Merck & Company, Inc. · NYSE:MRK
Merck & — Investor Day (2019)
79 slides from Merck &'s investor day presentation, 2019
Slide 1: Merck Investor Day
Merck Day INVENTING FOR LIFE
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT OF MERCK & Co., Inc., Kenilworth, N.J., USA These presentations from Merck & Co., Inc., Kenilworth, N.J., USA (the “company”) include “forward- looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Slide 3: Today's Agenda
TODAY’S AGENDA Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Ri
Slide 4: Our mission remains as critical as ever
AFTER MORE THAN 125 YEARS, OUR MISSION REMAINS AS CRITICAL AS EVER To discover, develop and provide innovative products Ken Frazier and services that save and improve lives around the world Premier science-driven biopharmaceutical company 4
Slide 5: Today's Industry Landscape
TODAY’S INDUSTRY LANDSCAPE CHALLENGES OPPORTUNITIES Rising cost of High unmet medical needs healthcare and R&D of patients globally Pricing policy uncertainty Growing and aging and shift to outcome-based global population reimbursement in the U.S. New modalities Ken Frazier Increased molecular and t
Slide 6: Evolution at Merck over the last 5 years
EVOLUTION AT MERCK OVER THE LAST 5 YEARS Revitalized focus on science-driven, integrated approach to R&D Solidified leadership across key pillars of growth Strengthened operating model to drive execution globally Ken Frazier Built energized leadership team and deep bench of talent Strong momentum fo
Slide 7: Clear Strategic Priorities to Drive Continued Leadership
CLEAR STRATEGIC PRIORITIES TO DRIVE CONTINUED LEADERSHIP Advance Unlock full Drive Deliver Ken Frazier pipeline for commercial simplification sustainable, ongoing scientific potential of and culture profitable breakthroughs portfolio change growth 7
Slide 8: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 9: Well Positioned to Deliver Strong Shareholder Returns
WELL POSITIONED TO DELIVER STRONG SHAREHOLDER RETURNS Sustained Meaningful Balanced and long-term operating margin disciplined capital revenue growth expansion allocation Rob Davis Investing in the business to innovate for patients globally 9
Slide 10: Growing Revenue Driven by Demand for Innovation
GROWING REVENUE DRIVEN BY DEMAND FOR INNOVATION IN THE FACE OF PRICING HEADWINDS HOSPITAL / ANIMAL ONCOLOGY VACCINES SPECIALTY1 HEALTH Leading oncology Durable growth Broad portfolio Global leader portfolio with with significant delivering delivering significant growth competitive demand-driven abov
Slide 11: Fortifying Our Future Ahead of the Changing Landscape
FORTIFYING OUR FUTURE AHEAD OF THE CHANGING LANDSCAPE Becoming a leaner, more efficient, science-driven company to accelerate growth • Focusing organization and resources on greatest opportunities for growth • Evolving operating model and culture to be more agile and efficient • Building optionality
Slide 12: Expect Meaningful Operating Margin Expansion & Increased ROIC
EXPECT MEANINGFUL OPERATING MARGIN EXPANSION & INCREASED ROIC 30% Non-GAAP SG&A as % of sales 40% Non-GAAP Operating margin expansion (%) 2014 2015 2016 2017 2018 2021 2022 2023 2014 2015 2016 2017 2018 2021 2022 2023 Non-GAAP R&D as % of sales Return on Invested Capital (%)1 Rob Davis 20% 14% 12% 1
Slide 13: Value-Creating Capital Allocation Strategy
