Merck & Company, Inc. · NYSE:MRK
Merck & — Q3 2023 Earnings Presentation
31 slides from Merck &'s earnings presentation, Oct 26, 2023
Slide 1: Merck Q3 2023 Earnings
Merck Q3 2023 Earnings October 26, 2023
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.
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 2023
Delivered on our key strategic priorities in Q3 2023 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 sales performance and earnings growth
Strong Q3 sales performance and earnings growth1 Q3 Worldwide Sales Full Year Sales GUIDANCE RANGE $59.3B $16.0B $59.7B - $60.2B $5.37 +22% $48.7B +17% +7% 2 +8% ex-Exchange, ex-LAGEVRIO 2021 2022 2023 Q3 Non-GAAP EPS3,4 Full Year Non-GAAP EPS3 $2.13 $7.48 $5.37 GUIDANCE RANGE $1.33 - $1.38 +15% 202
Slide 7: Advancing and enhancing our deep pipeline
Advancing and enhancing our deep pipeline Oncology Highlights Cardiometabolic Highlights • KEYNOTE-671: Received FDA approval for KEYTRUDA • Sotatercept: FDA accepted for priority review the BLA for the neoadjuvant and adjuvant treatment of certain for sotatercept for the treatment of adults with pa
Slide 8: Continuing to deliver on our purpose for patients
Continuing to deliver on our purpose for patients Pursuing $5.3B transformative +30%$5.8B +24% science to save $4.8B and improve $4.2B +27% +20% lives around the world $3.4B +31% 8
Slide 9: Business/Financial Results and Outlook
Business/Financial Results and Outlook Caroline Litchfield Chief Financial Officer
Slide 10: Strong underlying Q3 worldwide sales growth
Strong underlying Q3 worldwide sales growth Merck WORLDWIDE SALES1,2 Human Health Animal Health $16.0B +7% growth $14.3B +10% growth +9% ex-LAGEVRIO3 +10% ex-exchange, ex-LAGEVRIO3 $1.4B +2% growth +2% ex-exchange +6% ex-LAGEVRIO3 +8% ex-exchange, ex-LAGEVRIO3 1. Results attributable to Merck & Co.,
Slide 11: Oncology: KEYTRUDA continues to drive exceptional growth
Oncology: KEYTRUDA continues to drive exceptional growth • KEYTRUDA sales of $6.3B increased 17% year-over-year, driven by global uptake in earlier stage cancers and continued strong global demand from metastatic indications – In the U.S., growth of 14% reflects strong $5.3B utilization across metas
Slide 12: Oncology: Solid performance across broad portfolio
Oncology: Solid performance across broad portfolio • Lynparza1 sales grew 6% driven primarily by pricing in the U.S. and increased demand in $284M $299M $275M $246M $248M +6% +17% Latin America +23% $178M +25% +34% +62% • Lenvima2 sales grew 30% driven by timing of shipments in China and increased d
Slide 13: Vaccines: Robust growth driven by GARDASIL
Vaccines: Robust growth driven by GARDASIL • GARDASIL sales of $2.6B increased 16% year-over-year driven by strong demand, particularly in China – In the U.S., sales decreased due to the timing of CDC purchases $2.6B $2.3B +16% $1.7B $2.0B +20% +40% • Strong uptake of the pediatric indication of VAX
Slide 14: Hospital: Contributions from key products
Hospital: Contributions from key products • BRIDION sales of $424M were flat as greater share among neuromuscular $423M $424M blockade reversal agents in the U.S. was $369M +22% +0% offset by the impact of generic entry +15% primarily in Europe • PREVYMIS sales grew 38% driven by 3Q21 3Q22 3Q23 cont
Slide 15: Animal Health: Growth driven by livestock
Animal Health: Growth driven by livestock • Animal Health sales increased 2% to $1.4B – Livestock growth of 7% reflects price actions and increased demand for ruminant, poultry and swine products – Companion Animal sales declined 4% due to a reduction in vet visits in the U.S., partially $1.4B $1.5B
Slide 16: Q3 2023 non-GAAP financial results summary
Q3 2023 non-GAAP financial results summary1 $ in billions, except EPS amounts Change Q3 2023 Q3 2022 Change Ex-FX Sales $16.0 $15.0 +7% +9% Non-GAAP Gross Margin 77.0% 77.0% -0.1pts +0.8pts Non-GAAP Operating Expenses $5.8 $6.0 -4% -3% Non-GAAP Tax Rate 15.0% 13.6% +1.4pts N/A Non-GAAP EPS2,3 $2.13
Slide 17: Merck updated full-year 2023 guidance
Merck updated full-year 2023 guidance Prior Guidance Updated Guidance Key Assumptions • Includes approximately $1.3B of LAGEVRIO revenue $58.6B to $59.6B $59.7B to $60.2B Revenue • Ex-LAGEVRIO, growth of 9% to 10% (11 to 12% ex-FX) -1% to +1% (+1% to +3% ex-FX) +1% to +2% (+3% to +4% ex-FX) • Assume
