Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from Debt

Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

153b46a73e00df8cc6961df5ff1b6c10cd615aa754997ab5ebade64bcc04fae5

Merck & Co., Inc. (Merck) is a global healthcare company that operates through two main segments: Pharmaceutical and Animal Health. The company develops and sells human health pharmaceutical and vaccine products, primarily by prescription, for the treatment of human disorders, as well as veterinary pharmaceutical and vaccine products for livestock and companion animals **[0001628280-24-006850_mrk-20231231.htm:3]** **[0001628280-24-006850_mrk-20231231.htm:79]** **[0001628280-24-006850_mrk-20231231.htm:209]**. Merck's revenue growth is driven by strong performance in oncology, vaccines, and animal health, with significant contributions from products like Keytruda and Gardasil/Gardasil 9 **[0001628280-24-006850_mrk-20231231.htm:3]** **[0001628280-24-006850_mrk-20231231.htm:209]**.

1. **Pharmaceutical** - Develops and sells human health pharmaceutical and vaccine products, primarily by prescription, for the treatment of human disorders. Key products include Keytruda and Gardasil/Gardasil 9, which are major contributors to revenue growth.
2. **Animal Health** - Focuses on veterinary pharmaceutical and vaccine products, as well as health management solutions for livestock and companion animals. Includes digitally connected identification, traceability, and monitoring products.
   - **Livestock Products** - Provides pharmaceutical and vaccine products for livestock health management.
   - **Companion Animal Products** - Offers pharmaceutical and vaccine products for the health of companion animals.

a899a8df675df5cd8cd7231f294f41b9c9d608f70c57564cd3359b763efb0c09

| Geographical Segment | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| United States (USD million) | **6,279**  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | **6,659**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | **7,018**  **[0001628280-23-027770_mrk-20230630.htm:45]**  | **7,715**  **[0001628280-23-036717_mrk-20230930.htm:54]**  | **7,088**  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | **7,478**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **7,876**  **[0001628280-24-034715_mrk-20240630.htm:51]**  | **8,736**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| Europe, Middle East, and Africa (USD million) | N/A | **3,303**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **3,327**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **3,563**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **3,515**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **3,583**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| China (USD million) | N/A | **1,715**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **1,694**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **1,772**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **1,817**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **1,017**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| Japan (USD million) | N/A | **758**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **1,081**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **821**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **686**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **938**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| Latin America (USD million) | N/A | **661**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **895**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **796**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **858**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **936**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| Asia Pacific (other than China and Japan) (USD million) | N/A | **846**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **781**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **724**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **748**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **823**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| Other (USD million) | N/A | **545**  **[0001628280-23-015990_mrk-20230331.htm:36]**  | N/A | **469**  **[0001628280-23-036717_mrk-20230930.htm:50]**  | N/A | **621**  **[0001628280-24-020283_mrk-20240331.htm:41]**  | **612**  **[0001628280-24-034715_mrk-20240630.htm:47]**  | **624**  **[0001628280-24-045689_mrk-20240930.htm:50]**  |
| International (USD million) | **7,551**  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | N/A | **8,018**  **[0001628280-23-027770_mrk-20230630.htm:45]**  | N/A | **7,542**  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | N/A | N/A | N/A |

6d3cb2a6c8d86631e24e770ca5b6c23faf981e2169fb163ada2a3a4b38027ac2

baa6aecdc730bbd4de28c30fb3aa5b87f2abd248bffde3a6026481e2588b3d9f

| Metric [Unit: $ Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Total Sales**          | 13,830  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | 14,487  **[0001104659-23-050654_tm2313695d1_ex99-2.htm:1]**  | 15,035  **[0001104659-23-086030_tm2322190d1_ex99-2.htm:3]**  | 15,962  **[0001104659-23-111585_tm2328962d1_ex99-2.htm:3]**  | 14,630  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | 15,775  **[0001628280-24-020283_mrk-20240331.htm:40]**  | 16,112  **[0001104659-24-083722_tm2420272d1_ex99-2.htm:4]**  | 16,657  **[0001628280-24-045689_mrk-20240930.htm:49]**  |
| **Pharmaceutical Segment** | 12,180  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | 12,721  **[0001104659-23-050654_tm2313695d1_ex99-2.htm:1]**  | 13,457  **[0001104659-23-086030_tm2322190d1_ex99-2.htm:3]**  | 14,263  **[0001104659-23-111585_tm2328962d1_ex99-2.htm:3]**  | 13,141  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | 14,006  **[0001628280-24-020283_mrk-20240331.htm:40]**  | 14,408  **[0001104659-24-083722_tm2420272d1_ex99-2.htm:4]**  | 14,943  **[0001628280-24-045689_mrk-20240930.htm:49]**  |
| **Animal Health Segment** | 1,230  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | 1,491  **[0001104659-23-050654_tm2313695d1_ex99-2.htm:1]**  | 1,456  **[0001104659-23-086030_tm2322190d1_ex99-2.htm:3]**  | 1,400  **[0001104659-23-111585_tm2328962d1_ex99-2.htm:3]**  | 1,278  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | 1,511  **[0001628280-24-020283_mrk-20240331.htm:40]**  | 1,482  **[0001104659-24-083722_tm2420272d1_ex99-2.htm:4]**  | 1,487  **[0001628280-24-045689_mrk-20240930.htm:49]**  |
| **Other Revenues**       | 420  **[0001104659-23-009552_tm235007d1_ex99-2.htm:3]**  | 275  **[0001104659-23-050654_tm2313695d1_ex99-2.htm:1]**  | 122  **[0001104659-23-086030_tm2322190d1_ex99-2.htm:3]**  | 299  **[0001104659-23-111585_tm2328962d1_ex99-2.htm:3]**  | 211  **[0001104659-24-009109_tm244517d1_ex99-2.htm:3]**  | 258  **[0001628280-24-020283_mrk-20240331.htm:40]**  | 222  **[0001104659-24-083722_tm2420272d1_ex99-2.htm:4]**  | 227  **[0001628280-24-045689_mrk-20240930.htm:49]**  |