VALUE-CREATING CAPITAL ALLOCATION STRATEGY Commitments Capital allocation priorities R&D Investments: Continued investments in internal over the next 5 years innovation CapEx: ~$16 billion of capital projects through 2022 focused on manufacturing capacity for our growth businesses, R&D discovery bui
Slide 14: Strategic Business Development Fueling Innovation
STRATEGIC BUSINESS DEVELOPMENT FUELING INNOVATION Bolt-on acquisitions Strategic collaborations and licensing • Developing portfolio through value-creating • Meaningful partnerships across all stages of acquisitions development • Investments in innovative mechanisms and • Working with a broad range
Slide 15: Positioned to Drive Sustainable Growth and Shareholder Value
POSITIONED TO DRIVE SUSTAINABLE GROWTH AND SHAREHOLDER VALUE Sustained long-term revenue growth including 2023 – the year of greatest impact of JANUVIA LOE Meaningful operating margin expansion through strong revenue growth driving favorable mix and further leveraged by expense productivity, thought
Slide 16: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 17: Commercial Priorities to Drive Further Global Growth
COMMERCIAL PRIORITIES TO DRIVE FURTHER GLOBAL GROWTH Frank Clyburn Build on leading Capitalize on Successfully position across key global growth execute new growth pillars opportunities launches 17
Slide 18: Current Pillars Have Expansion Opportunities Ahead
CURRENT PILLARS HAVE EXPANSION OPPORTUNITIES AHEAD HOSPITAL ONCOLOGY VACCINES Frank Clyburn PORTFOLIO Visibility into growth drivers over the next 5 years 18
Slide 19: Oncology: Driving Global Leadership
ONCOLOGY: DRIVING GLOBAL LEADERSHIP 27 Indications 15 Tumor types + MSI-H Foundational cancer Market-leading Broad-based Frank Clyburn treatment PARPi TKI >200K Patients treated Strong foundation with long runway for growth ahead 19
Slide 20: KEYTRUDA: Significant Global Growth Opportunities
KEYTRUDA: SIGNIFICANT GLOBAL GROWTH OPPORTUNITIES • Building on leadership in lung with KEYTRUDA is one of the best-selling additional reimbursement rolling out across drugs 6 years after launch Europe and other markets $10,000 $9,000 • Encouraged by early adoption in RCC and adjuvant melanoma launc
Slide 21: Lynparza: Set for Sustained Class Leadership
LYNPARZA: SET FOR SUSTAINED CLASS LEADERSHIP • Lynparza has class leadership in the U.S., Growth opportunities with ~60% of total PARPi prescriptions across multiple tumor types • The only PARPi with 1L maintenance indication in ovarian cancer based on strong and more ... results from SOLO-1 • POLO
Slide 22: Lenvima: Establishing as TKI of Choice
LENVIMA: ESTABLISHING AS TKI OF CHOICE Growth opportunities • Approved in markets worldwide in RCC, across multiple tumor types HCC and differentiated thyroid cancer • Significant opportunity in China given and more … prevalence of HCC in the market • Strong commercial collaboration sets Lung cancer
Slide 23: Oncology: Potential for >50 Additional Indications
ONCOLOGY: POTENTIAL FOR >50 ADDITIONAL INDICATIONS OVER NEXT 5 YEARS Proportion of expected indications by product Frank Clyburn Potential to nearly triple oncology indications by 2023 23
Slide 24: Vaccines: Growing Global Business
VACCINES: GROWING GLOBAL BUSINESS WITH NEAR- AND LONG-TERM OPPORTUNITIES Nearly doubled vaccines • Significant long-term opportunity for revenue since 2010 pediatric and adult vaccines growth $7.3B around the world Other ZOSTAVAX • High barriers-to-entry supporting $5.7B ROTATEQ sustained, durable p
Slide 25: GARDASIL: Positioned for Renewed Growth
