Merck & Co., Inc. (NYSE:MRK) Leerink Partners 2024 Global Biopharma Conference Call March 11, 2024 12:40 PM ET Company Participants Marjorie Green - SVP and Head of Oncology Peter Dannenbaum - VP, IR Conference Call Participants Daina Graybosch - Leerink Partners Daina Graybosch Hi, everyone. Thank you for coming to the session. My name is Daina Graybosch. I and my team cover immuno-oncology and beyond here at Leerink Partners. And I'm really excited to have a great oncology conversation with Merck. We have ...

Merck (MRK) ended the recent trading session at $123.99, demonstrating a +0.19% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 1.03%. At the same time, the Dow added 0.34%, and the tech-heavy Nasdaq gained 1.51%.The pharmaceutical company's stock has dropped by 2.92% in the past month, falling short of the Medical sector's gain of 2.1% and the S&P 500's gain of 3.21%.The upcoming earnings release of Merck will be of great interest to investors. In ...

Company and Industry Overview * **Company**: Merck & Co., Inc. (NYSE:MRK) * **Industry**: Healthcare, Pharmaceuticals, Biotechnology Key Points GARDASIL * **Revenue Target**: Merck aims to achieve $11 billion in GARDASIL revenue by 2030, driven by international markets. * **International Expansion**: Merck focuses on increasing vaccine coverage rates, expanding coverage in NIPs, and targeting the private market and low middle-income segments. * **Manufacturing Capacity**: Merck has invested in manufacturing capacity to meet growing demand for GARDASIL, particularly in low middle-income markets. KEYTRUDA * **Growth Outlook**: KEYTRUDA is expected to see growth in 2024, driven by expansion into new tumor types and earlier treatment settings. * **Early-Stage Settings**: Early-stage KEYTRUDA is expected to be the primary driver of growth in 2024, with significant potential in triple-negative breast cancer and other tumor types. * **Subcutaneous Formulation**: Merck is exploring the subcutaneous formulation of KEYTRUDA for O-U.S. markets, aiming to improve patient convenience and access. Sotatercept * **PAH Approval**: Merck is confident in the approval of sotatercept for PAH in the EU and Japan, with a potential launch in the second half of 2024. * **Market Opportunity**: Sotatercept has the potential to become a significant revenue driver for Merck, with a target cardiovascular business of $15 billion by the mid-2030s. Vaccines * **Prevnar**: Merck is focused on expanding the Prevnar franchise, including the launch of VAXNEUVANCE for the pediatric segment and V116 for the adult segment. * **Dengue**: Merck is developing a dengue vaccine with potential for significant impact in the Southern Hemisphere and other regions. * **VAXELIS**: Merck is making steady progress with VAXELIS, a hexavalent vaccine covering multiple diseases. HIV * **Islatravir-Doravirine Combination**: Merck is developing an islatravir-doravirine combination for HIV, aiming to differentiate from existing treatments and address unmet needs. China * **Market Growth**: Merck has seen significant growth in China, driven by the launch of GARDASIL and other innovative products. * **Government Support**: The Chinese government's focus on improving healthcare standards and access has been beneficial for Merck. * **Partnerships**: Merck has formed partnerships with local companies to leverage the growing scientific ecosystem in China. Future Outlook * **Competitive Advantage**: Merck's competitive advantage lies in its pipeline of innovative products and its focus on patient care. * **Long-Term Growth**: Merck is focused on long-term growth, with a focus on expanding its pipeline and addressing unmet medical needs.

RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, announced today that Dr. Marjorie Green, senior vice president and head of oncology, global clinical development, Merck Research Laboratories, is scheduled to participate in a fireside chat at the Leerink Partners Global Biopharma Conference 2024 on Monday, March 11, 2024, at 12:40 p.m. ET. Investors, analysts, members of the media and the general public are invited to listen to a live audio webcast of t ...

Merck (MRK) ended the recent trading session at $126.96, demonstrating a -0.15% swing from the preceding day's closing price. The stock's change was less than the S&P 500's daily gain of 0.8%. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq gained 1.14%.Shares of the pharmaceutical company have appreciated by 0.61% over the course of the past month, underperforming the Medical sector's gain of 3.58% and the S&P 500's gain of 5.2%.Analysts and investors alike will be keeping a close eye on t ...