4777535da7e50ea298fbd8cd251402928375c5b4305c29343aa42243fcf6563d

1. "You've mentioned that GARDASIL shipments to your partner in China have decreased and that inventory at Zhifei remains above historical levels  **[MRK_3405027_1]** ; what specific strategies are you implementing to address the demand challenges in China, and how confident are you in achieving your goal of over $11 billion in GARDASIL sales by 2030  **[MRK_3405027_1]** ?"
2. "Operating expenses have increased significantly due to strategic investments and charges related to acquisitions like EyeBio and Curon  **[MRK_3405027_3]** ; can you provide more detail on how these investments will contribute to your long-term growth and justify the increased expenditure  **[MRK_3405027_6]** **[MRK_3405027_3]** ?"
3. "Given the decline in GARDASIL sales in China and the anticipated similar level of shipments in the fourth quarter  **[MRK_3405027_1]** , how do you plan to mitigate the impact on your overall revenue growth and what other markets are you focusing on to offset this shortfall  **[MRK_3405027_1]** ?"
4. "You have stated that your Phase III pipeline has nearly tripled over the past three years to more than 20 unique assets  **[MRK_3405027_1]** ; can you elaborate on the timing of these assets reaching the market and how they will contribute to revenue in the face of upcoming patent expirations, especially for KEYTRUDA  **[MRK_3405027_1]** ?"
5. "In terms of capital allocation, you mentioned you have capacity to do 'pretty much anything of any size' but are focusing on deals in the $1 billion to $15 billion range  **[MRK_3405027_13]** ; with the increasing competition in the obesity market, why are you limiting your deal size, and how will this approach enable you to remain competitive in high-growth therapeutic areas  **[MRK_3405027_8]** **[MRK_3405027_13]** ?"

12f260a2baefeb1c003a08e6e802db7e1694038ec9d4ee5d96c2bf068c7ef386

- **AbbVie Inc.** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Amgen Inc.** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **AstraZeneca plc** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Bristol-Myers Squibb Company** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Johnson & Johnson** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Eli Lilly and Company** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Gilead Sciences Inc.** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **GlaxoSmithKline plc** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Novartis AG** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Pfizer Inc.** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Roche Holding AG** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .
- **Sanofi SA** - Part of the composite peer group of major U.S. and European-based pharmaceutical companies  **[0001628280-24-006850_mrk-20231231.htm:78]** .

5a3ee5c45696d44deef6d76af63e0d1abbf82b6c277574b875dce6588007993b

United States

Europe, Middle East, Africa

China

Japan

Latin America

Asia Pacific

Other

Total Revenue

859a95809f78ea0659f4bf15cf76ba11140d0c326997a75862fa47dce3a13540

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

bf27c5f90e6803e13d95b840d8fe72cc4f2aece4933f9424ef1744c5af3c2651

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

4d2f2929532d2b2541f1b3ddfbe26aaae39ed198b157d2236d2fd3621d10ebba

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $63.6 billion to $64.1 billion, with 6% to 7% growth, including a 3 percentage point negative impact from foreign exchange  **[MRK_3405027_5]** .
  - **Gross Margin**: Approximately 81%  **[MRK_3405027_5]** .
  - **Operating Expenses**: $27.8 billion to $28.3 billion, including a $750 million onetime charge related to the asset acquisition from Curon  **[MRK_3405027_5]** .
  - **Other Expense**: Approximately $100 million, including a $170 million payment from Daiichi  **[MRK_3405027_5]** .
  - **Tax Rate**: 16% to 17%, including an unfavorable impact related to the Curon transaction  **[MRK_3405027_5]** .
  - **Shares Outstanding**: Approximately 2.54 billion shares  **[MRK_3405027_5]** .
  - **Earnings Per Share (EPS)**: $7.72 to $7.77, including a $0.30 negative impact from foreign exchange  **[MRK_3405027_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $63.4 billion to $64.4 billion, with 5% to 7% growth, including a 3 percentage point negative impact from foreign exchange  **[MRK_3394982_4]** .
  - **Gross Margin**: Approximately 81%  **[MRK_3394982_4]** .
  - **Operating Expenses**: $26.8 billion to $27.6 billion, including $1.5 billion of charges related to the acquisition of EyeBio and other investments  **[MRK_3394982_4]** .
  - **Other Expense**: Approximately $350 million, including financing costs for acquisitions  **[MRK_3394982_4]** .
  - **Tax Rate**: 15.5% to 16.5%, including an unfavorable impact from the EyeBio acquisition  **[MRK_3394982_5]** .
  - **Shares Outstanding**: Approximately 2.54 billion shares  **[MRK_3394982_5]** .
  - **Earnings Per Share (EPS)**: $7.94 to $8.04, including a negative impact from foreign exchange of more than $0.30  **[MRK_3394982_5]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $63.1 billion to $64.3 billion, with 5% to 7% growth, including a negative impact from foreign exchange  **[MRK_3380759_5]** .
  - **Gross Margin**: Approximately 81%  **[MRK_3380759_5]** .
  - **Operating Expenses**: $25.2 billion to $26.1 billion  **[MRK_3380759_5]** .
  - **Other Expense**: Approximately $250 million  **[MRK_3380759_5]** .
  - **Tax Rate**: 14.5% to 15.5%  **[MRK_3380759_5]** .
  - **Shares Outstanding**: Approximately 2.55 billion shares  **[MRK_3380759_5]** .
  - **Earnings Per Share (EPS)**: $8.53 to $8.65, with a $0.07 increase at the midpoint despite a $0.30 negative impact from foreign exchange  **[MRK_3380759_5]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  - **Revenue**: $62.7 billion to $64.2 billion, with 4% to 7% growth, including a 2% negative impact from foreign exchange  **[MRK_3371534_4]** .
  - **Gross Margin**: Approximately 80.5%, benefiting from reduced royalties  **[MRK_3371534_4]** .
  - **Operating Expenses**: $25.1 billion to $26.1 billion, including a $650 million onetime charge related to the acquisition of Harpoon Therapeutics  **[MRK_3371534_4]** .
  - **Other Expense**: Approximately $200 million  **[MRK_3371534_4]** .
  - **Tax Rate**: 14.5% to 15.5%  **[MRK_3371534_4]** .
  - **Shares Outstanding**: Approximately 2.54 billion shares  **[MRK_3371534_4]** .
  - **Earnings Per Share (EPS)**: $8.44 to $8.59, including a $0.26 per share charge related to the acquisition of Harpoon Therapeutics and a $0.25 negative impact from foreign exchange  **[MRK_3371534_4]** .