GARDASIL: POSITIONED FOR RENEWED GROWTH Global incidence of HPV-related cancers & diseases • Growth driven by global appeals to eliminate cervical cancer Male Common Female Oropharynx cancer • Reacceleration of growth driven by expansion into new geographies, public Recurrent Respiratory and gender-
Slide 26: Hospital Portfolio: Optimized by Global Strength and Scale
HOSPITAL PORTFOLIO: OPTIMIZED BY GLOBAL STRENGTH AND SCALE BRIDION poised for continued growth Sizable HAB/VAB pneumonia worldwide as number of surgeries that indication represents new use a reversal agent increases opportunity for ZERBAXA growth Frank Clyburn Leading portfolio of antibiotics and Re
Slide 27: Innovative Portfolio and Wave of Indications Driving Global Growth
INNOVATIVE PORTFOLIO AND WAVE OF INDICATIONS DRIVING GLOBAL GROWTH -4% Growth Contributors: KEYTRUDA GARDASIL +4% Growth Contributors: +12% Pediatric Vaccines Growth Contributors: Canada GARDASIL +9% BRIDION Lynparza KEYTRUDA +67% KEYTRUDA Lenvima JANUVIA United Lenvima Europe¹ Hospital Acute Care L
Slide 28: China Becoming New Pillar of Growth
CHINA BECOMING NEW PILLAR OF GROWTH 43% Pivoting portfolio Reaching more patients & to innovation expanding customer base 30% 25% 24% 23% Frank Clyburn 18% 18% 18% 16% 15% 14% 12% 9% Average: 11% 7% 4% 1 Merck MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC 1Only includes Human Health portio
Slide 29: Confident in Growth Opportunities and Ability to Execute
CONFIDENT IN GROWTH OPPORTUNITIES AND ABILITY TO EXECUTE Frank Clyburn Innovative portfolio Significant World-class with significant international commercial teams demand-driven opportunities, executing in a growth notably in China changing environment Commercial foundation for sustained global grow
Slide 30: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 31: Merck Animal Health Is a Market Leader
MERCK ANIMAL HEALTH IS A MARKET LEADER • Global scale • Revenue growth above market • Strong profit contribution • Innovative new product solutions • Technologies that drive customer value • Merck synergies
Slide 32: Strong Long-Term Metrics for the Animal Health Industry
STRONG LONG-TERM METRICS FOR THE ANIMAL HEALTH INDUSTRY At the core of a $34+ billion industry CAGR mid-single digits1 Predictable and sustainable growth drivers Companion Merck Animal Animal Health Livestock Diagnostics Pharmaceuticals Genetics Vet services Vaccines Nutrition Population Rising midd
Slide 33: Merck Animal Health: Outperforming the Industry
ANNUAL NET SALES GROWTH (%) MERCK ANIMAL 12.0 10.5 Merck HEALTH: 10.0 9.0 9.3 8.4 9.0 OUTPERFORMING 8.0 THE INDUSTRY 6.0 6.2 6.5 5.8 4.0 5.4 3.4 Industry 2.0 0.0 2014 2015 2016 2017 2018 33 Source: Merck Internal Data, ex-exchange, excluding Zilmax. Industry Review
Slide 34: Merck Animal Health 2018 Sales
MERCK ANIMAL HEALTH 2018 Sales Global leader in pharmaceuticals, vaccines, health management solutions and emerging digital technology 38% Companion Animal Operating in more than 800 + 50 Countries 34 Product Products in more than Dedicated 62% Livestock families 150 Markets manufacturing 29% sites
Slide 35: Our Diverse Portfolio Provides Strength
OUR DIVERSE PORTFOLIO PROVIDES STRENGTH 2018 RESULTS Aquaculture 1% Anti-infectives 11% Poultry ASIA PAC 17% 16% United Ruminants Parasiticides States Top 10 30% 26% LATAM 29% Products Swine 13% 38% 14% Other Biologics All Others 17% 46% EURAM & 62% Companion Animal Canada 38% 42% Revenue by Revenue
