Merck & Co (NYSE:MRK) Update / Briefing November 09, 2025 07:01 PM ET Speaker0Welcome to the Merkin Co. Incorporated, Rawlway, New Jersey, USA Investor Event. At this time, all participants are in a listen only mode until the question and answer session of today's conference. This call is being recorded. If you have any objections, you may disconnect at this time.I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin.Speaker1Thank you, I ...

Core Insights - Merck's new oral cholesterol-lowering pill, enlicitide, has shown a nearly 60% reduction in LDL cholesterol, positioning it as a potential competitor in the $47 billion cholesterol treatment market by 2033 [2][4]. Group 1: Product Development and Efficacy - Enlicitide works by blocking the PCSK9 protein, which is linked to elevated LDL cholesterol levels and cardiovascular issues [2]. - In a study involving 2,912 patients who could not achieve LDL goals with traditional treatments, enlicitide demonstrated a 55.8% greater reduction in LDL cholesterol compared to placebo, with a placebo-adjusted reduction of 59.7% after excluding an outlier [4]. - Other cardiovascular risk factors, including total cholesterol and markers like ApoB and Lp(a), also decreased, and enlicitide's safety profile was comparable to that of the placebo [5]. Group 2: Market Position and Competition - Merck plans to seek FDA approval for enlicitide in early 2026, aiming to compete with injectable PCSK9 inhibitors like Repatha and Praluent, which have historically faced challenges in market adoption [5]. - Repatha's sales increased by 40% year-over-year to $794 million, while Praluent's sales rose nearly 13% to $215.7 million in the third quarter, indicating a strong market presence for these injectable treatments [6]. Group 3: Patient Accessibility and Usage - Enlicitide is designed to be more accessible, requiring patients to fast for 30 minutes before taking the pill, with 97% of patients able to comply with this requirement [7]. - The ease of use and safety profile of enlicitide could significantly impact public health by providing a viable treatment option for a broader range of patients [8].

Financial Data and Key Metrics Changes - Merck is in a transformation phase with a diversified set of growth drivers, aiming for over $50 billion in revenues by the mid-2030s from its pipeline [3][4] - The company is launching 20 products, most of which have blockbuster potential [3][4] Business Line Data and Key Metrics Changes - KEYTRUDA continues to show strong growth with 42 approved indications in the U.S. across 18 tumor types, with expectations for continued growth from new indications [6][7] - The subcutaneous formulation of KEYTRUDA is anticipated to achieve 30% to 40% adoption within 18 to 24 months post-launch [9][11] Market Data and Key Metrics Changes - The company is well-positioned to manage the impact of tariffs and has a diverse supply chain footprint [41][42] - The impact of the Most Favored Nation (MFN) policy is expected to be manageable, as it only accounts for less than 10% of revenues [42][43] Company Strategy and Development Direction - Merck is focused on innovation and expanding its pipeline, with plans to increase R&D investments due to a strong pipeline of 80 Phase III clinical programs [51][52] - Business development remains a priority, with a focus on bringing in innovative science that addresses unmet medical needs [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the loss of exclusivity for KEYTRUDA and emphasized the importance of their pipeline in driving future growth [5][6] - The company is optimistic about the readouts from its oncology and HIV pipelines in the coming year [80][81] Other Important Information - The company is preparing for the launch of its oral PCSK9 inhibitor, which is expected to democratize access to this treatment [60][62] - Merck is also excited about its cancer vaccine program, focusing on early-stage cancers with potential curative opportunities [39][40] Q&A Session Summary Question: What are the growth avenues for KEYTRUDA? - Management expects continued growth from new indications, including early-stage lung cancer and women's cancers [7][8] Question: How will the adoption of the subcutaneous formulation of KEYTRUDA be affected? - Factors such as pricing, access, and the J code will influence adoption rates, with expectations of 30% to 40% adoption within 18 to 24 months [10][11] Question: What is the confidence level in the TROP-two ADC program? - Management expressed confidence based on early signals and extensive clinical trials, highlighting its unique properties and potential in maintenance settings [17][18] Question: How does Merck plan to address macroeconomic headwinds like tariffs? - The company has a diverse supply chain and is well-positioned to manage tariff impacts, focusing on innovation and product launches [41][42] Question: What is the outlook for Gardasil in China? - Gardasil is not expected to drive significant growth in China, with future growth anticipated from international markets and new product launches [69][70] Question: What are the expectations for the cancer vaccine program? - The program is focused on early-stage cancers, with positive readouts expected in the next couple of years [39][40]