cbe3cf98d7f1772a94157e695eee476c0e6de90e14a645fd03553a751b5703a9

| Name                  | Position                                                      | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|---------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Robert M. Davis       | Chairman, Chief Executive Officer, and President              | December 2022    | Robert M. Davis is the **Chairman, Chief Executive Officer, and President** of Merck & Co., Inc., roles he has held since **December 2022**. He joined Merck in 2014 and has held various leadership roles  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001193125-24-093204_d500367ddef14a.htm:44]** .                                |
| Caroline Litchfield   | Executive Vice President and Chief Financial Officer          | April 2021       | Caroline Litchfield is the **Executive Vice President and Chief Financial Officer** at Merck & Co., Inc., a position she has held since **April 2021**. She was previously the Senior Vice President, Corporate Treasurer  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                |
| Sanat Chattopadhyay   | Executive Vice President and President, Merck Manufacturing Division | March 2016       | Sanat Chattopadhyay is the **Executive Vice President and President of the Merck Manufacturing Division**, a position he has held since **March 2016**. He oversees Merck's global manufacturing operations  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001193125-24-093204_d500367ddef14a.htm:57]** .                               |
| Richard R. DeLuca, Jr.| Executive Vice President and President, Merck Animal Health   | September 2011   | Richard R. DeLuca, Jr. is the **Executive Vice President and President of Merck Animal Health**, a position he has held since **September 2011**. He has contributed significantly to the company's operations and growth in the animal health sector  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** . |
| Dean Li, M.D., Ph.D.  | Executive Vice President and President, Merck Research Laboratories | January 2021     | Dean Li, M.D., Ph.D., is the **Executive Vice President and President of Merck Research Laboratories**, a position he has held since **January 2021**. He was previously the Senior Vice President of Discovery Sciences and Translational Medicine  **[0001628280-24-006850_mrk-20231231.htm:76]** . |
| Cristal Downing       | Executive Vice President and Chief Communications & Public Affairs Officer | August 2021     | Cristal Downing is the **Executive Vice President and Chief Communications & Public Affairs Officer** at Merck & Co., Inc., a position she has held since **August 2021**. She previously worked at Johnson & Johnson  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                     |
| Chirfi Guindo         | Senior Vice President, Chief Marketing Officer, Human Health  | July 2022        | Chirfi Guindo serves as the **Senior Vice President and Chief Marketing Officer, Human Health** at Merck & Co., Inc. since **July 1, 2022**. He was previously at Biogen Inc.  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001193125-23-089525_d277607ddef14a.htm:98]** **[0001628280-24-006850_ex1030-mrkchirfiguindooffe.htm:0]** .                                                         |
| Michael A. Klobuchar  | Executive Vice President, Chief Strategy Officer              | July 2021        | Michael A. Klobuchar is the Executive Vice President and Chief Strategy Officer at Merck & Co., Inc., a position he has held since **July 2021**. He has held various strategic roles within the company  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                                  |
| Steven C. Mizell      | Executive Vice President, Chief Human Resources Officer       | October 2018     | Steven C. Mizell has served as the **Executive Vice President and Chief Human Resources Officer** at Merck & Co., Inc. since **October 2018**. He is set to retire effective **July 1, 2024**  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-24-006850_mrk-20231231.htm:77]** .                                            |
| Johannes J. Oosthuizen| Senior Vice President and President Merck U.S. Human Health   | January 2022     | Johannes J. Oosthuizen is the **Senior Vice President and President of Merck U.S. Human Health**, a position he has held since **January 2022**. He previously led Global Oncology Commercial  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                                             |
| Joseph Romanelli      | Senior Vice President and President MSD International Human Health | July 2022        | Joseph Romanelli is the **Senior Vice President and President of MSD International Human Health** at Merck & Co., Inc. since **July 2022**. He was previously CEO at JiXing Pharmaceuticals  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                                              |
| Dalton Smart          | Senior Vice President Finance – Global Controller             | December 2023    | Dalton Smart is the **Senior Vice President Finance – Global Controller** at Merck & Co., Inc. since **December 2023**. He was previously Vice President, Assistant Controller  **[0001628280-24-006850_mrk-20231231.htm:76]** .                                                             |
| David M. Williams     | Executive Vice President, Chief Information and Digital Officer | August 2020     | David M. Williams is the Executive Vice President, Chief Information and Digital Officer at Merck & Co., Inc. since **August 2020**. He previously served as Acting Chief Information and Digital Officer  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                               |
| Jennifer Zachary      | Executive Vice President and General Counsel                  | April 2018       | Jennifer Zachary has been serving as the **Executive Vice President and General Counsel** at Merck & Co., Inc. since **April 2018**. She also holds the position of Corporate Secretary since January 2020  **[0001628280-24-006850_mrk-20231231.htm:76]** **[0001628280-23-005061_mrk-20221231.htm:73]** .                               |

c0eafbbc568622be8453998a4fafd71b2f3246956c99f1528d0ecba8e1773c96

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | October 2018  **[0001628280-24-045689_mrk-20240930.htm:74]** **[0001628280-24-045689_mrk-20240930.htm:79]**  |
| End Date/Duration        | No time limit  **[0001628280-24-045689_mrk-20240930.htm:74]** **[0001628280-24-045689_mrk-20240930.htm:79]**  |
| Total additional amount  | $10 billion  **[0001628280-24-045689_mrk-20240930.htm:74]** **[0001628280-24-045689_mrk-20240930.htm:79]**  |
| Remaining authorization amount | $2.9 billion  **[0001628280-24-045689_mrk-20240930.htm:74]** **[0001628280-24-045689_mrk-20240930.htm:79]**  |
| Details                  | Part of capital allocation strategy to provide competitive returns to shareholders through dividends and share repurchases. Focus on business development and avoiding excess cash on the balance sheet.  **[MRK_1113283_8]** **[0001628280-23-005061_mrk-20221231.htm:105]**  |

21828ddb5409ed864206dcf02dd5ebe7d72bd9a08597b72d2f98947850052e29

**Annual guidance for FY 2024:**
- **Revenue**: $63.6B to $64.1B (6% to 7% growth)  **[MRK_3405027_5]**  (raised from $63.4B to $64.4B (5% to 7%)  **[MRK_3394982_4]** )  
- **Gross Margin**: 81%  **[MRK_3405027_5]**  (no change from prior guidance  **[MRK_3394982_4]** )  
- **Operating Expenses**: $27.8B to $28.3B  **[MRK_3405027_5]**  (raised from $26.8B to $27.6B  **[MRK_3394982_4]** )  
- **Other Expense**: $100M  **[MRK_3405027_5]**  (lowered from $350M  **[MRK_3394982_4]** )  
- **Tax Rate**: 16% to 17%  **[MRK_3405027_5]**  (raised from 15.5% to 16.5%  **[MRK_3394982_5]** )  
- **Shares Outstanding**: 2.54B  **[MRK_3405027_5]**  (no change from prior guidance  **[MRK_3394982_5]** )  
- **EPS**: $7.72 to $7.77  **[MRK_3405027_5]**  (lowered from $7.94 to $8.04  **[MRK_3394982_5]** )  