Slide 36: Dedicated Animal Health R&D Network
DEDICATED ANIMAL HEALTH R&D NETWORK Vitré, FRA Bergen, NOR Ames, IA Boxmeer, Boise, ID NLD Cambridge, UK Schwabenheim, Ningbo, CHN Elkhorn, NE DEU Madison & Cologne, Rahway, NJ FRA Netanya, ISR Tokyo, JPN Millsboro, DE Singapore, SGP De Soto, KS Macquarie Park, AUS Antelliq Innovation Centers Bendig
Slide 37: Consistent Delivery of Significant New Product Approvals
Over 66 Approvals in 5 Years MERCK ANIMAL HEALTH: CONSISTENT DELIVERY OF SIGNIFICANT NEW PRODUCT APPROVALS 18 15 14 9 10 2014 2015 2016 2017 2018 >150 Geo-expansion licenses annually
Slide 38: Our Innovation Pathways
OUR INNOVATION PATHWAYS In-house Discovery and Technology • Biologics • Recombinant vaccines, RP technology • Emerging diseases • Delivery technologies Strategic Advantages Best-in-class Merck Research Laboratories First-in-class • Monoclonal antibodies • Oncology Vaccine leadership • Diabetes, atop
Slide 39: R&D Areas of Focus: Across Species
MERCK ANIMAL HEALTH MRL Collaborations R&D AREAS OF FOCUS: ACROSS SPECIES VACCINES BIOPHARMACEUTICALS PHARMACEUTICALS Zoonotic & Anti-Infectives Emerging Diseases Customer convenience, oral/mucosal Parasiticides & delivery, Endectocides MRL long duration MRL Respiratory Diseases Enteric Oncology Pro
Slide 40: Complementary Business Development
COMPLEMENTARY BUSINESS DEVELOPMENT Geo-expansion: vaccines, pharmaceuticals High-growth markets Zhejiang Zhengli Antoo Biotech Co
Slide 41: Investing in High-Growth Animal Health Opportunities
INVESTING IN HIGH-GROWTH ANIMAL HEALTH PRODUCTS + CONVENIENCE + PREDICTIVE SOLUTIONS OPPORTUNITIES Technology & Data Animal Health Ventures Innovative Customer Value Delivery Solutions Trends Driving Technology Vaccines & Adoption Pharmaceuticals • Productivity • Wellness • Traceability • Safety • A
Slide 42: Investing in Digitally-Enabled Customer Solutions
INVESTING IN DIGITALLY-ENABLED CUSTOMER SOLUTIONS >500 million animals tagged per year >100 million pets monitored Non–invasive tool that confirms bovine respiratory Sea lice counter >1,100 aqua monitoring disease and gauges its stations worldwide severity in eight seconds 42
Slide 43: Merck Animal Health: Our Competitive Advantage
MERCK ANIMAL HEALTH: OUR COMPETITIVE ADVANTAGE Broad global portfolio and presence Innovative products and solutions R&D excellence and access to MRL expertise High-quality manufacturing and supply Investment in digital technology to drive customer productivity Track record of execution
Slide 44: The Science of Healthier Animals
THE SCIENCE OF HEALTHIER ANIMALS® 44
Slide 45: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 46: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 47: Broad Oncology Strategy to Improve Outcomes
BROAD ONCOLOGY STRATEGY TO IMPROVE OUTCOMES FOR CANCER PATIENTS GLOBALLY 1 Broadly explore Advance pipeline and Identify patients Dr. Roy Baynes combinations to reach pursue strategic most likely to benefit more patients collaborations and using biomarkers acquisitions to expand portfolio Establish
Slide 48: KEYTRUDA: Broad Activity in >25 Cancer Types
KEYTRUDA: BROAD ACTIVITY IN >25 CANCER TYPES Melanoma NSCLC H&N Urothelial TNBC Gastric cHL 100 100 100 100 100 100 100 Change from baseline in tumor size (%) 0 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100 -100 = cancer types NHL PMBCL Mesothelioma Ovarian SCLC Esophageal NPC Anal with approved 100 100
