Core Insights - Merck & Co Inc. reported third-quarter 2025 sales of $17.3 billion, reflecting a 4% increase year-over-year [1] - The company expects full-year sales to be between $64.5 billion and $65 billion, and has raised its non-GAAP EPS forecast to $8.93–$8.98 [3] Sales Performance - KEYTRUDA generated $8.1 billion in sales, marking a 10% increase [2] - WINREVAIR sales surged to $360 million, while CAPVAXIVE contributed $244 million [2] - GARDASIL sales decreased by 24% to $1.7 billion, and Animal Health sales grew by 9% to $1.6 billion [2] Earnings and Financials - Earnings per share were reported at $2.32 (GAAP) and $2.58 (non-GAAP), which included a $0.10 charge related to a tech transfer deal [3] - The company received FDA approval for a new KEYTRUDA injection and shared promising cancer trial data [3] - Merck completed its acquisition of Verona Pharma [3] Company Overview - Merck & Co. Inc. is a global healthcare company focused on scientific innovation to develop health solutions, including prescription medicines, vaccines, biologic therapies, and animal health products [4] - The company's primary focus areas include oncology, vaccines, and infectious diseases [4]

Core Insights - Merck & Co., Inc. reported strong third-quarter earnings, with adjusted earnings per share of $2.58, exceeding consensus estimates of $2.35 and significantly up from $1.57 a year ago [1] - The company achieved sales of $17.28 billion, a 4% year-over-year increase, surpassing analysts' projections of $16.96 billion [1] Financial Performance - The pharmaceutical segment generated $15.61 billion in sales, also up 4% year-over-year, driven by growth in oncology, cardiovascular, and diabetes, while vaccines, virology, and immunology saw declines [2] - The Animal Health segment reported revenue of $1.62 billion, a 9% increase year-over-year, primarily due to strong performance in livestock products [2] Product Performance - Keytruda, an immunotherapy for cancer, generated $8.14 billion in global sales, reflecting a 10% year-over-year increase due to strong demand from metastatic indications [3] - Sales from GARDASIL and GARDASIL 9 vaccines totaled $1.75 billion, down 24% compared to last year, attributed to lower demand in China [3] - The diabetes franchise, led by JANUVIA and JANUMET, saw a 29% increase in sales to $624 million [3] - Newer products, including Winrevair for pulmonary arterial hypertension, experienced a significant sales increase of 141% to $360 million [4] Guidance - Merck raised its fiscal 2025 adjusted earnings guidance to a range of $8.93-$8.98 per share, compared to the previous range of $8.87-$8.97 and the Wall Street estimate of $8.91 [5] - The company narrowed its fiscal 2025 sales outlook to a range of $64.5 billion to $65 billion, compared to the consensus estimate of $64.66 billion [5] M&A Strategy - A Merck executive indicated that the company is focused on potential acquisition deals in the range of $1 billion to $15 billion, with a willingness to consider larger deals [6]

Third-Quarter 2025 Sales and Earnings Merck & Co., Inc., Rahway, N.J., USA October 30, 2025 Strategy and Business Update Robert M. Davis Chairman and Chief Executive Officer Financial Results and Outlook Caroline Litchfield Executive Vice President and Chief Financial Officer Research Update Dr. Dean Y. Li Executive Vice President and President, Research Laboratories Question & Answer Session 2 Agenda Agenda Forward-looking statement of Merck & Co., Inc., Rahway, N.J., USA This presentation of Merck & Co., ...

Financial Performance - Q2 Worldwide Sales reached $15.8 billion, a decrease of 2% nominally and ex-FX[10, 24] - Non-GAAP EPS was $2.13, a decrease of 7%[10] - KEYTRUDA sales increased by 9% to $8.0 billion, driven by strong demand[25] - GARDASIL sales decreased by 55% to $1.1 billion, primarily due to China[31] - Animal Health sales increased by 11% to $1.6 billion[45] Pipeline and Regulatory Updates - FDA approved ENFLONSIA for RSV prevention in infants[14, 61] - FDA accepted NDA for doravirine + islatravir for HIV-1 treatment[14, 61] - Positive topline results were announced for enlicitide in hyperlipidemia and WINREVAIR in PAH[14, 59, 60] Future Outlook - Updated 2025 revenue guidance is $64.3 billion to $65.3 billion, implying +0% to +2% nominal growth[49] - The company anticipates a commercial opportunity exceeding $50 billion by the mid-2030s from recent launches and the late-phase pipeline[20]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [35][36] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current dynamic global environment and emphasized the importance of innovation in addressing health challenges [10][20] - The management team highlighted the ongoing efforts to mitigate potential impacts from tariffs and emphasized a strong inventory position to manage short-term challenges [13][75] - The company remains optimistic about its long-term growth prospects, particularly in light of its expanding late-phase pipeline and the potential for new product launches [18][19] Other Important Information - The company is actively evaluating opportunities for science-driven business development transactions, despite the complexities introduced by the current macroeconomic environment [92][94] - Management acknowledged the disconnect between market realities and seller expectations in the current business development landscape [94] - The company is open to working with the administration on pricing reforms to address the price differentials between the US and international markets [96][100] Q&A Session Summary Question: Can you discuss Merck's mitigating strategies regarding tariffs? - Management highlighted ongoing changes to the supply chain strategy and investments in US manufacturing to mitigate tariff impacts, with a focus on optimizing supply chain operations [70][72] Question: What is the long-term guidance for KEYTRUDA given patent expiry concerns? - Management emphasized confidence in the long-term pipeline, with over 20 new products expected to launch, which could offset concerns related to KEYTRUDA's patent expiry [78][80] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given macro volatility? - Management confirmed that the focus on business development remains unchanged, although the current environment presents complexities in executing deals [92][94] Question: What are the prospects for GARDASIL growth and pricing adjustments? - Management indicated that while GARDASIL growth is expected to slow, particularly in China, they remain committed to ensuring the vaccine's value is understood in pricing discussions [132][130]