Financial Data and Key Metrics Changes - The company is in a transformation phase with a diversified set of growth drivers, expecting over $50 billion in revenues by the mid-2030s from its pipeline [3][4][5] - The company is launching 20 products, most of which have blockbuster potential [3][4] Business Line Data and Key Metrics Changes - KEYTRUDA continues to show strong growth with 42 approved indications across 18 tumor types, with new indications expected to drive future growth [6][7][8] - The subcutaneous formulation of KEYTRUDA is anticipated to achieve 30% to 40% adoption within 18 to 24 months post-launch [9][11] - The company has 24 oncology assets in clinical trials, focusing on immune stimulation, chemotherapy improvements, and specific targeting agents [13][15] Market Data and Key Metrics Changes - The company is well-positioned to manage tariff impacts due to a diverse supply chain and manufacturing footprint [42][43] - The impact of the Most Favored Nation (MFN) policy is expected to be manageable, with less than 10% of revenues affected [43][44] Company Strategy and Development Direction - The company is focused on innovation and expanding its pipeline, with a commitment to reinvest $3 billion in annual cost savings into R&D [51][52] - Business development remains a priority, with a focus on bringing in innovative science that addresses unmet medical needs [66][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the loss of exclusivity for KEYTRUDA and emphasized the importance of new product launches [5][6] - The company is optimistic about the future, with expectations for positive readouts from its pipeline and successful product launches [78][79] Other Important Information - The company is excited about the potential of its oral PCSK9 inhibitor, which showed a 60% reduction in LDL cholesterol in Phase II trials [59][60] - The company is also exploring opportunities in the GLP-1 space, with an oral formulation expected to enter Phase I trials [62][64] Q&A Session Summary Question: What are the growth avenues for KEYTRUDA? - Management highlighted new indications in lung cancer and women's cancers as key growth opportunities [6][7] Question: How does the company plan to handle tariff impacts? - The company has a diverse supply chain and believes the impact of tariffs is manageable [42][43] Question: What is the strategy for the new PD-1 VEGF bispecifics? - The company is focusing on specific patient strata and therapeutic indications to differentiate from existing treatments [32][33] Question: How will the company approach pricing in light of MFN? - The company plans to price products based on the value they bring, ensuring broad access while being mindful of MFN implications [44][46] Question: What is the outlook for the cancer vaccine program? - Management is optimistic about the enthusiasm from investigators and the potential for early-stage cancer treatments [39][40] Question: How does the company view the future of Gardasil in China? - Gardasil is not expected to drive significant growth in China, with focus shifting to international markets [68][69]

Core Insights - Merck is undergoing a significant transformation with promising developments in its pipeline, including two important Phase III study readouts for enlicitide and FDA approval for clesrovimab, an RSV vaccine [4] - The company has nearly 20 new assets in its pipeline, with ongoing launches of WINREVAIR and others showing strong initial performance [5] Company Developments - Merck announced two key Phase III study results for enlicitide, an oral PCSK9 inhibitor, which yielded positive outcomes [4] - The FDA approved clesrovimab, marking a significant milestone for Merck's RSV vaccine efforts [4] - The company is poised for a series of data readouts and product launches in the near future, indicating a robust growth trajectory [4] Future Outlook - Merck is preparing for nearly 20 additional product launches over the next few years, which is expected to enhance its market position [5] - The ongoing launches of existing products are off to strong starts, contributing to the company's optimistic outlook [5]

Financial Data and Key Metrics Changes - The company is anticipating over $50 billion in revenue by the early to mid-2030s, driven by a diversified set of therapeutic areas including cardiometabolic, immunology, ophthalmology, vaccines, and HIV [4][5] - The company has invested over $12 billion in manufacturing strategy from 2018 to 2024, with an additional $9 billion planned to bring more manufacturing back to the U.S. [16][18] Business Line Data and Key Metrics Changes - The company has nearly 20 new assets and product launches planned over the next few years, marking a significant period of transformation and growth [3][4] - The oral PCSK9, enlicitide, has shown promising results in Phase III studies, with ambitions to be the most potent LDL cholesterol-lowering pill [3][50] Market Data and Key Metrics Changes - The U.S. market for cholesterol management shows that 70% of individuals are not at their cholesterol goals, indicating a significant opportunity for the company's PCSK9 products [49] - The company continues to see elevated inventories in the Chinese market for Gardasil, with expectations for future growth once market conditions improve [36] Company Strategy and Development Direction - The company is focused on executing its pipeline and leveraging its R&D capabilities across both human and animal health sectors, with a strong emphasis on operational synergies [71][72] - The company is committed to addressing drug pricing issues and is engaged in constructive dialogue with the administration regarding the MFN executive order [9][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the safety and efficacy of their vaccines, particularly klezrovimab, despite regulatory uncertainties [23][24] - The company is optimistic about its growth trajectory, with more product launches planned than ever before in a five-year window [47] Other Important Information - The company is actively pursuing business development opportunities, with a focus on identifying strategic assets that align with its scientific goals [40][41] - The company is expanding its immunology focus, particularly around the TL1A class, which is seen as a significant therapeutic target [42][43] Q&A Session Summary Question: What are the expectations regarding the political environment and MFN pricing? - Management indicated ongoing constructive dialogue with the administration and a willingness to collaborate on drug pricing solutions [7][9] Question: How is the company addressing the manufacturing shift for KEYTRUDA? - The company is bringing back KEYTRUDA manufacturing to the U.S. through a phased approach, with significant investments in infrastructure [18][19] Question: What is the outlook for Gardasil sales in the U.S.? - Management acknowledged potential headwinds from discussions around lower dosing recommendations but remains confident in the vaccine's value [26][34] Question: What is the company's strategy for business development? - Management emphasized that the recent slowdown in business development activity is due to timing rather than a change in strategy or urgency [40][41] Question: How does the company view the competitive landscape in oncology? - The company is focused on advancing its broad ADC program and is committed to moving quickly in the oncology space [62][64]