ab904ffab964b8118d5513d0fd00955cafc7df8716313c7e0bf386afcac0613e

| Name                        | Start Date | End Date | Reason for Change |
|-----------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP | 2002  **[0001628280-24-006850_mrk-20231231.htm:214]**    | Present  | Current auditor   |

ac421b5cc459e78861aed2977d8fffe4c00220a8c8a2a6374b7f0b320d7e8000

- Total Revenue: $16,657 million (+4% YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:49]**   
- Pharmaceutical Segment: $14,943 million (+5% YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:49]**   
- Keytruda: $7,429 million (up **17%** YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:49]**   
- Gardasil: $2,306 million (down **11%** YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:49]**   
- Animal Health: $1,487 million (+6% YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:49]**   
- US Revenue: $8,736 million (up **13%** YoY)  **[0001628280-24-045689_mrk-20240930.htm:50]** **[0001628280-23-036717_mrk-20230930.htm:50]**   
- China Revenue: $1,017 million (down **40%** YoY)  **[0001628280-24-045689_mrk-20240930.htm:50]** **[0001628280-23-036717_mrk-20230930.htm:50]**   
- Net Income: $3,157 million (down **33%** YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:1]**   
- Diluted EPS: $1.24 (down 33% YoY)  **[0001628280-24-045689_mrk-20240930.htm:2]** **[0001628280-23-036717_mrk-20230930.htm:1]**   

ea601b87bbc8145a254cc8a0a694dae2cf767ce807587e53c087054916499110

Number of tumor types for Keytruda in the U.S. (tumor types)

Number of tumor-agnostic indications for Keytruda in the U.S. (indications)

0ab994adad13328a6cef2270ba622f0eabc600ef1d96a5c8e757f14e79fd19f6

49ffd6babf90d33b2b2e623f72803848ec421454de1ca1cb73638f9831ccb22d

0d8acdedbd440ad1c10ae6c0635f0e8419a183641eab25fbc0cdad3127ca4586

1. **Business Development and KEYTRUDA LOE**  
   **Q:** How is Merck addressing KEYTRUDA's 2028 patent expiry?  
   **A:** CEO Robert Davis expressed confidence in Merck's diversified growth drivers beyond KEYTRUDA's U.S. loss of exclusivity in **2028**.    He noted that the expiration is staggered globally—**2031** in China and **2032** in Europe and Japan.    Davis sees it more as a "hill than a cliff" and emphasized their strong pipeline and business development efforts to sustain growth.   

2. **WINREVAIR Launch and Guidance**  
   **Q:** Can you provide color on WINREVAIR's contribution to guidance?  
   **A:** While Merck does not provide product-level guidance, CEO Robert Davis stated they are "very excited" about WINREVAIR's launch for PAH, and it's going well.  **[MRK_3380759_14]**  Prescriptions are increasing, including repeat prescriptions, and coverage policies have been established with several payers.  **[MRK_3380759_14]**  They anticipate European action in the second half of **2024**.  **[MRK_3380759_14]** 

3. **KEYTRUDA Subcutaneous Version**  
   **Q:** What is the outlook for KEYTRUDA's subcutaneous formulation?  
   **A:** Merck expects to share data on the subcutaneous form of KEYTRUDA by early **2025**.  **[MRK_3380759_16]**  Dean Li emphasized its potential to increase access, especially in early-stage cancers, and to be more convenient for patients.  **[MRK_3380759_16]**  By **2028**, the addressable market could be about **50%** of the KEYTRUDA patient population.  **[MRK_3380759_16]** 

4. **Personalized Cancer Vaccine with Moderna**  
   **Q:** Can you update on filing plans for the Moderna cancer vaccine?  
   **A:** Dean Li highlighted their excitement about the personalized cancer vaccine with Moderna.  **[MRK_3380759_19]**  They have a randomized, early-stage trial showing clear clinical benefit and are moving into Phase III in adjuvant melanoma and non-small cell lung cancer.  **[MRK_3380759_19]**  The FDA's decision on early filing would be their own.  **[MRK_3380759_19]** 

5. **RSV Antibody Market Opportunity**  
   **Q:** How is Merck approaching the RSV antibody market?  
   **A:** Merck is excited about clesrovimab, a monoclonal antibody offering passive immunity to infants with a single fixed dose covering the RSV season.    They aim to move aggressively to market, seeing it as an important contributor given competitors' supply constraints.   

6. **GARDASIL Growth and Single Dose Impact**  
   **Q:** What is the GARDASIL growth outlook and impact of single-dose regimen?  
   **A:** Merck expects continued growth for GARDASIL in **2024**, confident in their ability to drive growth as manufacturing scales up.  **[MRK_3380759_20]**  Regarding a potential single-dose regimen, they are conducting comprehensive studies, and any impact would depend on study outcomes and pricing based on benefits provided.  **[MRK_3380759_20]** 

7. **KRAS G12C Program in Lung Cancer**  
   **Q:** How does Merck's KRAS G12C asset differentiate in a crowded space?  
   **A:** Dean Li emphasized their potent compound with a **71%** ORR in combination therapy for non-small cell lung cancer.  **[MRK_3380759_11]**  Their focus is on moving it into first-line treatment and advancing to Phase III, aiming for a potent compound without dose modifications when combined with KEYTRUDA.  **[MRK_3380759_11]** 

8. **Pneumococcal Vaccine V116 and V117**  
   **Q:** What are the prospects for V116 and V117 vaccines?  
   **A:** CEO Robert Davis noted V116 covers **83%** of serotypes causing adult disease, **30%** higher than PCV20, making it compelling.  **[MRK_3380759_13]**  They are optimistic about broad ACIP recommendations possibly extending to adults aged **50** or older.  **[MRK_3380759_13]**  V117 follows a similar strategy for pediatric patients.  **[MRK_3380759_13]** 

9. **Immunology and CNS Pipeline**  
   **Q:** Can you update on the immunology and CNS pipeline?  
   **A:** Dean Li reported that their TL1A program is in Phase III for ulcerative colitis and soon for Crohn's disease.  **[MRK_3380759_12]**  In CNS, they anticipate readouts for MK-8189 and have other advancing programs, with significant investments in neuroscience.  **[MRK_3380759_12]** 

