide 15: What We Will Cover Today
What We Will Cover Today • Guiding principles for Merck research • Progress in new drug registration and filings • Advancement in late stage development • Specific areas of interest: – Novel, direct-acting antiviral therapy for HCV – Progress in development of improved HIV regimens – New opportuniti
Slide 16: MRL: Our Legacy Matters
MRL: Our Legacy Matters • Over decades MRL has built an enviable reputation for discovering, developing and registering breakthrough therapeutics • Our strengths in fundamental research provide a meaningful substrate for future growth • During the past year, we have sharpened our focus on programs t
Slide 17: MRL: Fundamental Principles Guiding Our Organization
MRL: Fundamental Principles Guiding Our Organization • Our Mission: To translate research breakthroughs into meaningful new therapeutics and vaccines • Our Aspiration: To become the premier, research-intensive biopharmaceutical organization in the world • Four maxims underlie our approach: – Great d
Slide 18: 2014: Largest Number of Merck NME Approvals in US in a Decade
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ZOLINZA ISENTRESS EMEND IV SAPHRIS VICTRELIS ZIOPTAN GRASTEK JANUVIA RAGWITEK ZOSTAVAX ZONTIVITY ROTATEQ MK-3475 GARDASIL V503 Suvorexant Achieved Anticipated 2014: The Largest Number of Merck New Molecular Entities Approved in the United States in M
Slide 19: Other Filings Expected in the Near Term
. . .with Other Filings Expected in the Near Term • Sugammadex – Repeat hypersensitivity study nearly complete – Complete response to be submitted in 2H 2014 • Odanacatib – Filing in 2H 2014 – Complete data to be presented at major scientific meetings later this year
Slide 20: Odanacatib Phase 3 Trial: Five-Year Blinded Efficacy Data
Blinded: Placebo Blinded: Placebo A ll c o nt in u in g p a ti e n ts c o mp lete 4 y e a rs DEC 2013 L e a d C o h or t E nrol lment B e g a n SEPT 2007 M ain C o h or t E nrol lment B e g a n FEB 2009 1 s t E xten s io n E nrol lment B e g a n JULY 2012 2 n d E xten s io n E nrol lment B e g a n J
Slide 21: Insights from the Odanacatib Phase 3 Fracture Study
Insights from the Odanacatib Phase 3 Fracture Study • Substantially reduced risk of osteoporotic fractures, including vertebral, non-vertebral and hip fractures, in the odanacatib treatment group • Fracture risk reduction associated with once-weekly odanacatib was robust and sustained • Adverse expe
Slide 22: Many Attractive New Programs in Phase 3 Trials
Beyond Current and Anticipated Filings, We Have Many Attractive New Programs in Phase 3 Trials • Omarigliptin (Once-weekly DPP-4) • Ertugliflozin (SGLT2 Inhibitor) • Inactivated VZV vaccine • MK-5172/MK-8742 (Hepatitis C) • Anacetrapib • BACE Inhibitor • House dust mite tolerogen • Doravirine (MK-14
Slide 23: Global Human Health
Global Human Health Adam H. Schechter Executive Vice President and President Global Human Health
Slide 24: GHH Made Clear Choices to Deliver on Our Mission
GHH Made Clear Choices to Deliver on Our Mission and Win… • We are focusing even more explicitly on: Therapeutic areas where payers will pay for innovation Top global and local customers Markets with the greatest opportunities Obtaining and maintaining prices Preparing for launches
Slide 25: Focus: Areas That Give Us a Strong Platform for Growth
Total deaths from diabetes are projected to increase by 50% in the next 10 years Antibiotic-resistant bacteria infects over 2 million Americans annually, resulting in 23,000 deaths ACUTE CARE HOSPITAL DIABETES Cervical cancer is the second most common cancer in women worldwide VACCINES Every year, 8
Slide 26: Focus: Priority Markets
Focus: Priority Markets Where We Have the Greatest Opportunities TEN MARKETS = ~70% of Merck Revenue
Slide 27: Focus: Innovative Ways to Drive Growth in Other Markets
Focus: Innovative Ways to Drive Growth in Other Markets New Technology Example
Slide 28: Operational Clusters Maximize Regional Efficiencies
Focus: Innovative Ways to Drive Growth in Other Markets Operational Clusters Maximize Regional Efficiencies Example
Slide 29: Focus: Our Top Customers
