Slide 1: Merck Q2 2020 Earnings
Merck Q2 2020 Earnings
Slide 2: Forward-looking statement of Merck & Co., Inc.
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. Exa
Slide 3: Q2 performance highlights
Q2 performance highlights Revenue Created • Continued commitment to value-enhancing business development, including three COVID-19 impacted by $10.9B research deals and the Animal Health acquisitions of Sentinel and Quantified Ag shareholder reduced Returned $1.6 billion to shareholders through valu
Slide 4: Fundamentals of the business remain intact through the first half of the year
Fundamentals of the business remain intact through the first half of the year Growth in 1H20 +4% reflects strong Total Revenue underlying demand for our innovative portfolio +3% +12% Human Health Animal Health 1. Growth rates reflect year-to-date (1H20 vs. 1H19) and exclude the impact of foreign exc
Slide 5: Oncology: strong growth across portfolio
Oncology: strong growth across portfolio +31% YOY • KEYTRUDA sales of $3.4B increased 31% year- over-year, reflecting strong growth despite slight decline in new patient starts due to COVID-19 o In the U.S sales of $2.0B driven by growth across all key tumor types, including continued growth in lung
Slide 6: Vaccines: short-term challenges driven by stay-at-home orders
Vaccines: short-term challenges driven by stay-at-home orders • Vaccines sales declined 29% year-over-year due to COVID-19 related stay at home orders and reduced patient visits to physician offices • GARDASIL sales of ~$660M decreased 24% year-over-year -24% YOY o In the U.S., sales decreased 63% p
Slide 7: Hospital: reduced access to hospitals & delayed procedures
Hospital: reduced access to hospitals & delayed procedures • BRIDION sales of ~$225M declined 18% year-over-year driven by delayed or canceled surgery procedures -18% YOY o Underlying health of business remains strong, and year-to-date BRIDION sales were flat year-over-year • Ongoing launch of PREVY
Slide 8: Animal Health: underlying strength more than offset COVID-19 headwind
Animal Health: underlying strength more than offset COVID-19 headwind • Animal Health sales increased 3% to ~$1.1B, absorbing ~$100M COVID-19 headwind +3% YOY o Livestock sales increased 3% due to an acquisition in Animal Health Intelligence. Sales were impacted by decreased protein and milk demand
Slide 9: Human health performance impacted by global pandemic
Human health performance impacted by global pandemic Canada -8% Europe2 -2% +14% -8% United -11% States $343M China Japan +13% -5% Eastern Europe / Middle East Asia Pacific -8% Africa Global Latin pharmaceutical America sales -6%1 1. All growth rates exclude the impact of foreign exchange. 2. Europe
Slide 10: Q2 2020 financial results summary: Strong P&L resiliency despite patient access challenges
Q2 2020 financial results summary: Strong P&L resiliency despite patient access challenges $ in billions, except EPS amounts Change Q2 2020 Q2 2019 Change Ex-FX Sales $10.9B $11.8 -8% -5% GAAP Gross Margin 70.9% 71.1% -0% -0% Non-GAAP Gross Margin2 73.8% 75.4% -2% -2% GAAP net income1 $3.0 $2.7 +12%
Slide 11: Confident in the long-term fundamental strength of our business
Confident in the long-term fundamental strength of our business Business Recovery Financial Strength Pipeline Progress Strategic Direction • Business recovered • Financial strength and • Pipeline continues to • Committed to the spinoff through the quarter with conservatively positioned mature with k
Slide 12: Leveraging strong legacy and expertise in vaccines and anti-infectives
Leveraging strong legacy and expertise in vaccines and anti-infectives to thoughtfully select and develop promising SARS-CoV-2 candidates Vaccines Antivirals Conviction: Vaccine development based on Timeliness: Opportunity to have a more technology and platforms proven to work immediate and direct i
Slide 13: Driving multiple scientific programs in an effort to help combat COVID-19
Driving multiple scientific programs in an effort to help combat COVID-19 Vaccine candidates Antiviral candidate IAVI Collaboration Themis Acquisition Ridgeback Collaboration (V590) (V591) (MK-4482) Collaboration with IAVI to develop an Acquisition of Themis, a company Collaboration with Ridgeback B
Slide 14: Updated guidance assumptions: COVID-19
Updated guidance assumptions: COVID-19 Pandemic Recovery Assumptions • Favorable recovery trends through the end of the second quarter: o Height of pandemic impact seen in April; recovery began in May and improved through June • Improved patient access to hospitals and other healthcare sites • Healt
Slide 15: Updated full-year 2020 guidance
Updated full-year 2020 guidance Prior Guidance Updated Guidance Key Assumptions • Assumes ~2.0% negative FX impact $46.1B - $48.1B $47.2 - $48.7B Revenue • Reflects strong underlying performance -2% to +3% (+1% to +5% ex-FX) +1 to +4% (+3% to +6% ex-FX) and reduced COVID-19 impacts Non-GAAP ~75.0% ~
Slide 16: 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 17: Continued progress on the spinoff of Organon & Co.
Continued progress on the spinoff of Organon & Co. Announced Jersey City, NJ as the global headquarters for Organon & Co. Rooted in our belief that Appointment of key external talent to add to strong executive leadership team: two, more focused o Matt Walsh, Chief Financial Officer companies will dr
Slide 18: 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 19: 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 • Rich history of making medicines and vaccines accessible and affordable through responsible pricing practices and industry-leading patient support programs • Implemented