10. **Next-Gen HPV Vaccine**  
    **Q:** How should we view the next-gen HPV vaccine's potential?  
    **A:** Dean Li indicated they are focusing on developing a G9+ vaccine that works well.  **[MRK_3380759_15]**  If successful, it could serve patient populations well and potentially change cancer screening recommendations.  **[MRK_3380759_15]**  Caroline Litchfield added that they aim to vaccinate as many people as possible, pricing based on the benefit provided.  **[MRK_3380759_15]** 

11. **ASCO Updates**  
    **Q:** Any specific readouts at ASCO you're excited about?  
    **A:** Dean Li mentioned a stream of data across several KEYNOTE studies in gastric, hepatocellular, biliary, bladder, and non-small cell lung cancer.  **[MRK_3380759_17]**  They will discuss various programs, including bomedemstat, the KRAS program, ADCs, and more.  **[MRK_3380759_17]** 

12. **Opportunity in Obesity and Cardiometabolic**  
    **Q:** What is Merck's view on obesity opportunities?  
    **A:** Dean Li discussed their cardiometabolic build-out, including the sotatercept launch and developments in GLP for NASH.  **[MRK_3380759_10]**  He noted that different outcomes may require different molecules and sees potential in obesity for accessible, tolerable orals and combinations.  **[MRK_3380759_10]** 

13. **WINREVAIR Access and Assistance**  
    **Q:** Can you expand on WINREVAIR's free assistance program?  
    **A:** Robert Davis stated they are focused on ensuring patient access to WINREVAIR.  **[MRK_3380759_18]**  They have an access program independent of commercial operations, but specifics were not disclosed.  **[MRK_3380759_18]** 

0692f6937bbceb3d6a6ff594f6e2e1137ca4ead80b881884e4f5dacefc5f7577

173f00861aaa71852eb013ab6ae1ec7909e817713d26b0db4123e8ae368686f0

1. **GARDASIL China Sales Outlook**  
   **Q:** How will GARDASIL perform in China in 2025?  
   **A:** Merck expects GARDASIL sales in China to decline in 2025, projecting an opportunity of **$2 billion to $3 billion** annually for the next several years, including the potential male approval anticipated next year. Despite this decline, Merck remains confident in achieving its **$11 billion** long-term target for GARDASIL by 2030.  **[MRK_3405027_15]** 

2. **2025 Growth Outlook**  
   **Q:** What are the main growth drivers and headwinds for 2025?  
   **A:** Merck anticipates solid growth in 2025, driven by KEYTRUDA's expansion into earlier-stage cancers, recent and upcoming launches like **WINREVAIR**, **CAPVAXIVE**, and the anticipated launch of **clesrovimab** in RSV. Growth areas include early-stage non-small cell lung cancer, women's cancers (including early-stage **HER2-negative breast**, endometrial, and cervical cancers), and bladder cancer. Headwinds include the expiration of agreements for **REMICADE** and **SIMPONI** and expected declines in GARDASIL sales in China. Merck will provide official guidance with its fourth-quarter earnings.  **[MRK_3405027_12]** 

3. **Capital Allocation and Obesity Strategy**  
   **Q:** How is Merck approaching capital allocation and opportunities in obesity?  
   **A:** Merck is focused on business development across all therapeutic areas, seeking scientific opportunities that align with strategic value. In obesity, the company is targeting second and third-generation oral therapies that offer medical outcomes beyond weight loss. Merck maintains capacity for acquisitions up to **$15 billion**, emphasizing discipline to ensure alignment with value and strategy.  **[MRK_3405027_13]** 

4. **WINREVAIR Launch and Safety**  
   **Q:** What are early observations from the WINREVAIR launch regarding safety and patient uptake?  
   **A:** Since its commercial rollout, WINREVAIR has shown no significant safety issues, with strong adherence and fewer discontinuations than expected. Approximately **80%** of patients are the sickest, on triple therapy. Most patients start with single vials, transitioning to double vials based on weight, with expectations aligning with the STELLAR trial where about **two-thirds** remain on single vials.  **[MRK_3405027_12]** 

5. **CAPVAXIVE Pneumococcal Vaccine Opportunity**  
   **Q:** What is the market opportunity for CAPVAXIVE with the age expansion to 50+?  
   **A:** The recent ACIP recommendation lowering vaccination age to **50** opens a significant market for CAPVAXIVE. There are approximately **120 million** people over age 50 in the U.S., including **60 million** aged 50-64. Merck anticipates that CAPVAXIVE's strong data, showing **85% adult protection** compared to a competitor's **54% protection**, will drive a majority market share over time.  **[MRK_3405027_14]** 

6. **V940 in Lung Cancer Phase III Trials**  
   **Q:** Why is V940 advancing to Phase III trials in lung cancer?  
   **A:** Merck is initiating a Phase III trial of V940 in lung cancer, built around the KEYNOTE-671 study, which has demonstrated overall survival benefits and received approval. The trial targets patients who do not achieve a pathological complete response after neoadjuvant or perioperative treatment, aiming to improve outcomes with V940.  **[MRK_3405027_20]** 

0f85d7e63ce96a2666a3b5c9a19d59744b3a885d8f8982c2f19024e790deb392

- **Merck expects strong growth in 2024** driven by demand for its key products and **anticipated launches of impactful new products such as sotatercept and V116**.  **[MRK_3371534_12]**
- Merck is expanding its **antibody-drug conjugate (ADC) platform** and plans to **acquire Harpoon Therapeutics**, enhancing its portfolio with **novel T cell engagers** and strengthening its position in oncology.  **[MRK_3371534_22]**
- Merck continues to see **significant opportunity for GARDASIL in China**, including plans to expand to males, and expects **no change in growth potential despite competition**, highlighting **robust demand and growth prospects for their vaccines division**.  **[MRK_3371534_14]**

07935870f11aab54e8c6d9d40bbf78915604c78274cd15008ae8f71c914a1b94

- **Merck expects continued decline in GARDASIL shipments to China into 2025, occurring earlier than originally anticipated, which may impact overall revenue growth.**  **[MRK_3405027_11]**
- **Inventory levels of GARDASIL at their Chinese partner Zhifei remain above historical levels, indicating that recovery in demand may take longer than expected and may require increased promotional efforts.**  **[MRK_3405027_11]**
- **Management did not provide specific guidance for 2025 GARDASIL sales, reflecting uncertainty in the company's outlook in China, a critical market for GARDASIL.**  **[MRK_3405027_11]**