Slide 49: KEYTRUDA: Repeated Overall Survival Benefits
KEYTRUDA: REPEATED OVERALL SURVIVAL BENEFITS IN MONOTHERAPY AND IN COMBINATION Ipi-Naive Melanoma, 2L Bladder, Any PD-L1 2L+ NSCLC, TPS ≥50% 2L+ NSCLC, TPS ≥1% 1L NSCLC, TPS ≥50% 1L RCC, Any PD-L1 Any PD-L1 KEYNOTE-045 KEYNOTE-010 KEYNOTE-010 KEYNOTE-024 KEYNOTE-426 KEYNOTE-006 Pembro vs Chemo Pembr
Slide 50: KEYTRUDA: Still in Early Innings of Development
KEYTRUDA: STILL IN EARLY INNINGS OF DEVELOPMENT >600 Combination trials >100 Trials in >1,000 adjuvant / neoadjuvant Ongoing Dr. Roy Baynes clinical and earlier lines trials >75 Registrational trials underway Continuing to build a wall of data 51
Slide 51: KEYTRUDA: Robust I-O Program in Adjuvant/Neoadjuvant
KEYTRUDA: ROBUST I-O PROGRAM IN ADJUVANT / NEOADJUVANT AND EARLIER LINES OF THERAPY 2018 2021 2023 2025 Adjuvant Melanoma (KN-054) NSCLC Adjuvant (KN-091) Gastric & Esophageal Adjuvant Adjuvant / Neoadjuvant MIBC (KN-866) APPROVED HNSCC Adjuvant / / Neoadjuvant (KN-585) Adjuvant / Neoadjuvant MIBC (
Slide 52: KEYTRUDA: Early Evidence in Breast Cancer
KEYTRUDA: EARLY EVIDENCE IN BREAST CANCER; 10 ONGOING TRIALS 100 90 ypT0 ypN0 ypT0/Tis ypN0 Pathological Complete 80 70 Response (%) 60 50 40 N = 60 Dr. Roy Baynes 30 K = KEYTRUDA Np = Nab-pac 20 A = doxorubicin C = cyclophosphamide Cb = carboplatin 10 T = paclitaxel Cohort A: Cohort B: Cohort C: Co
Slide 53: KEYTRUDA: Early Stage Prostate Cancer Data
KEYTRUDA: EARLY STAGE PROSTATE CANCER DATA INFORM PHASE 3 DEVELOPMENT PROGRAM KEYNOTE-365 Cohort A KEYNOTE-365 Cohort B KEYNOTE-365 Cohort C KEYTRUDA+Lynparza KEYTRUDA+Docetaxel KEYTRUDA+Enzalutamide • 11/25 (44%) experienced reduction in tumor burden • 6/25 (24%) experienced reduction ≥ 30% Dr. Roy
Slide 54: Broadest Prostate Cancer Program
BROADEST PROSTATE CANCER PROGRAM WITH MULTIPLE PH 3 TRIALS ADDRESSING 40% OF PATIENTS Biochemical Met HSPC mCRPC mCRPC mCRPC Primary Adjuvant Recurrence (BCR) (incl de novo) Pre-CTx CTx Post-CTx Non-metastatic KN-365 Cohort CRPC C KN-921 Ph3 KN-199 Cohort (M0) Pembro / 1-3 Ph3 mHSPC Pembro / KN-199
Slide 55: Lynparza: Showing Efficacy Beyond Women's Cancers
LYNPARZA: SHOWING EFFICACY BEYOND WOMEN’S CANCERS Tumor Tumor Agnostic • mCRPC, All Comers (KEYLYNK-010) agnostic • mCRPC, HRRm (PROfound) • mCRPC, All Comers Combo + Abiraterone • 1L, nonBRCA, KEYTRUDA combo (KEYLYNK-001) (PROpel) Lung Lung • 1L Maintenance BRCA+ (SOLO-1) - Approved cancer Cancer •
Slide 56: Lenvima: Potential Across Broad Range of Tumor Types
LENVIMA: POTENTIAL ACROSS BROAD RANGE OF TUMOR TYPES • 1L and 2L: Planning Stages • 1L NSQ Combo with KEYTRUDA Basket and Chemo (LEAP-006) trial • 1L PD-L1+ (LEAP-007) Head & neck • 2L NSQ (LEAP-008) cancer Urothelial • TNBC cancer • Gastric Lung • 1L (LEAP-001) • Ovarian cancer • 2L (Study 309 / KN
Slide 57: Extensive Oncology Pipeline
EXTENSIVE ONCOLOGY PIPELINE COVERING ALL ASPECTS OF THE TUMOR ENVIRONMENT CD27 CCR5 CTLA4 CXCR2 CVA21 GITR Other cancer IDO/TDO vaccines and viruses ILT3 PCVs ILT4 RIG-I IL10 STING LAG-3 Dr. Roy Baynes PD-1 PD-1/LAG-3 bi-specific Pi3K-delta TGFβ TIGIT TLR4 CDK ERK 58
Slide 58: Establishing Leadership in Growing Oncology Market
ESTABLISHING LEADERSHIP IN GROWING ONCOLOGY MARKET Worldwide oncology sales ($B) • Largest I-O clinical development $300 program in the industry IO/PARP/VEGF/R $250 • Sizable long-term opportunity in Cytotoxic, CD20, CDK, BTK, CD38 new tumor types, including TNBC $200 Hormonal, EGFR, HER 2/3, Other,