~50 Top Global Customers Focus: Our Top Customers
Slide 30: Focus: Our Top Customers - 1.4 Million Customers
Focus: Our Top Customers 1.4 Million Merck Customers Top 50 Customers Expected to Be 50% of 2016 Merck Revenue
Slide 31: Cold Chain Supply Solution for Drugs and Vaccines
Focus: Our Top Customers Cold Chain Supply Solution for Drugs and Vaccines Example
Slide 32: Physician Education Through Univadis
Focus: Our Top Customers Physician Education in Primary Care Through Univadis Example
Slide 33: New Launches
New Launches Adam H. Schechter Executive Vice President and President Global Human Health Roger M. Perlmutter Executive Vice President and President Merck Research Laboratories
Slide 34: Merck Has Many Potential Near-Term Launches
Merck Has Many Potential Near-Term Launches Immuno-Oncology – MK-3475 (Anti-PD-1) for advanced melanoma Insomnia – Suvorexant Cardiovascular – ZONTIVITY (vorapaxar) Vaccines – V503 for HPV-related cancers Allergy Immunotherapy – GRASTEK and RAGWITEK Hepatitis C Virus – Vaniprevir, filed in Japan Hos
Slide 35: Merck Has Many Potential Near-Term Launches
Merck Has Many Potential Near-Term Launches Immuno-Oncology – MK-3475 (Anti-PD-1) for advanced melanoma Insomnia – Suvorexant Cardiovascular – ZONTIVITY (vorapaxar) Vaccines – V503 for HPV-related cancers Allergy Immunotherapy – GRASTEK and RAGWITEK Hepatitis C Virus – Vaniprevir, filed in Japan Hos
Slide 36: Suvorexant: A Novel MOA in an Unsatisfied Market
Suvorexant: A Novel MOA in an Unsatisfied Market • 10 billion annual doses globally – 50% chronic use • Many patients seek a new sleep aid • Vast Tier 3 coverage • Filed in US and Japan Source: IMS Lifestyle Modification 13 Do Nothing 9 OTC/Herbal 38 ~70mm Patients in US Blue box does not show up on
Slide 37: ZONTIVITY: A Novel MOA in an Unsatisfied Market
ZONTIVITY: A Novel MOA in an Unsatisfied Market • Significant long-term risk of thrombotic events remains • First and only PAR-1 antagonist • Under review in US for post-MI or PAD patients without history of stroke or mini-stroke (TIA) • Relative risk reduction of 17% in these patients when added to
Slide 38: GRASTEK and RAGWITEK: New Options in Allergy Immunotherapy
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC GRASTEK and RAGWITEK New Options in Allergy Immunotherapy • ~12 million moderate/severe allergy sufferers in US sensitized to these pollens • ~3 million allergy sufferers receive immunotherapy shots, but ~50% drop off within 12 months • ~3 million refuse s
Slide 39: Odanacatib: A Novel MOA in an Unsatisfied Market
Odanacatib: A Novel MOA in an Unsatisfied Market • ~200 million women worldwide • 9 million fractures per year • In US alone, annual economic burden may exceed $25 billion by 2025 • 25%-30% of patients cannot tolerate bisphosphonates • Physicians/patients seek alternatives • Anticipate Tier 3 covera
Slide 40: Suite of Opportunities
Suite of Opportunities Adam H. Schechter Executive Vice President and President Global Human Health Roger M. Perlmutter Executive Vice President and President Merck Research Laboratories
Slide 41: Vaccines: We Are a Leader
Vaccines: We Are a Leader • MRK ranked #1 in global sales • Broad portfolio • GARDASIL $1.8 billion sales in 2103/14% growth2 – 86% global share • ZOSTAVAX $0.8 billion sales in 2013/17% growth2 1Excludes SPMSD joint venture sales 2 Excluding foreign exchange Merck Vaccine Sales1 +14% CAGR 2010 2013
Slide 42: V503: HPV Vaccine Designed for Broader Protection
V503: HPV Vaccine Designed for Broader Protection • 530,000 cervical cancer cases • Second most common cancer in women 15 to 44 years of age • ~85% in developing regions • $7 billion spent in US on screening & follow-up V503: Filed in US & EU • Significant opportunity in Emerging Markets • Increasin
Slide 43: HIV: ISENTRESS Remains a Strong Choice
HIV: ISENTRESS Remains a Strong Choice • Maintaining TRx in face of new competition • Maintains highest share in naive patient starts • Exciting opportunity with QD • Despite effective therapy, need remains 0 50,000 100,000 150,000 200,000 250,000 ISENTRESS US TRx Volume Source: IMS 0.00% 25.00% 50.