93874afb103d5738ca734e6684545b3f3c0ec75d162b6175647dab9f00152973

1. **GARDASIL Sales Decline in China**  
   **Q:** What caused the GARDASIL sales decline in China?  
   **A:** GARDASIL sales in China declined due to a **significant step down in shipments** from Zhifei to vaccination points in Q2, which was surprising and a departure from prior trends. Multiple factors may be contributing, including China's **anti-bribery and anti-corruption drive**, leading to reduced scientific engagement and fewer immunizations. Despite this, Merck remains confident in the **meaningful opportunity** in the China market.  **[MRK_3394982_9]** 

2. **Impact of Anti-Bribery Actions and Competition**  
   **Q:** Is anti-bribery enforcement or competition affecting GARDASIL sales?  
   **A:** The **recent anti-bribery efforts** in China are believed to impact the HPV vaccine market, affecting scientific engagement and immunizations. Merck does not believe upcoming competition is causing the decline, as GARDASIL remains the **market leader** with stable or increasing market share. They anticipate potential **9-valent competitors** next year but have accounted for this in their planning.  **[MRK_3394982_10]** 

3. **Future of GARDASIL Sales Growth**  
   **Q:** Will GARDASIL sales in China decline in coming years?  
   **A:** Merck expects a **flattening** of GARDASIL sales in China as the female indication becomes fully penetrated, followed by growth with the **male population** coming on board. While acknowledging potential pricing risks, they believe GARDASIL will remain **highly sought after** even with competition, and the market expansion opportunity in China is significant.  **[MRK_3394982_12]** 

4. **Long-Term GARDASIL Growth Path**  
   **Q:** Where is the bigger opportunity for GARDASIL's growth?  
   **A:** Merck sees significant opportunity in both **Tier 1-3** and **Tier 4-5** cities in China, with **30-40% penetration** in females across these tiers. Global GARDASIL penetration is only **about 10%**, indicating substantial room for growth through **male vaccination**, expansion into **low and middle-income markets**, and increased capacity to activate **mid-adult segments**.  **[MRK_3394982_14]** 

5. **Zhifei Contract and Male Indication**  
   **Q:** Does the decline in Zhifei contract sales include male approval upside?  
   **A:** The current Zhifei contract focuses on the **female population** aged 9 through 45 and does not include potential upside from the **male indication**. Merck plans to work with its partner to secure appropriate doses to protect as many males as possible once the male indication is approved.  **[MRK_3394982_17]** 

6. **WINREVAIR Launch and Sales**  
   **Q:** How is the WINREVAIR launch progressing?  
   **A:** As of the end of June, over **2,000 patients** received prescriptions for WINREVAIR, with **75-80%** expected to convert to commercial product. In the quarter, about **1,000 patients** started treatment. The time from prescription to approval is about **two to three weeks**, including insurance approval and patient training. Merck anticipates continued growth in both prescribers and patients.  **[MRK_3394982_11]** 

7. **Future Outlook for WINREVAIR**  
   **Q:** How are WINREVAIR sales expected to trend in Q3?  
   **A:** Merck expects WINREVAIR sales to increase in Q3 due to more patients being prescribed the product and rising stock levels. They remain confident in the outlook for WINREVAIR, consistent with their **high expectations**.  **[MRK_3394982_19]** 

8. **Obesity/Cardiometabolic Business Development**  
   **Q:** What are Merck's plans in obesity/cardiometabolic space?  
   **A:** Merck continues to focus on **early-stage opportunities** and has the financial flexibility to consider deals of all sizes, typically in the **$1 billion to $15 billion** range. In obesity, they are looking at **next-generation** plays, such as oral delivery, high tolerability, combinability, and muscle mass preservation, rather than pursuing **first-generation** treatments.  **[MRK_3394982_20]** 

9. **Additional WINREVAIR Data**  
   **Q:** Have they worked through the initial bolus of WINREVAIR patients?  
   **A:** Merck is still seeing **continued growth** in both prescribers and patients for WINREVAIR and has not yet fully worked through the initial bolus of patients. The majority of current patients are on **triple or double therapy**, including prostacyclin. Access is expected to improve as more insurance plans put coverage in place after the standard **90 to 120 days** post-launch waiting period.  **[MRK_3394982_21]** 

10. **RSV Antibody Filing Plans**  
    **Q:** When will the RSV antibody be filed and available?  
    **A:** Merck plans to file the RSV antibody, aiming for availability in the **next RSV season**, not the current one. The product is not weight-based and can be given as a **single dose** covering the entire RSV season of **5-6 months**. Global markets, including China, are being considered thereafter.  **[MRK_3394982_15]** 

11. **Comparison of Clesrovimab to Competitor**  
    **Q:** How does clesrovimab compare to [byfortis] on hospitalizations?  
    **A:** While specific data are pending public presentation in the second half, Merck is **very confident** in clesrovimab's profile regarding RSV-associated hospitalizations. The antibody can be given as a **single dose**, is not weight-based, and is expected to cover the entire RSV season.  **[MRK_3394982_13]** 

12. **ODAC Recommendations on Lung Cancer**  
    **Q:** Any risk to label extensions due to recent ODAC on peri-adjuvant therapy?  
    **A:** Merck is aware of the FDA's emphasis on overall survival (OS) as the gold standard in earlier-stage cancers and is considering this in their development programs. They highlight having **four** approvals with OS benefit, including **perioperative** treatments in TNBC and lung cancer, and continue to work closely with the FDA.  **[MRK_3394982_16]** 

13. **MK-8189 in Schizophrenia**  
    **Q:** What should we expect from the MK-8189 Phase IIb trial?  
    **A:** Merck's Phase IIa study showed efficacy in schizophrenia with a **reduction in body weight** of about **6 pounds over 4 weeks**, addressing concerns leading to patient discontinuation. If Phase IIb results are comparable, Merck would be eager to advance the program.  **[MRK_3394982_21]** 

14. **Vaxneuvance ACIP Recommendation for Ages 50-64**  
    **Q:** Will ACIP revisit Vaxneuvance recommendation for ages 50-64?  
    **A:** The ACIP expressed interest in **revisiting** the recommendation for ages **50-64** in October, particularly due to ongoing burden and **racial and ethnic disparities** in pneumococcal disease. Merck is confident in their data and looks forward to the potential **expanded age-based recommendation**.  **[MRK_3394982_18]** 