A pharmacist serves a customer at a pharmacy. Hispanolistic/E+ via Getty Images Anybody who has followed the stock market for some time knows that it can be quite volatile. All it takes is a poor or great earnings report, or underwhelming or better-than-expected guidance, and a stock can slump or jump by 5%, 10%, or more. One stock that has climbed higher since I last recommended it as a buy in December is Merck (NYSE:MRK). As the S&P 500 (SP500) has gained 6%, the pharmaceutical juggernaut has soared 19% ...

Merck (MRK) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this pharmaceutical company have returned +6.1% over the past month versus the Zacks S&P 500 composite's +4% change. The Zacks Large Cap Pharmaceuticals industry, to which Merck belongs, has gained 7.9% over this period. Now the key question is: Where could the stock be headed in the near term?Wh ...

Despite markets continuing at record highs, Charles Schwab (NYSE:SCHW) Investment Management still identifies investment opportunities within long-term stocks. According to its recent filings, the respected investment house perceives potential upside in interesting companies, increasing holdings.The top 5 Charles Schwab stocks include Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) stakes. These are the long-term stocks to which Charles Sch ...

RAHWAY, N.J.--(BUSINESS WIRE)--Merck (NYSE: MRK), known as MSD outside of the United States and Canada, announced today that Joseph Romanelli, president, Human Health International, is scheduled to participate in a fireside chat at the TD Cowen 44th Annual Health Care Conference on Tuesday, March 5, 2024, at 1:30 p.m. ET. Investors, analysts, members of the media and the general public are invited to listen to a live audio webcast of the presentation at this weblink. About Merck At Merck, known as MSD ou ...