Slide 44: HIV: Efficacy Is Linked to Adherence
HIV: Efficacy Is Linked to Adherence Convenience and Tolerability Are Critical HIV therapy is lifelong and requires high rates of adherence – neither the virus nor the regimens are forgiving HIV ARVs are associated with frequent safety, tolerability, and DDI challenges – Renal, CV, CNS, bone, and di
Slide 45: HIV: Unmet Medical Needs
1,178,350 941,950 725,302 480,395 426,590 328,475 0% 20% 40% 60% 80% 100% 120% HIV- infected HIV- diagnosed Linked to HIV care Retained in HIV care On ART Suppressed viral load (≤200 copies/mL) P e rc entag e Engagement in HIV Care 0 20 40 60 80 100 HIV: Unmet Medical Needs Access and Effective Trea
Slide 46: HIV: Merck Is Committed to HIV Treatment
HIV: Merck Is Committed to HIV Treatment • Merck has pioneered highly effective anti-retroviral therapy – Indinavir (1996) – Efavirenz (1998) – Raltegravir (2007) • ISENTRESS (raltegravir), administered twice daily, is the leading integrase inhibitor • Recent data from the AIDS Clinical Trials Group
Slide 47: HIV: ISENTRESS Comparative Efficacy and Tolerability, A5257
HIV: ISENTRESS Comparative Efficacy and Tolerability Results of the A5257 AIDS Clinical Trials Group Study • Randomized open-label trial among 1,814 HIV-1 infected, treatment- naïve adults comparing three regimens: – Atazanavir/Ritonavir + TRUVADA (N = 605) – ISENTRESS + TRUVADA (N = 603) – Darunavi
Slide 48: HIV: ACTG 5257 Cumulative Incidence of Failure
HIV: ACTG 5257 Trial: Cumulative Incidence of Virologic or Tolerability Failure (Leading to Switch) A. Atazanavir/Ritonavir + TRUVADA (N = 605) B. ISENTRESS + TRUVADA (N = 603) C. Darunavir/Ritonavir + TRUVADA (N = 601) 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0 16 32 48 64 80 96 112 1
Slide 49: HIV: Merck's Pipeline for Long-Term Efficacy
HIV: Merck’s Pipeline is Designed to Improve Long-Term Efficacy for HIV-Infected Patients • Near/Mid-Term: improve overall efficacy by improving safety/tolerability • Long-Term: transformational approaches to HIV eradication Non-nucleoside reverse- transcriptase inhibitor Phase 2 QD ISENTRESS Doravi
Slide 50: HIV: Considerations in Developing New NNRTIs
HIV: Considerations in Developing New Non-Nucleoside Reverse- Transcriptase Inhibitors (NNRTIs) • Potency, half-life, and physical properties of NNRTIs are highly suited to QD fixed-dose regimens • However, novel structures with desirable attributes are rare – Over twenty years of chemistry • Many c
Slide 51: HIV: Doravirine plus TRUVADA in Phase 2 Trials
HIV: Doravirine plus TRUVADA Effective in Controlling HIV Infection in Phase 2 Trials Number of Contributing Patients Doravirine all doses 166 166 165 165 163 165 Efavirenz 42 42 42 42 41 42 Protocol 007 Part I Percent of Patients with HIV RNA < 40 Copies/mL NC=F Approach 76% 64% 0 20 40 60 80 100 0
Slide 52: HIV: Doravirine Builds on Strong Foundation
HIV: Doravirine Builds on a Strong Foundation of Anti-Retroviral Therapy • Deep understanding of non-nucleoside reverse transcriptase inhibitors • Long history of clinical trials in HIV-infected patients • Opportunities exist to create cost-effective regimens in combination with potent, generic agen
Slide 53: Anti-Virals: Leading Programs Addressing Substantial Needs
Anti-Virals: Merck Has Developed Leading Programs that Address Substantial Needs • Human Papilloma Virus Vaccine (V503) • Human Immunodeficiency Virus • Human cytomegalovirus prophylaxis and treatment • Inactivated Varicella Virus Vaccine • Hepatitis C Virus
Slide 54: HCV: Fast-Growing Market With High Unmet Need
HCV: Fast-Growing Market With High Unmet Need • In US, 3.2 million people with chronic HCV – 50% diagnosed – ~170,000 – 200,000 cured – >450,000 may get insurance between 2014 and 2020 • Without changes to historical diagnosis and treatment paradigm, annual medical costs expected to rise to $85 bill
Slide 55: HCV: Therapies Advanced on a Broad Front
HCV: Our HCV-specific Therapies Have Advanced on a Broad Front • PEG-INTRON: interferon-based therapy • VICTRELIS: first-generation protease inhibitor • MK-7009: novel, first-generation protease inhibitor undergoing priority review in Japan • MK-5172: second-generation protease inhibitor with high b
Slide 56: HCV: Opportunities for Improved Therapies
HCV: Opportunities for Improved Therapies Efficacy: >90% SVR Safety: No significant AEs Convenience: One pill, once daily Duration: ≤12 weeks Affordability: Cost-effective
Slide 57: HCV: MK-5172/MK-8742 Regimen Properties
HCV: Our MK-5172/MK-8742 Regimen Has Desirable Properties for Curative Treatment of HCV Infection MK-5172 Highly Potent HCV Protease Inhibitor MK-8742 Highly Potent HCV NS5A Inhibitor MK-5172/MK-8742 Fixed Dose Combination Tablet Highly potent against key genotypes Not affected by viral mutation
Slide 58: HCV: MK-5172/MK-8742 Tested Across Full Spectrum of Patients