15. **WINREVAIR Script Conversion and Interpath Filing**  
    **Q:** Is the 75-80% script conversion included in FY24 guidance?  
    **A:** Yes, the conversion rate of **75-80%** of WINREVAIR prescriptions to commercial product is embedded within Merck's FY24 guidance. Regarding the Interpath filing, Merck is focused on getting the **Phase III** trial fully enrolled to move forward.  **[MRK_3394982_22]** 

d890f2afe87087874ba7461dc0cc1ee8c70e3bb79b3e2924a53605c2b5fa25f2

- **Merck's Phase III pipeline has nearly tripled over the past 3-plus years to more than 20 unique assets**, fueling substantial new medicine and vaccine launches over the next 5 years, with the majority having **blockbuster plus potential**.  **[MRK_3405027_1]**
- **KEYTRUDA sales grew 21% to $7.4 billion**, driven by increased uptake from earlier-stage cancers and continued robust global demand.  **[MRK_3405027_4]**
- **Strategic business development acquisitions**, including a novel investigational bispecific T cell engager from **Curon**, and the acquisitions of **EyeBio** and the **Elanco aqua business**, are broadening and fortifying Merck's pipeline.  **[MRK_3405027_2]**

84d59e8b4c558257aa435c3526d920e04ead839c8ec050cdb71f1aac150eed01

- **Merck's strong confidence in sustained growth beyond KEYTRUDA's patent expiry**, with CEO Robert Davis expressing that the company is well-positioned with a **more diversified set of growth drivers** due to their **expansive and diverse pipeline**, reducing reliance on a single product.  **[MRK_3380759_21]**
- **Successful early launch of WINREVAIR**, Merck’s first-in-class treatment for pulmonary arterial hypertension, showing **increasing prescriptions**, positive payer coverage, and broad prescriber interest, indicating potential strong revenue growth from this new product.  **[MRK_3380759_14]**
- **Advancement in Merck's cardiometabolic pipeline**, including promising programs in **NASH** and potential opportunities in **obesity treatment**, targeting large addressable markets and signaling significant future growth drivers.  **[MRK_3380759_10]**

0a58c75d0a02cf4f488ac979dd2b69fbcd5cf73dd4156b20be999f1ef9ecb351

- **Merck expects to launch more drugs in the next 5 years than in the last 10 years, many of which are projected to be blockbuster-plus opportunities, indicating a strong and maturing pipeline.**  **[MRK_3394982_22]**
- **The successful U.S. launch of WINREVAIR is off to a strong start, with over 2,000 prescriptions and positive physician feedback, suggesting significant potential for future growth.**  **[MRK_3394982_22]**
- **Merck remains confident in GARDASIL's long-term growth, expecting to achieve sales of over $11 billion by 2030, with China remaining an important market, including potential approval for male vaccination.**  **[MRK_3394982_10]**

feec6c218ccbd9ad491a0d94d89ddb33ed36318c63e9baa4b9b3c84c46d1d6b7

1. **Sotatercept and V116 Launch Expectations**  
   **Q:** Do you include significant revenues from sotatercept or V116 in your guidance?  
   **A:** Caroline Litchfield stated that they are very confident in the underlying momentum of their business and are excited about the potential launches for **sotatercept** and **V116**. For sotatercept, they expect a strong launch due to significant clinical data and many patients already identified who can benefit.  **[MRK_3371534_12]**  For V116, they anticipate that its impact will come toward the end of the year after FDA approval, ACIP recommendation, and MMWR publication.  **[MRK_3371534_12]** 

2. **Margins Outlook Beyond 2024**  
   **Q:** Is this year's margin guidance reasonable until KEYTRUDA LOE?  
   **A:** Caroline Litchfield noted that they expect operating margins to improve in 2024, driven by strong top-line growth and revenue mix due to the roll-off of royalties on **KEYTRUDA** and **GARDASIL**.  **[MRK_3371534_19]**  They aim for an operating margin greater than **40%** in 2025 while continuing to invest in their expansive pipeline to drive long-term growth.  **[MRK_3371534_19]** 

3. **Business Development Plans**  
   **Q:** Will you prioritize deals like Acceleron or Prometheus?  
   **A:** Robert Davis affirmed that they are interested in deals similar in size to **Prometheus** and **Acceleron**, ranging from **$1 billion to $15 billion**.  **[MRK_3371534_16]**  They will continue to prioritize business development, including acquisitions and collaborations, to grow their portfolio.  **[MRK_3371534_16]** 

4. **V116 Market Opportunity**  
   **Q:** What's the peak opportunity for V116 given a shrinking adult market?  
   **A:** Robert Davis believes that **V116**, offering significant incremental coverage of **83%** versus competitors' **50%**, will impact catch-up vaccinations and potentially expand to patients **50+** years old.  **[MRK_3371534_15]**  They see the pneumococcal vaccine market growing from **$8 billion in 2023** to over **$10 billion** later in the decade, with the adult segment being **30%** of that.  **[MRK_3371534_15]**  They remain confident that V116 will have majority share and be a meaningful contributor.  **[MRK_3371534_15]** 

5. **RSV Monoclonal Antibody Opportunity**  
   **Q:** When could your RSV monoclonal antibody be on the market?  
   **A:** Dean Li confirmed that their RSV monoclonal antibody is a single-shot, non-weight-based vaccine for the pediatric population, covering a longer season.  **[MRK_3371534_20]**  They are excited about its potential and expect to be in the market in **2025**.  **[MRK_3371534_20]**  Robert Davis added that it covers the full prevention season of **5 to 6 months** and is differentiated by its fixed dose and low risk of resistance.  **[MRK_3371534_20]** 

6. **Subcutaneous KEYTRUDA Economics**  
   **Q:** How will payers accept subcutaneous KEYTRUDA economically?  
   **A:** Dean Li emphasized that subcutaneous **KEYTRUDA** with hyaluronidase is an innovation demanded by the field, especially for earlier-stage cancers.  **[MRK_3371534_18]**  Robert Davis explained that the quality-of-life benefits justify a premium price, but they will price it competitively to drive volume and conversion, considering the context of a generic IV version.  **[MRK_3371534_18]**  If classified under **Part D**, new catastrophic coverage and caps should lower patient burden, aiding conversion.  **[MRK_3371534_18]** 

7. **China's HPV Vaccine Market**  
   **Q:** Does the 2-dose regimen approval in China pose a revenue problem?  
   **A:** Robert Davis stated that although there are local competitors, Merck maintains the vast majority of share in the private market.  **[MRK_3371534_14]**  The eligible population in China is over **200 million** urban females, with only about **30%** vaccinated—leaving around **120-130 million** unvaccinated.  **[MRK_3371534_14]**  Caroline Litchfield added that they have submitted data on **GARDASIL** for males, expecting to expand their market further.  **[MRK_3371534_14]** 