Regulatory Approvals and Product Developments - Keytruda received multiple FDA and international approvals in 2023, including full approval for MSI-H/dMMR solid tumors in March 2023 and accelerated approval for urothelial carcinoma in April 2023[16] - Keytruda gained EC approval in October 2023 for adjuvant treatment of NSCLC and in December 2023 for HER2-negative gastric or GEJ adenocarcinoma[17] - Lynparza received FDA approval in May 2023 for BRCA-mutated metastatic castration-resistant prostate cancer[17] - Prevymis received FDA approval in June 2023 for CMV prophylaxis in kidney transplant recipients[17] - Ervebo received expanded FDA approval in August 2023 for Ebola virus disease prevention in individuals 12 months and older[17] - Welireg received FDA approval in December 2023 for advanced RCC treatment[17] - Bravecto received EC approval in January 2024 for a 12-month injectable formulation for dogs[17] - MK-1022 (patritumab deruxtecan) is under priority review by the FDA with a PDUFA date of June 26, 2024, for the treatment of EGFR-mutated NSCLC[49] - MK-7962 (sotatercept) is under priority review by the FDA with a PDUFA date of March 26, 2024, for the treatment of pulmonary arterial hypertension[49] - V116, a 21-valent pneumococcal conjugate vaccine, is under priority review by the FDA with a PDUFA date of June 17, 2024[49] - MK-7264 (gefapixant) received a second Complete Response Letter (CRL) from the FDA in December 2023 due to insufficient evidence of effectiveness[49] - Keytruda (MK-3475) is under priority review by the FDA for expanded indications in combination with chemotherapy for the treatment of primary advanced or recurrent endometrial carcinoma[49] - Keytruda is under review in the EU and Japan as a perioperative treatment regimen for resectable stage II, IIIA, or IIIB NSCLC, with a CHMP positive opinion recommending approval in February 2024[50] - Keytruda is under review in the EU and Japan in combination with Padcev for locally advanced or metastatic urothelial carcinoma, based on the KEYNOTE-A39 trial[50] - Keytruda is under review in Japan for first-line treatment of locally advanced unresectable or metastatic gastric or GEJ adenocarcinoma, based on the KEYNOTE-859 trial[50] - Welireg is under review in the EU for advanced renal cell carcinoma and von Hippel-Lindau disease, based on the LIGHTSPARK-005 and LIGHTSPARK-004 trials[50] - MK-7339 (Lynparza) is being evaluated in combination with pembrolizumab for expanded indications in NSCLC and SCLC[51] - MK-1026 (nemtabrutinib) is being evaluated for hematological malignancies, including chronic lymphocytic leukemia and small lymphocytic lymphoma[52] - MK-2870, a TROP2-directed ADC, is being evaluated for NSCLC and previously treated endometrial carcinoma[53] - MK-0616, an oral PCSK9 inhibitor, is in Phase 3 development for hypercholesterolemia, with two registrational Phase 3 studies initiated in 2023[53] - MK-4482 (Lagevrio) is under review for mild to moderate COVID-19, with FDA Emergency Use Authorization last reissued in October 2023[55] - The Phase 3 KEYLYNK-008 trial evaluating Keytruda in combination with Lynparza for metastatic squamous NSCLC was discontinued in December 2023 due to lack of overall survival improvement[53] Pricing and Market Access Challenges - The company's gross U.S. sales were reduced by 37% in 2023 due to rebates, discounts, and returns[21] - The Inflation Reduction Act (IRA) introduces financial penalties for drugs with prices rising faster than inflation and government price-setting for certain Medicare drugs starting in 2026[22] - The American Rescue Plan Act eliminates the statutory cap on Medicaid rebates starting in 2024, potentially increasing manufacturer rebates beyond 100% of AMP[22] - The Company faces intense pricing pressure in the EU due to generic and biosimilar drugs, with reference pricing mechanisms leading to downward pressure on drug prices[25] - In China, new entries to the National Reimbursement Drug List (NRDL) averaged 60% price reductions, and mature products in the Volume-Based Procurement (VBP) program saw average price reductions of over 50%[27] - Japan will implement government-mandated price reductions for pharmaceutical products in April 2024[25] - The Company anticipates continued pricing pressures and market access challenges in emerging markets due to cost containment measures and intellectual property regulations[27] Data Protection and Privacy Regulations - The EU's GDPR imposes penalties of up to 4% of global revenue for non-compliance with data protection regulations[31] - China's Personal Information Protection Law (PIPL) became effective in November 2021, adding complexity to data processing and cross-border transfers[32] - The Company's global privacy program manages evolving data protection requirements and facilitates international data transfers[32] Sales and Distribution Channels - The Company's human health pharmaceutical products are primarily sold to wholesalers, retailers, hospitals, and government agencies[33] - The Company's animal health products are distributed to veterinarians, distributors, animal producers, and pet owners[33] Patent Expirations and Exclusivity - Keytruda's patent protection in the U.S. expires in 2028, in the EU in 2031, and in Japan between 2032-2033[40] - Gardasil 9's patent protection in the U.S. expires in 2028, in the EU in 2030, and in Japan in 2030[40] - MK-7962 (sotatercept) is eligible for 12 years of data exclusivity upon U.S. approval, with granted patents expiring in 2037[42] - V116 (pneumococcal vaccine) has a U.S. patent expiration date of 2038[42] - MK-8591A (doravirine + islatravir) has a U.S. patent