HCV: MK-5172/MK-8742 Has Been Tested Across the Full Spectrum of HCV-Infected Patients C-WORTHy (Phase 2b): • MK-5172/MK-8742 once daily, with or without twice-daily ribavirin • 471 subjects with Genotype 1 infection • 8 or 12 weeks of therapy for easier-to-cure patients • 12 or 18 weeks of therapy
Slide 59: HCV: Similar Responses Irrespective of Prior Response
HCV: MK-5172/MK-8742 Treatment Yields Similar Responses Irrespective of Prior Response to Other Therapies 94 99 94 94 100 100 0 10 20 30 40 50 60 70 80 90 100 All G1a patients All G1b patients TN Cirrhotics G1a Null Cirrhotics G1a TN Cirrhotics G1b Null Cirrhotics G1b % P a tients HCV R N A <25 IU/m
Slide 60: HCV: Efficacy Across Treatment Categories
HCV: Efficacy of MK-5172/MK-8742 Demonstrated in HCV Patients Irrespective of Treatment Category (Interim ITT Analysis) Population MK-5172/MK-8742 + R 12 weeks MK-5172/MK-8742 (no R) 12 weeks G1-Infected Subjects 166/177 (94%) 127/135 (94%) By Cirrhosis Status Non-Cirrhotic HIV/HCV co-infected HCV m
Slide 61: HCV: Safety Summary from C-WORTHy Interim Analysis
HCV: Safety Summary for MK-5172/MK-8742 in Hard-to-Cure Patients from the C-WORTHy Interim Analysis (ITT Data) Treatment-naïve + Cirrhosis PR-Null ± Cirrhosis Parameter All Patients n = 253 + RBV n =63 No RBV n = 60 + RBV n=65 No RBV n=65 Serious adverse event 7 (3%) 1 (2%) 2 (3%) 2 (3%) 2 (3%) Deat
Slide 62: HCV: Broad Phase 3 Efficacy Program Across Genotypes
HCV: We Have Advanced MK-5172/MK-8742 Into a Broad Phase 3 Efficacy Program Across HCV Genotypes and Patient Categories
Slide 63: HCV: MK-5172/8742 Combination Therapy Properties
HCV: MK-5172/8742 Combination Therapy Has Desirable Properties • Once-daily, fixed-dose combination • Direct-acting anti-HCV therapy with impressive activity in both ribavirin- containing and ribavirin-free regimens • Phase 3 studies to begin 2Q 2014 • Recent data from C-WORTHy phase 2 study demonst
Slide 64: HCV: C-SWIFT Short-Duration Study
HCV: Exploring A Short-Duration Treatment Paradigm for Eradicating HCV Infection: the C-SWIFT Study • Goal: develop the most convenient, shortest-duration highest efficacy regimen combining the best molecules in each of the major DAA classes • C-SWIFT Study Design – 140 patients – All patients recei
Slide 65: Diabetes: We Are a Leader
Diabetes: We Are a Leader • $5.8 billion sales in 2013/ 5% growth1 • Lead DPP-4 class with 65% global share • US showing recent progress • Additional opportunities – Once-weekly DPP-4 (Omarigliptin) – Combination with SGLT2 (MK- 8835) – Insulin glargine (MK-1293) Maintains US DPP-4 market leadership
Slide 66: Diabetes: JANUVIA Is the Leading DPP-4 Inhibitor
Diabetes: JANUVIA is the Leading DPP-4 Inhibitor • Ongoing safety surveillance provides reassurance that sitagliptin is well- tolerated in diabetic patients • Sitagliptin outcomes study (TECOS) will provide a wealth of data on the clinical cardiovascular impact of sitagliptin treatment: – 14,000 pat
Slide 67: Diabetes: Omarigliptin HbA1c Lowering in Japanese Patients
Diabetes: Omarigliptin Behaves Similarly to Daily Sitagliptin with Respect to HbA1c Lowering in Japanese Patients -1.0 -0.8 -0.6 -0.4 -0.2 0.0 0.2 0.4 0 4 8 12 16 20 24 L s Mean ± S E Cha n ge fro m Baselin e Week Omarigliptin 25 mg QW baseline = 7.9% Sitagliptin 50 mg QD baseline = 8.0% Placebo bas
Slide 68: Diabetes: Broad Program Supporting Omarigliptin Registration
Diabetes: We Have Developed a Broad Program Supporting the Registration of Omarigliptin… • Comprehensive phase 3 program will support a broad range of indications in the treatment of patients with type 2 diabetes, including use in monotherapy and combinations • Ten phase 3 studies are proceeding, in
Slide 69: Diabetes: Partnering with Pfizer on Ertugliflozin
Diabetes: Partnering with Pfizer to Develop Ertugliflozin as Monotherapy and Combination Therapy for Type 2 Diabetes • Ertugliflozin is an SGLT2 inhibitor which has demonstrated impressive efficacy in reducing HbA1c levels • Ertugliflozin development will support indications for the treatment of pat
Slide 70: Diabetes: Glucose-Responsive Insulin Proposed 30 Years Ago
Diabetes: Development of a Glucose-Responsive Insulin was Proposed More than 30 Years Ago Lectin Receptor Insulin Receptor Insulin Response (glucose lowering) Insulin Receptor-Mediated IOC Degradation Lectin Receptor-Mediated IOC Degradation Insulin-Oligosaccharide Conjugate
Slide 71: Diabetes: Insulin-Oligosaccharide Conjugate Mechanism
Diabetes: An Insulin-Oligosaccharide Conjugate Would Only Act on the Insulin Receptor Under Conditions of High Ambient Glucose Levels Glucose Insulin Response (glucose lowering) Insulin Receptor-Mediated IOC Degradation Lectin Receptor-Mediated IOC Degradation Insulin-Oligosaccharide Conjugate
Slide 72: Diabetes: Pre-Clinical Data for Insulin-Oligosaccharide Conjugate
Results: Glucose infusion required to maintain glycemic targets with L-490 is lower than that required for native insulin under euglycemic conditions Diabetes: Pre-Clinical Data Support Advancing an Insulin-Oligosaccharide Conjugate into Clinical Trials Steady-State (90-120) GIR * * * 0 5 10 15 20 2