Slide 59: Early Stage Represents Significant Portion of Cancer Prevalence
EARLY STAGE – INCLUDING ADJUVANT / NEOADJUVANT – REPRESENTS SIGNIFICANT PORTION OF CANCER PREVALENCE HEAD AND NECK BLADDER BREAST Metastatic Metastatic Early stage Metastatic Unknown Unknown Unknown Early stage Early stage MELANOMA RENAL LUNG Mike Nally Early stage Early stage Metastatic Early stage
Slide 60: Addressing Tumor Types with Highest Incidence
ADDRESSING TUMOR TYPES WITH HIGHEST INCIDENCE, INCLUDING BREAST AND PROSTATE Breast cancer market expected Global incidence to grow to $38B by 20281 of top tumor types • TNBC represents 10-15% and ER+/HER2- represents ~65% of all breast cancers Lung 2,093,876 (11.6%) • Program addresses different st
Slide 61: Extensive Vaccines Pipeline
EXTENSIVE VACCINES PIPELINE TARGETING DISEASES WITH SIGNIFICANT UNMET NEED HPV PCV RSV CMV Dengue Ebola Others GARDASIL V114 Adults & Peds MK-1654 V160 V181 V920 V116 V172 (Moderna) Instituto Butantan Other PCVs Dr. Roy Baynes • Supporting global • Need for • Major unmet • Leading non- • Major cause
Slide 62: Growing Global Demand for Vaccines
GROWING GLOBAL DEMAND FOR VACCINES PROVIDES SUSTAINABLE MARKET OPPORTUNITY Growth over the next decade Global vaccine sales ($B)1 driven by: • Increasing Coverage: Driving penetration $55 - $65 +6% of inline products in high income markets (U.S./EU) $40 - $45 • Globalization: Expanding markets and i
Slide 63: Unique Pneumococcal Portfolio
UNIQUE PNEUMOCOCCAL PORTFOLIO TARGETING PROTECTION IN ADULTS AND CHILDREN PNEUMOVAX 23 V114 V116 OTHER PCVs Foundation of adult Advancing protection Targeted approach Aiming for broadest prevention across pediatric and to adult prevention protection for pediatric adult populations population • Uniqu
Slide 64: Pneumococcal Market Expected to Remain Large
PNEUMOCCOCAL MARKET EXPECTED TO REMAIN LARGE WITH SIGNIFICANT ADDITIONAL OPPORTUNITY PEDIATRICS ADULTS • Represent two-thirds of market • Significant remaining opportunity driven by aging • Even with vaccine progress, still close to 500,000 deaths population, limited National Immunization Programs a
Slide 65: Multiple Programs Targeting a Market of Over $10B
MULTIPLE PROGRAMS TARGETING A MARKET OF OVER $10B GLOBALLY • Most common respiratory pathogen in infants with >50,000 hospitalizations each year in the U.S. alone and >3 million hospitalizations globally RSV • RSV infection occurs in up to 10% of adults 65 and over in the U.S. each year, resulting i
Slide 66: Years of HIV Innovation Continues
30 YEARS OF HIV INNOVATION CONTINUES 1980s 1990s 2000s 2010s 2020+ 1983 1996 2000 2017 CONTINUING TO INNOVATE HIV is discovered ACHAP1 Dr. Roy Baynes Partnership with MK-8591: Investigational Botswana and Bill NRTTI for the treatment and Melinda Gates and prevention of HIV 1989 1998 2018 Role of pro
Slide 67: MK-8591: Unique Pharmacology
MK-8591: UNIQUE PHARMACOLOGY ENABLING POTENTIAL LONG DURATION THERAPY Long-Duration Oral Oral & Implantable Monthly Implantable Daily Weekly Elimination Radical Maximize simplicity, Dr. Roy Baynes Continue to simplify Free patients from simplification potency and Aspiring to cure HIV care daily dosi
Slide 68: HIV Remains a Paramount Worldwide Health Threat
HIV REMAINS A PARAMOUNT WORLDWIDE HEALTH THREAT 36.9M 1.8M 940K People Mike Nally Number AIDS- newly of people related infected living deaths in with HIV with HIV 2017 in 2017 69
Slide 69: MK-8591: Unique Attributes Align with Unmet Need