expiration date of 2032, with a pending PTE for doravirine[44] - MK-3475A (pembrolizumab + hyaluronidase subcutaneous) has a U.S. patent expiration date of 2039[44] - Bravecto's patent protection in the U.S. expires in 2026 (with pending PTE), in the EU in 2029, and in Japan in 2029[40] - Januvia and Janumet's exclusivity extends through May 2026 and July 2026, respectively, due to settlement agreements[39] Research and Development - The company employs approximately 21,800 people in research activities as of December 31, 2023[46] - The company's clinical pipeline includes candidates in multiple disease areas such as cancer, cardiovascular diseases, metabolic diseases, infectious diseases, neurosciences, immunology, respiratory diseases, and vaccines[46] - The company's R&D model focuses on prioritizing resources on candidates with unambiguous advantages to patients and payers, and maximizing the value of approved medicines through new indications and formulations[46] - The company utilizes adaptive clinical trial designs, such as adaptive Phase 2a/2b and Phase 2/3 trials, to reduce timelines and improve efficiency[46] - The company's external sourcing strategy includes acquisitions, licensing, and alliances to supplement internal research and access new technologies[46] Workforce and Employee Benefits - The company had approximately 72,000 employees worldwide as of December 31, 2023, with 29,000 in the U.S. and 15,000 third-party contractors globally[58] - Women comprise 51% of the company's global workforce and 46% of the Board of Directors, while underrepresented ethnic groups make up 35% of the U.S. workforce[58][61] - The company's voluntary turnover rate was 5.6% in 2023, down from 8.5% in 2022[58] - In 2023, the company hired approximately 8,200 employees globally, with 53% being women and 47% from underrepresented ethnic groups in the U.S.[59][61] - The company provides a minimum of 12 weeks of paid parental leave globally and ranks in the top quartile of Fortune 100 companies for U.S. benefits[62] - The company's senior management team is 37% women, and 26% of senior management roles in the U.S. are held by members of underrepresented ethnic groups[61] - The company's talent management system supports performance management, leadership development, and succession planning, with annual performance reviews[66] - The company offers flexible work arrangements, including remote work, flextime, and part-time options, to support employee well-being[64] Environmental Sustainability - The company's environmental sustainability strategy focuses on operational efficiency, minimizing product environmental impact, and reducing value chain impacts[67] - The company's Environmental Health and Safety (EHS) Council oversees environmental sustainability efforts, with leadership representation from all business areas[67] - The company aims to reduce Scope 1 and 2 operational greenhouse gas emissions by 46% by 2030 (from a 2019 baseline) and achieve carbon neutrality for Scope 1 and 2 emissions by 2025[69] - The company plans to source 100% of its purchased electricity from renewable sources by 2025 and reduce Scope 3 greenhouse gas emissions by 30% by 2030 (from a 2019 baseline)[69] - The company has set a target to maintain global water use at or below 2015 levels by 2025[69] - The company's 2025 waste diversion goals include no more than 20% of global operational waste sent to landfills or incinerators and 50% of its sites sending zero waste to landfills[69] - Expenditures for environmental remediation and liabilities were $6 million in 2023 and are estimated to be $27 million for 2024 through 2028[71] Financial Performance - Sales outside the U.S. accounted for 53% of total company sales in 2023, compared to 54% in both 2022 and 2021[72] - Net income attributable to the company was $365 million in 2023, compared to $14,519 million in 2022 and $13,049 million in 2021[223] - Comprehensive loss attributable to the company was $28 million in 2023, compared to comprehensive income of $14,180 million in 2022 and $14,805 million in 2021[223] - Total current assets decreased to $32,168 million in 2023 from $35,722 million in 2022, a decline of 9.9%[225] - Cash and cash equivalents dropped to $6,841 million in 2023 from $12,694 million in 2022, a significant decrease of 46.1%[225] - Accounts receivable increased to $10,349 million in 2023 from $9,450 million in 2022, reflecting a growth of 9.5%[225] - Long-term debt rose to $33,683 million in 2023 from $28,745 million in 2022, an increase of 17.2%[225] - Retained earnings decreased to $53,895 million in 2023 from $61,081 million in 2022, a decline of 11.8%[225] - Net income attributable to Merck & Co., Inc. was $365 million in 2023, a sharp drop from $14,519 million in 2022[227] - Cash dividends declared on common stock increased to $2.96 per share in 2023 from $2.80 per share in 2022[227] - Treasury stock shares purchased amounted to $1,346 million in 2023, up from $840 million in 2021[227] - Accumulated other comprehensive loss increased to $5,161 million in 2023 from $4,768 million in 2022[225] - Total equity decreased to $37,635 million in 2023 from $46,058 million in 2022, a decline of 18.3%[225] - Net cash provided by operating activities of continuing operations decreased to $13,006 million in 2023 from $19,095 million in 2022, a decline of 31.9%[229] - The company incurred a charge of $10,217 million for the acquisition of Prometheus Biosciences, Inc. in 2023[229] - Capital expenditures decreased to $3,863 million in 2023 from $4,388 million in 2022, a reduction of 12%[229] - The acquisition of Prometheus Biosciences, Inc. resulted in a net