Slide 73: Numerous Sources of Value in Late-Stage Pipeline
Merck has Numerous Sources of Value in Its Late-Stage Pipeline: A Suite of Opportunities • Second-generation HPV Vaccine • Novel HIV therapies, including Doravirine that will be entering phase 3 trials • Novel, direct-acting anti-viral therapy for HCV, currently in phase 3 studies • Long-acting DPP-
Slide 74: Break
Break
Slide 75: Harnessing Immune Mechanisms in Oncology
Harnessing Immune Mechanisms in Oncology Roger M. Perlmutter Executive Vice President and President Merck Research Laboratories Adam H. Schechter Executive Vice President and President Global Human Health
Slide 76: Cancer Is a Significant Global Burden
Cancer Is a Significant Global Burden • Cancer is a leading cause of death worldwide – 14 million people are diagnosed and about 8 million die each year • Annual cancer cases expected to rise to 22 million in the next two decades • Cancer deaths are predicted to rise to 13 million per year worldwide
Slide 77: Oncology: Significant Global Resources Expanding
Oncology: Significant Global Resources Expanding Factors Driving Growth: • Innovation/price • Duration of treatment • Number of patients Sources. IMS, Evaluate Pharma $0 $20 $40 $60 $80 $100 $120 $140 2013 2020 Global Oncology Sales Projected to Grow $76 $120 Sal e s ($B )
Slide 78: Merck Committed to Cancer Care
Merck…Committed to Cancer Care • Long history of breakthrough innovations in many therapeutic areas • We are investing to be a leader in Oncology – MK-3475 breakthrough that has the potential to transform cancer treatment – Top priority for Merck – Focusing resources for MK-3475 launch and beyond –
Slide 79: Pathology of Tumors Suggests Role for Immune System
Pathology of Tumors Suggests a Role for Immune System Effects on Growth • Many tumor masses grow within an inflammatory milieu • Lymphocytes, macrophages and dendritic cells are easily rescued from tumor stroma • Rare examples of spontaneous regression of cancer have been reported, most often in mal
Slide 80: Key Events in Immunotherapy
Key Events in Immunotherapy Enthusiasm Phase 1978 – 1985 Renaissance Phase 2000 – current 1960s 1970s 1980s 1990s 2000s 2010-12 From Weinberg, R. The Biology of Cancer Skepticism Phase 1985 – 2000 1890s First cancer vaccine developed (Coley’s “toxins”) 1960s Adjuvants (e.g., BCG) shown to eradicate
Slide 81: Immune Checkpoint Regulation
Naive T cell Primary Stimulation Activated T cell Anergic T cell inhibitory signal Immune Checkpoint Regulation CD28 CD80/86 TCR MHC - + Activated T cell CD80/86 CTLA-4 PD-1 PD-1L stimulatory signal GITR CTLA-4 PD-1 GITR - - + CD28 CD137 CD27 GITR Activation Inhibition Homeostasis CTLA-4 PD-1 LAG3 T
Slide 82: PD-1 Is Important for Immune Tolerance
PD-1 Is Important for Immune Tolerance • PD-1 is an activation antigen expressed on T and B lymphocytes • PD-1 interacts with its ligands (PD-L1 and PD-L2) to inhibit activation of T lymphocytes & anti-tumor immune response • Human cancers can ‘hijack’ the PD-1 pathway • PD-1 Blockade may reactivate
Slide 83: MK-3475 Is a Potent Antibody Against PD-1
MK-3475 Is a Potent Antibody Against PD-1 • First-in-human study of MK-3475 in melanoma (Hamid et al, NEJM 369:134) • Expanded study platform permits assessment of activity in non-small-cell lung cancer, uroepithelial tumors, triple-negative breast cancer, squamous cell cancer of the head and neck,
Slide 84: MK-3475 Clinical Activity in Patient with Advanced Melanoma
MK-3475 Clinical Activity in a Patient with Advanced Melanoma • 72 year-old male with melanoma progressed following chemotherapy, high-dose IL-2, and ipilimumab • Patient was placed on oxygen support due to progressive lung disease burden and pleural effusion • After 3 months of MK-3475, the patient
Slide 85: Maximum Percent Change in Tumor Size
Maximum Percent Change From Baseline in Tumor Size Evaluable Patients1 (Central Review, RECIST v1.1) Percentage changes >100% were truncated at 100%. Horizontal dotted line represents –30%. Analysis cut-off date: July 26, 2013. 1Evaluable patients were those with measurable disease at baseline per c
Slide 86: Immunoregulatory Therapy: Bending the Survival Curve?
Immunoregulatory Therapy in Oncology: Bending the Survival Curve? Control Standard or other therapy Checkpoint blockade Combination Time % S ur v iv a l Aspirational Goal:
Slide 87: The Opportunity: Targeting Immunomodulators
The Opportunity: Targeting Immunomodulators Mellman et al. Nature 480, 480-489 (2011). Activating Receptors Inhibitory Receptors Agonist antibodies Antagonist antibodies Optimal cancer immunotherapy combinations
Slide 88: Rethinking Cancer Therapy
Rethinking Cancer Therapy • What are the determinants of responsiveness? • What can be done to increase the representation of tumor-reactive cells, and to trigger their activation? • Why is immunomodulatory therapy selective?