Slide 18: Remain committed to balanced capital allocation strategy
Remain committed to balanced capital allocation strategy $ Billions1 Capital allocation order of priority Continue to invest in our pipeline and business while augmenting our pipeline $2.6 with value enhancing business development $1.9 $0.9 $0.5 $0.1 After-Tax R&D CapEx Dividends Business Share Repu
Slide 19: Research Update
Research Update Dr. Dean Li President, Merck Research Laboratories
Slide 20: Continuing to advance our oncology strategy
Continuing to advance our oncology strategy Immuno-oncology Precision Molecular Tissue Targeting Boost anti-tumor Targeting Increase cancer cell immune responses Impact pathways that sensitivity with ADCs can drive cancer growth and immune-engagers 20
Slide 21: Broadening and advancing our ADC presence
Broadening and advancing our ADC presence U3-1402 MK-2870 DS-7300 DS-6000 MK-1200 1 additional (HER3-DXd) (I-DXd) (R-DXd) clinical asset Daiichi Kelun Daiichi Daiichi Kelun Kelun Collaborator Sankyo Biotech Sankyo Sankyo Biotech Biotech Patritumab Sacituzumab Ifinatamab Raludotatug Generic Name Undi
Slide 22: Sharing data from our earlier stage oncology program
Sharing data from our earlier stage oncology program Lung Women’s Cancers Bladder • KEYNOTE-671: • Presented positive data at • KEYNOTE-123: ESMO: • Presented positive overall survival • Announced Phase 3 trial data at ESMO from Phase 3 study • KEYNOTE-756 in patients with evaluating KEYTRUDA for th
Slide 23: Leveraging precision medicine to improve outcomes for patients
Leveraging precision medicine to improve outcomes for patients WELIREG MK-10841 MK-3543 • Presented data at ESMO from • Presented data at ESMO for • Began enrolling patients in Phase 3 LITESPARK-005 study oral KRAS inhibitor as Phase 3 study evaluating for treatment of adults with monotherapy in sol
Slide 24: Bringing new cancer treatments to patients around the world
Bringing new cancer treatments to patients around the world Europe Japan • Granted approval for KEYNOTE-091 for adjuvant • Received approval for Lynparza1 in combination with treatment of certain patients with NSCLC abiraterone and prednisone for treatment of certain adult patients with BRCA-mutated
Slide 25: Significant advancements across our broader pipeline and portfolio
Significant advancements across our broader pipeline and portfolio Vaccines Cardiometabolic • V116: • Sotatercept: • STRIDE-3 data will be presented at World Vaccine Congress • Presented post-hoc analysis from STELLAR and interim West Coast on November 28th analysis from SOTERIA, an open label exten
Slide 26: Q&A
Q&A Rob Davis Chairman & Chief Executive Officer Caroline Litchfield Chief Financial Officer Dr. Dean Li President, Merck Research Laboratories Peter Dannenbaum Vice President, Investor Relations
Slide 27: Appendix
Appendix 27
Slide 28: Q3 2023 GAAP financial results summary
Q3 2023 GAAP financial results summary $ in billions, EPS amounts Q3 2023 Q3 2022 Change Change Ex-FX Sales $16.0 $15.0 +7% +9% Operating Expenses $5.8 $6.9 -16% -16% Tax Rate 15.5% 9.2% +6.3pts N/A GAAP EPS $1.86 $1.28 +45% +55% 28
Slide 29: Capital allocation: Trailing twelve months
Capital allocation: Trailing twelve months Over the past 12 months Order of priority $15 Well positioned balance sheet $12 $13.1 with capacity to fund Billions $9 $10.1 additional value-enhancing $6 $7.3 business development $3 $4.0 $1.0 opportunities $0 After-Tax R&D CapEx Dividends Paid Business S
Slide 30: Driving value for patients and shareholders by progressing our pipeline
Driving value for patients and shareholders by progressing our pipeline Key regulatory milestones Key data & clinical advancements since the last earnings call: since the last earnings call: • In the U.S.: • Presented data across broad oncology portfolio at ESMO, o FDA accepted for priority review t
Slide 31: 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-0482 KEYTRUDA (MK-3475) MK-4830 WELIREG (MK-6482) MK-7684A KEYTRUDA (MK-3475) LENVIMA (MK-7902) KEYTRUDA (MK-3475) NSCLC Advanced Solid Tumors CRC Biliary (v