cash outflow of $10,705 million in 2023[229] - Dividends paid to stockholders increased to $7,445 million in 2023 from $7,012 million in 2022, a rise of 6.2%[229] - Net cash used in investing activities of continuing operations increased to $14,083 million in 2023 from $4,960 million in 2022, a significant rise of 184%[229] - The company's cash, cash equivalents, and restricted cash at the end of 2023 stood at $12,773 million, compared to $8,167 million at the end of 2022[229] - Share-based compensation increased to $645 million in 2023 from $541 million in 2022, a growth of 19.2%[229] - The company's net income from continuing operations was $377 million in 2023, a sharp decline from $14,526 million in 2022[229] - The acquisition of Imago BioSciences, Inc. resulted in a net cash outflow of $1,327 million in 2023[229] Revenue Recognition and Expenses - Revenue recognition for product sales occurs when control of goods is transferred to the customer, with shipping not considered a separate performance obligation[238] - The U.S. provision for aggregate customer discounts (chargebacks and rebates) was $12.5 billion in 2023, $12.3 billion in 2022, and $12.3 billion in 2021[239] - Accrued balances for chargebacks and rebates were $188 million and $2.3 billion, respectively, at December 31, 2023, compared to $178 million and $2.7 billion at December 31, 2022[239] - Depreciation expense was $1.8 billion in 2023, consistent with 2022, and up from $1.6 billion in 2021[240] - Advertising and promotion expenses increased to $2.3 billion in 2023 from $2.2 billion in 2022 and $2.0 billion in 2021[242] - Capitalized software costs are amortized over periods ranging from 2 to 10 years, with longer lives associated with enterprise-wide projects[242] - The company maintains a returns policy allowing U.S. pharmaceutical customers to return products within a specified period before and after expiration[239] - Payment terms for U.S. pharmaceutical customers are typically 36 days, while Keytruda has extended payment terms of 90 days[239] - Research and development expenses include upfront and milestone payments related to asset acquisitions and licensing transactions involving clinical development programs[248] - The company evaluates tax positions to determine whether benefits are more likely than not of being sustained upon audit, recognizing only the amount greater than 50% likely of being realized[252] Acquisitions and Collaborations - Merck acquired the aqua business of Elanco Animal Health for $1.3 billion, expanding its portfolio with products like Clynav and Imvixa, and adding manufacturing and research facilities[258][260] - Merck agreed to acquire Harpoon Therapeutics for $23 per share, totaling approximately $680 million, with a lead candidate HPN328 in Phase 1/2 trials for cancer treatment[260] - Merck acquired Prometheus Biosciences for $11.0 billion, including $1.2 billion for share-based equity awards, with lead candidate tulisokibart in Phase 3 trials for immune-mediated diseases[261] - Merck entered into a global development and commercialization agreement with Daiichi Sankyo for three ADC candidates, with potential milestone payments and royalties[261] - Merck acquired Imago BioSciences for $1.35 billion, including payments for share-based equity awards, with lead candidate bomedemstat in Phase 3 trials for bone marrow diseases[263] - Merck and Kelun-Biotech expanded their collaboration with an upfront payment of $175 million and potential future payments up to $6.575 billion for ADC development[261] - Merck and Royalty Pharma entered into a funding arrangement for a Phase 2b trial of MK-8189, with Royalty Pharma eligible for royalties and milestone payments[264] - Merck and Moderna expanded their collaboration for the development of V940, an individualized neoantigen therapy[264] - Merck and Orna Therapeutics entered into a collaboration agreement with an upfront payment of $150 million and potential future payments up to $3.515 billion for RNA therapies[264] - Merck and Orion Corporation announced a co-development agreement for MK-5684, with an upfront payment of $290 million and potential milestone payments and royalties[264] - Merck acquired Acceleron Pharma Inc. for a total consideration of $11.5 billion, with $280 million in acquisition-related costs[266] - Acceleron's lead therapeutic candidate, sotatercept, is under priority review in the U.S. and EU for pulmonary arterial hypertension (PAH) treatment[266] - Merck retains worldwide exclusive rights to develop and commercialize sotatercept in the pulmonary hypertension (PH) field, paying 22% royalties to Bristol-Myers Squibb (BMS) on future sales[266] - The estimated fair value of assets acquired from Acceleron includes $6.38 billion for IPR&D - sotatercept and $3.83 billion for product rights - Reblozyl[267] - Merck acquired Pandion Therapeutics for $1.9 billion, with $147 million in costs primarily for share-based compensation[268] - Merck and Gilead Sciences entered into an agreement to jointly develop and commercialize long-acting HIV treatments, sharing development and commercialization costs 60% Gilead and 40% Merck[268] - Merck and AstraZeneca share profits equally from Lynparza and Koselugo product sales, with Merck recording $1.296 billion in total alliance revenue in 2023[271][272] - Merck made a $400 million sales-based milestone payment to AstraZeneca in 2022 and accrued a $600 million liability for future milestone payments[271] - Merck and Eisai share profits equally from Lenvima product sales, with Merck recording $960 million in alliance revenue in 2023[274] - Merck made sales-based milestone payments to Eisai aggregating