Slide 89: The Hypermutation Hypothesis
Lawrence et al, Nature 499:214 (2013) The hypermutation hypothesis: High frequency of somatic hypermutations in tumors may lead to greater immune stimulation and improved responses to immunomodulatory therapies. Frequency of Somatic Mutations Varies by Tumor Type: Does This Influence Immune Recognit
Slide 90: Harnessing Immune Mechanisms in Oncology
Harnessing Immune Mechanisms in Oncology Roy D. Baynes Senior Vice President Global Clinical Development Merck Research Laboratories
Slide 91: Merck's Strategy in Immuno-Oncology
Merck’s Strategy in Immuno-Oncology • Building a foundation with monotherapy – Beginning with refractory patients – Expanding into earlier stages – Exploring multiple tumor types – Providing broadest clinical data set • Expanding experience in combination therapy – Standard of care, emerging approac
Slide 92: MK-3475 Mechanism of Action
1. MK-3475 binds PD-1 2. Bound MK-3475 blocks the interaction between PD-1 and PD-L1 3. Anergic MK-3475-bound cells become activated 4. Activated cells promote immune-mediated tumor cell killing MK-3475 Mechanism of Action PD-1 Tumor cell PD-L1 Anergic T cell Tumor cell Activated T cell Tumor cell M
Slide 93: Melanoma Phase 1 Trial Design
Melanoma Phase 1 Trial Design MK-3475 Treatment: 10 mg/kg IV Q2W, 10 mg/kg IV Q3W, or 2 mg/kg IV Q3W Response assessment • Primary: RECIST 1.1 per independent central review • Secondary: immune-related response criteria (irRC)3 per investigator assessment 93 1 Response was assessed every 12 weeks fo
Slide 94: Melanoma: Rapid Response to MK-3475
Melanoma: Rapid Response to MK-3475 76-year-old male with desmoplastic melanoma with progression after ipilimumab WEEK 9 (following third dose) WEEK 3 (following first dose) DAY 1 Baseline Courtesy of Dr. Wen-Jen Hwu
Slide 95: Melanoma: Tumor Flare With Delayed Response
Week 52 Week 24 July 2013 Melanoma: Tumor Flare With Delayed Response to MK-3475 February 2013 Week 12 Baseline November 2012 Baseline Case provided by C Robert. Courtesy of Dr. Caroline Robert and Institut Gustave-Roussy.
Slide 96: Melanoma: Time to Response and Durability
Melanoma: Time to Response and Durability 96 0 10 20 30 40 50 60 70 80 Time, weeks Indivi d u al P at ie n ts IPI treated IPI naïve Complete response Partial response Progression Response ongoing and alive First tumor assessment Bars represent the relative number of weeks from first MK-3475 dose to
Slide 97: Melanoma: Kaplan-Meier Estimates of Overall Survival
Melanoma: Kaplan-Meier Estimates of Overall Survival 97 Median, mo Rate, 6 mo Rate, 12 mo 2 mg/kg Q3W NR 91% 86% 10 mg/kg Q3W NR 93% 79% 10 mg/kg Q2W NR 86% 82% Total NR 89% 81% • Median OS not reached for any dosing cohort • Results were similar in IPI-naïve and IPI-treated patients 0 10 20 30 40 5
Slide 98: Melanoma: PD-L1 as a Predictive Biomarker
Melanoma: Preliminary Data on PD-L1 as a Predictive Biomarker • PD-L1 is positive in a majority of patients • Degree of positivity may have some association with response • Overall findings suggest that it is not a useful segmentation tool in malignant melanoma
Slide 99: MK-3475: Melanoma Program
MK-3475: Melanoma Program REGISTRATION PHASE 1 PRECLINICAL C O M B IN A T IO N Melanoma BRAF & MEK Inh (GSK) (PN022) Melanoma with Ipi / Sylatron (PN029) NSCLC with chemo, IPI & TKI (PN021) Phase 3 Melanoma IPI naïve (KN006) Phase 2 Melanoma IPI refractory (KN002) Phase 3 Melanoma adjuvant Melanoma
Slide 100: Potentially Immune-Related AEs
Potentially Immune-Related AEs • Pneumonitis • Hypothyroidism • Hyperthyroidism • Adrenal insufficiency • Transaminase elevations • Renal insufficiency • Colitis • The toxicities are immune based and distinct from the usual chemotherapy toxicities 100 Analysis cut-off date: July 26, 2013. In clinica
Slide 101: Merck Announces BLA Acceptance with Priority Review
Merck Announces… • BLA accepted by FDA for Priority Review in advanced melanoma – Proposed indication for metastatic melanoma patients previously treated with ipilimumab (refractory) – PDUFA date October 28, 2014 • Plans to file for advanced melanoma in EU in 2014 • Ongoing development for advanced
Slide 102: NSCLC: Phase 1 Trial Design
NSCLC: Phase 1 Trial Design MK-3475 Treatment: 10 mg/kg IV Q3W Response assessment • Primary: RECIST 1.1 per independent central review • Secondary: Immune-related response criteria (irRC)3 per investigator assessment 102 Complete or partial response or stable disease Continue treatment until progre