Financial Performance - First-quarter worldwide sales reached $15.5 billion, a 2% decrease compared to the previous year, but increased 1% excluding exchange rate fluctuations[1,19] - Human Health sales were $13.6 billion, a 3% decrease, but increased 5% excluding GARDASIL sales in China[19] - Animal Health sales grew by 10% to $1.6 billion[20,36] - KEYTRUDA sales increased by 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and metastatic indications[21,22] - Non-GAAP EPS increased by 7% to $2.22[39] Product Performance - GARDASIL sales decreased by 40% to $1.3 billion, due to soft demand in China[27,28] - WINREVAIR global Q1 sales reached $280 million[33] - CAPVAXIVE sales were $107 million, driven by retail pharmacy demand[27] Pipeline and Regulatory Updates - The FDA accepted the BLA for subcutaneous pembrolizumab with berahyaluronidase alfa[10,76] - The FDA accepted the sBLA for KEYTRUDA in earlier-stage HNSCC[10,76] - The European Commission granted conditional approval for WELIREG for certain RCC and other tumors[52,76] - GARDASIL 9 was approved in China for males aged 16-26[49,73] Financial Outlook - The company maintained its revenue guidance of $64.1 billion to $65.6 billion for 2025[40] - Non-GAAP EPS guidance was updated to $8.82 to $8.97, including a ~$0.06 charge related to a license agreement with Hengrui Pharma[40]

Financial Data and Key Metrics Changes - The company reported total revenues of $15.5 billion, reflecting a decrease of 2% year-over-year, or an increase of 1% when excluding foreign exchange impacts [23][12] - Earnings per share (EPS) were reported at $2.22, with a gross margin of 82.2%, an increase of one percentage point due to a favorable product mix [35][34] - The company maintained its full-year revenue guidance of between $64.1 billion and $65.6 billion, representing growth of 1% to 3% excluding foreign exchange impacts [36][35] Business Line Data and Key Metrics Changes - In oncology, sales of Keytruda grew 6% to $7.2 billion, driven by increased uptake in earlier-stage cancers and robust demand for metastatic indications [25] - GARDASIL sales decreased by 40% to $1.3 billion, primarily due to reduced demand in China, while global growth excluding China was strong at 16% [27][24] - The animal health business saw sales increase by 10%, reflecting higher demand across all species and contributions from the Aqua portfolio acquired from Elanco [32] Market Data and Key Metrics Changes - The decline in GARDASIL sales in China was approximately $1.1 billion, which reduced growth excluding foreign exchange by seven percentage points [24] - Outside of the US and China, GARDASIL experienced strong demand, particularly from a catch-up cohort in Japan [27] - The company noted that the ongoing launch of WinRevair generated global sales of $280 million, with significant uptake in both the US and international markets [30] Company Strategy and Development Direction - The company is focused on balancing its manufacturing footprint and has invested $12 billion in US manufacturing since 2018, with an additional commitment of over $9 billion through 2028 [11][10] - The strategic direction emphasizes the advancement of a robust pipeline, with over 20 promising new products expected to launch in the coming years, potentially generating over $50 billion in commercial opportunities by the mid-2030s [16][19] - The company is committed to maintaining its dividend and prioritizing investments in business development to drive growth and returns for shareholders [42][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for improved growth in the second half of the year, despite challenges from tariffs and foreign exchange impacts [12][13] - The company is well-positioned to navigate the potential impacts of tariffs due to its global supply chain and inventory management strategies [13][70] - Management highlighted the importance of scientific leadership and innovation as key drivers for long-term value creation [20][19] Other Important Information - The company has nearly tripled its late-phase pipeline since 2021, with significant advancements in oncology, cardiometabolic diseases, and HIV treatments [16][14] - The FDA has set PDUFA dates for several key products, including subcutaneous pembrolizumab and doravirine-based regimens, indicating a strong pipeline of upcoming approvals [60][56] Q&A Session Summary Question: Can you discuss Merck's strategies to mitigate tariffs? - Management highlighted ongoing efforts to rebalance the supply chain and invest in US manufacturing to mitigate the impact of existing tariffs, with a focus on optimizing supply chain strategies [70][72] Question: What is the long-term guidance for KEYTRUDA? - Management emphasized confidence in the long-term potential of the pipeline, with over 20 new products expected to drive significant revenue growth, but did not provide specific line-by-line guidance [78][79] Question: Can you comment on the FDA's recent changes and their impact on vaccines? - Management noted that while there are active dialogues with the FDA regarding imminent PDUFA dates, the long-term impact of personnel transitions remains uncertain [85][86] Question: What is the environment for business development given current macroeconomic conditions? - Management acknowledged the complexities in the current environment but reaffirmed their commitment to pursuing science-driven business development opportunities [92][94] Question: What are the expectations for GARDASIL growth moving forward? - Management indicated that while GARDASIL growth is expected to slow, strong growth is anticipated outside of China, and they are focused on maximizing opportunities in the market [132][131]

Group 1 - The company is in a strong position, supported by a robust portfolio of commercial products addressing significant medical needs [2] - Growth expectations for 2025 are driven by strengths in oncology, animal health, and new product launches, which are anticipated to offset challenges from GARDASIL in China [3] - The company aims to sustain strong growth into 2026 and 2027, with a focus on execution and performance of existing and new products [3]