MK-8591: UNIQUE ATTRIBUTES ALIGN WELL WITH UNMET NEED MK-8591 HIV UNMET NEED Extended coverage for missed doses (forgiveness) Simple, efficacious regimens that Pill fatigue Mike Nally support lifelong Reduced toxicity therapy with high QoL Easy, effective options for PrEP 70
Slide 70: Gefapixant: Exploring Role of P2X3 Pathway
GEFAPIXANT (MK-7264): EXPLORING ROLE OF P2X3 PATHWAY IN DISORDERS OF SENSORY PATHOLOGY Sensory Pathology P2X3 Blockade Development focused on the role • Headache/migraine of P2X3 receptor mediated • Hypertension • Pathologic cough signaling in: • Bronchoconstriction • Breathlessness • Unexplained or
Slide 71: Gefapixant: Opportunity for Broad Applicability
GEFAPIXANT (MK-7264): OPPORTUNITY FOR BROAD APPLICABILITY ~29 million Americans suffer from sleep apnea, of which 80% are undiagnosed Other sensory functions 10% global prevalence for chronic Sleep cough, of which ~20% are refractory chronic cough or apnea unexplained chronic cough Endometrial- rela
Slide 72: Diverse Pipeline with Strong Growth Potential
DIVERSE PIPELINE WITH STRONG GROWTH POTENTIAL THROUGH NEXT DECADE HOSPITAL / ONCOLOGY VACCINES SPECIALTY Mike Nally Broadest I-O program Durable business with Innovative pipeline with strong pipeline of extensive portfolio, and targeting areas of oncology products to pipeline and global significant
Slide 73: Welcome & Introductions agenda
Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Financial & Value Creation Overview Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growth Drivers: KEYTRUDA & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Innovation Rick DeLuca, Pres
Slide 74: Embedding Immunobiology Across Discovery Efforts
EMBEDDING IMMUNOBIOLOGY ACROSS DISCOVERY EFFORTS Neuro- • Immunology is linked to most science disease states Other Oncology • Unlocking new opportunities to address unmet needs in areas previously “undruggable” Metabolic Renal Immunology • Increased understanding of biology Disorders and importance
Slide 75: Delivering Our Mission Across Modalities
DELIVERING OUR MISSION ACROSS MODALITIES • Working across a number of modalities, which allows us to address new and complex biology • Complexity of biological targets is increasing • Therapeutic modalities expand the druggable universe Dr. Dean Li • Choice of modality defines addressable biology an
Slide 76: Over 150 Discovery & Early Development Programs
OVER 150 DISCOVERY & EARLY DEVELOPMENT PROGRAMS ACROSS BROAD SET OF DISEASE AREAS • Heart Failure • Checkpoint / Costimulatory • Vascular Disease • Innate Activation / • Complications of diabetes / Immunocytokines obesity • Tumor Intrinsic CRMO1 • Other • Myeloid and Stromal 15% Immuno- • Metabolism
Slide 77: New Discovery Hubs
NEW DISCOVERY HUBS • Unleashing the power of Merck LONDON Research Labs Studying diseases facing aging populations • Demonstrating keen scientific experience and insight • Maximizing the ecosystems of CAMBRIDGE the key scientific and SOUTH SAN Exploring emerging technology innovation hub cities FRAN
Slide 78: Merck's Discovery Strategy
MERCK’S DISCOVERY STRATEGY Human biology drives our approach to discovery Understanding of immuno-oncology provides new insights into the role of immunology across every other therapeutic area Accessing biology through whatever modality necessary Broad and diversified emerging pipeline of unique mol
Slide 79: Merck
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