Slide 103: NSCLC: MK-3475 Responders Have Prolonged Duration of Response
0 20 40 60 80 Time, weeks AN 169 AN 181 AN 196 AN 197 AN 201 AN 179 AN 173 AN 161 AN 152 Single-Arm Cohort of 38 NSCLC Patients Who Had Failed 3L+ Therapy NSCLC: MK-3475 Responders Have Prolonged Duration of Response • 7/9 responders on treatment at time of analysis • Median PFS of responders not re
Slide 104: NSCLC: PD-L1 Biomarker and Likelihood of Benefit
NSCLC: Patients With PD-L1 Biomarker May Be More Likely to Benefit From MK-3475 Best Overall Response Rate (95% Confidence Interval) by RECIST Cut point Prevalence PD-L1 - PD-L1 + Total ≥50% staining ~25% N=88 11% (6%, 20%) NPV: 89% N=41 37% (22%, 53%) PPV: 37% N=129 19% (13%, 27%) ≥1% staining ~45%
Slide 105: MK-3475: NSCLC Program
MK-3475: NSCLC Program REGISTRATION PHASE 1 PRECLINICAL C O M B IN A T IO N RCC with axitinib (PFE) 41BB (PFE) Melanoma with T-VEC (AMGN) NSCLC with abraxane (PN026) NSCLC with IDO1 (INCY) Phase 2/3 NSCLC (KN010) Phase 3 NSCLC 1st line Melanoma & NSCLC (KEYNOTE001) M O N O T H E R A P Y Ongoing Plan
Slide 106: MK-3475 Summary
MK-3475 Summary • Significant efficacy in metastatic melanoma with durable response – ~88% of patients still in response – 81% OS rate at 12 months; median OS not reached • Significant efficacy in metastatic NSCLC (3L+) – Responses seen in ~20% of patients – Response more common in patients with hig
Slide 107: MK-3475: Other Tumor Types
MK-3475: Other Tumor Types REGISTRATION PHASE 1 PRECLINICAL C O M B IN A T IO N Phase 3 Melanoma IPI naïve (KN006) Phase 2 Melanoma IPI Refractory (KN002) Phase 2/3 NSCLC (KN010) Phase 3 Head & neck Phase 3 Bladder Phase 3 Melanoma adjuvant Phase 3 NSCLC 1st line Biomarker + 20 multiple solid tumors
Slide 108: Preclinical: MK-3475 With Anti-GITR Synergy
Preclinical Data: Combining MK-3475 With Anti-GITR Results in Synergy (Mouse Model) Combination of increasing the immune response (anti-GITR) with blocking an immune inhibitor (MK-3475) appears effective Large MC38 Tumors (300 mm3 starting volume) Day Post Anti-GITR and/or MK-3475 All doses 5 mg/kg
Slide 109: Preclinical: MK-3475 With Anti-LAG3 Synergy
Syngeneic RenCa Model in Female BALB/c Mice Spontaneous Renal Cortical Adenocarcinoma Preclinical Data: Combining MK-3475 With Anti-LAG3 Results in Synergy (Mouse Model) Combination of blocking 2 immune inhibitors (MK-3475 and anti-LAG3) appears effective MK-3475 (5 mpk, ip, Q4D x 4) Isotype Anti-LA
Slide 110: Merck Oncology: Broad Universe of Partnerships
Merck Oncology: Broad Universe of Partnerships
Slide 111: Merck Immuno-Oncology Pipeline
Merck Immuno-Oncology Pipeline REGISTRATION PHASE 1 PRECLINICAL C O M B IN A T IO N Other antagonists Anti-LAG3 RCC with pazopanib (GSK) (KN018) RCC with axitinib (PFE) HER2+ breast with trastuzumab Solid tumors with 41BB (PFE) MM with lenalidomide & dexamethasone Melanoma with IPI/Sylatron (KN029)
Slide 112: What to Expect at ASCO
What to Expect at ASCO • Merck will have more than 15 company-sponsored abstracts on MK-3475, including 6 oral presentations covering: – Advanced melanoma – Non-small-cell lung cancer – Head & neck cancer
Slide 113: ASCO: Presentations in Advanced Malignant Melanoma
ASCO: Multiple Presentations in Advanced Malignant Melanoma Title Type/Session Date Efficacy and Safety of the Anti-PD-1 Monoclonal Antibody MK-3475 in 411 Patients (Pts) With Melanoma (MEL) Oral Presentation; Melanoma / Skin Cancers Monday, June 2 3:00PM–6:00PM Baseline Tumor Size Is an Independent
Slide 114: ASCO: First Discussion of First-line Data in NSCLC
ASCO: First Discussion of First-line Data in NSCLC Title Type/Session Date Safety and Clinical Activity of MK-3475 as Initial Therapy in Patients With Non-Small Cell Lung Cancer (NSCLC) Oral Presentation; Lung Cancer - Non-Small Cell Metastatic Monday, June 2 3:00PM–6:00PM Safety and Clinical Activi
Slide 115: ASCO: Monotherapy in Head & Neck Cancer
ASCO: First Presentation of Monotherapy in Head & Neck Cancer Title Type/Session Date A Phase 1b Study of MK-3475 in Patients With Human Papillomavirus (HPV) and non-HPV Associated Head and Neck (H/N) Cancer Oral Presentation; Head and Neck Cancer - Clinical Science Symposium Sunday, June 1; 11:30AM
Slide 116: What to Expect in 2014
What to Expect in 2014 • Anticipated approval in advanced melanoma in US • Filing for advanced melanoma in EU • 4 additional registration trials to begin – First registration studies in 2 new tumor types: head & neck and bladder – Registration studies in 1st line NSCLC and adjuvant melanoma • 7 addi
Slide 117: Harnessing Immune Mechanisms in Oncology
Harnessing Immune Mechanisms in Oncology Frank Clyburn President, Global Oncology
Slide 118: Global Sales Concentrated in US and EUCAN
Global Sales Concentrated in US and EUCAN Source: IMS MIDAS 2013 Global Oncology Sales of $76B Other
Slide 119: Global Sales, Incidence and Mortality by Cancer Type
Source: EvaluatePharma (data pulled 4/10/2014) Global Sales, Incidence and Mortality Select Cancer Type 2013 Sales ($mm) Breast cancer $11,530 CRC 7,501 NSCLC 6,757 NHL 6,211 Multiple myeloma 6,210 CML 5,952 Prostate cancer 5,384 RCC 3,749 Melanoma 1,388 ALL 1,304 Liver cancer 868 Glioblastoma 846 S
Slide 120: Potential Launches in Multiple Tumor Types
Potential Launches in Multiple Tumor Types OTHERS BLADDER MELANOMA HEAD & NECK NON-SMALL- CELL LUNG
Slide 121: Potential Launches in Multiple Tumor Types
Potential Launches in Multiple Tumor Types OTHERS BLADDER MELANOMA HEAD & NECK NON-SMALL- CELL LUNG # of drug-treated patients per year ~35,000 (2013 – US, EU5, Japan) # of drug-treated patients per year ~460,000 (2013 – US, EU5, Japan) Source: Decision Resources
Slide 122: Potential Launches in Multiple Tumor Types
Potential Launches in Multiple Tumor Types • Initial market entry in metastatic melanoma • Second indication in non-small-cell lung cancer • Possible application in up to 30 different types of tumors OTHERS BLADDER MELANOMA HEAD & NECK NON-SMALL- CELL LUNG
Slide 123: Immuno-Oncology Potential
Immuno-Oncology Potential Chemotherapies • Dacarbazine • Temozolomide Genetic/Bio Selection • BRAF/MEKi: – Vemurafenib – Dabrafenib – Trametinib Immunotherapies • Interferon • Peg-interferon • Interleukin-2 • CTLA4 Future Opportunities • Higher response rates • More durable responses • Improved tole
Slide 124: Critical Capabilities for Oncology Leadership
Critical Capabilities for Oncology Leadership 1. Robust clinical development program 2. Expanded scientific engagement 3. Strong market access, distribution, and account management 4. Multifaceted patient support services
Slide 125: Launch READY for Melanoma
Launch READY for Melanoma • Augmented field force in place • Increased presence to ensure comprehensive education • Enhanced presence at scientific congresses • Improved patient support services
Slide 126: Melanoma Patient Insights Inform Patient Support Strategy
Melanoma Patient Insights Inform Patient Support Strategy Metastatic melanoma patients and their caregivers, face a complicated journey of physical, emotional, and financial challenges Patient Insights • Seek treatments that offer hope, efficacy, and tolerability • Find disease and treatment informa
Slide 127: Global Market Access Trends in Oncology
Global Market Access Trends in Oncology Trends That Will FACILITATE Access Trends That Will RESTRICT Access • Significant new advances with improved efficacy and tolerability • Public demand and political sensitivity of cancer • High unmet need in oncology recognized by payers • Patient advocacy in
Slide 128: Considerations for NSCLC
Considerations for NSCLC • Broader oncology audience • Different patient demographics • Different payer mix in US • Focus on market access with strong value dossier
Slide 129: Excited about Opportunities to Improve Lives of Patients with Cancer
Excited about Opportunities to Improve the Lives of Patients with Cancer • Launch READY in Melanoma • Potential for future indications in multiple tumor types and combinations
Slide 130: Summary
Summary
Slide 131: Merck Has the Right Strategy to Drive Growth and Productivity
Merck Has the Right Strategy to Drive Growth and Productivity New, Focused Model Suite of Opportunities Delivering Immuno-oncology Harnessing Immuno-Oncology New, Focused Model Suite of Opportunities
Slide 132: Our Intention: Premier Research-Driven Biopharmaceutical Company
Our Intention… To Be the Premier Research-Driven Biopharmaceutical Company − Bring innovation to patients and physicians − Invest in key areas to address unmet need − Access the best external science − Grow EPS off the 2014 base − Industry-leading return of capital to shareholders To deliver superio
Slide 133: Focusing on the Future
Focusing on the Future