8. **ADC Platform Expansion**  
   **Q:** Do you plan to expand your ADC platform or add radiopharmaceuticals?  
   **A:** Dean Li affirmed interest in expanding their ADC platform, including new payloads, linkers, and specificity in tissue targeting.  **[MRK_3371534_22]**  They are also exploring peptide drug conjugates and non-chemotherapy payloads.  **[MRK_3371534_22]**  In tissue targeting, they are interested in the IO space, as evidenced by their proposed acquisition with **Harpoon**, which has assets in tissue targeting and immune engagers.  **[MRK_3371534_22]** 

9. **Immunology Platform Development**  
   **Q:** What's the update on your immunology plans after the Prometheus acquisition?  
   **A:** Dean Li explained that they are progressing with trials for the **TL1A antibody** in ulcerative colitis and moving forward with a **Crohn's disease** trial.  **[MRK_3371534_21]**  TL1A may affect fibrosis, which is important in diseases like Crohn's with strictures.  **[MRK_3371534_21]**  They are also advancing other assets acquired from **Prometheus** and are interested in other platforms, including exploratory work in cell therapy for immunology.  **[MRK_3371534_21]** 

10. **TROP2 ADC Strategy in Lung Cancer**  
    **Q:** Does competitor data affect your TROP2 ADC lung cancer strategy?  
    **A:** Dean Li stated that their TROP2 ADC has a manageable adverse effect profile, particularly regarding lung toxicity.  **[MRK_3371534_17]**  They believe TROP2 ADCs will have an impact in lung cancer and are considering how best to combine it—whether with chemo or PD-1 inhibitors.  **[MRK_3371534_17]**  They are mindful of the standard of care (e.g., **KEYNOTE-189**) and are thinking deeply about advancing TROP2 ADC through different lines of therapy.  **[MRK_3371534_17]** 

11. **Need for Biomarker Strategy**  
    **Q:** Will you need a biomarker strategy for TROP2 ADC in lung cancer?  
    **A:** Dean Li acknowledged the importance of a biomarker strategy, especially since it's unclear if any ADC can have as broad an impact as **KEYNOTE-189** or **KEYNOTE-671**.  **[MRK_3371534_13]**  To have substantial advantage, they may need to focus on biomarker-selected patient populations.  **[MRK_3371534_13]**  They emphasize the need for a prospective biomarker strategy that is actionable globally.  **[MRK_3371534_13]** 

12. **V116 ACIP Recommendation and Market Share**  
    **Q:** What does the potential to reach majority market share with V116 imply about ACIP recommendation?  
    **A:** Dean Li mentioned that they will present **STRIDE-3** and **STRIDE-6** data in March, covering both naive and previously vaccinated individuals aged **50+** and **65+**.  **[MRK_3371534_11]**  This data will guide the **ACIP** decision post-FDA approval.  **[MRK_3371534_11]** 

13. **MK-5684 in Prostate Cancer**  
    **Q:** What gives confidence in MK-5684's broad benefit in prostate cancer?  
    **A:** Dean Li explained that MK-5684 is upstream in ablating androgen-fueled growth in prostate cancer.  **[MRK_3371534_10]**  They are interested both broadly and in patients with **AR LBD mutations**, and will advance trials to look at both subpopulations.  **[MRK_3371534_10]**  Statistical analysis specifics are best discussed with clinical teams.  **[MRK_3371534_10]** 

14. **KEYFORM-007 Trial Interim Analysis**  
    **Q:** Has there been any interim OS analysis in the KEYFORM-007 trial?  
    **A:** Dean Li noted that there's interest in demonstrating that a checkpoint inhibitor could have a meaningful impact in **MSS colorectal cancer**.  **[MRK_3371534_8]**  Regarding interim analyses, they generally share data when there's information worth sharing.  **[MRK_3371534_8]** 

15. **Sotatercept Self-Administration Plans**  
    **Q:** Are there plans for sotatercept self-administration?  
    **A:** Dean Li stated they are in conversations with the **FDA** about the best way to treat patients with sotatercept.  **[MRK_3371534_9]**  He highlighted that an **auto-injector** is moving quickly through their pipeline, suggesting a move toward self-administration.  **[MRK_3371534_9]** 

16c3b80f6cb6c352d6170db5c1bb186723f4628c548555a34944950b693f78de

- *1. Increasing competition for key products in important markets:** In China, local competitors have introduced HPV vaccines, potentially impacting Merck's GARDASIL sales growth in the region.  **[MRK_3371534_14]**
- *2. Dependence on new product launches for future growth:** Merck's revenue guidance for 2024 relies on strong launches of new products like sotatercept and V116, which may face regulatory delays or market challenges.  **[MRK_3371534_12]**
- *3. Ongoing need for significant investments in business development:** The company acknowledges it needs more acquisitions like Prometheus and Acceleron to sustain long-term growth, which could strain financial resources.  **[MRK_3371534_16]**

b1982f5eac2866675a33eef6b4a50f3fc66b2942ca89114b000cee32e7437c80

- **Upcoming Loss of Exclusivity for KEYTRUDA Starting in 2028 May Significantly Impact Merck's Revenues, Presenting a Challenge for Sustaining Growth Despite Management's Confidence**.  **[MRK_3380759_21]**
- **Potential Challenges in the Launch and Uptake of WINREVAIR Due to Access and Reimbursement Issues, With Merck Not Providing Specific Details on Patient Assistance Programs or Proportion of Patients Receiving Free Product, Which Could Limit Sales Growth**.  **[MRK_3380759_17]**
- **Key Pipeline Products in Areas Like Neuroscience and Immunology Are in Early Development Stages, With Significant Results Not Expected for 1-2 Years, Raising Concerns About Merck's Ability to Offset Future Revenue Losses From Patent Expirations**.  **[MRK_3380759_12]**

be26ddaa4baf2e2d4ed62c6abc42876e8b9ed492db8218bc8b8d82188fb6b5a2

- **Uncertainty and Potential Decline in GARDASIL Sales in China Due to Market Dynamics and Competition:** Merck acknowledges that GARDASIL sales in China may face flattening or potential decline as the female population becomes fully penetrated, with expected competition from a 9-valent vaccine entrant in 2025. Additionally, anti-bribery and anti-corruption campaigns in China have dampened vaccination efforts, creating uncertainty about future sales. ( **[MRK_3394982_12]** ,  **[MRK_3394982_17]** ,  **[MRK_3394982_10]** )
- **Projected Decrease in Contracted GARDASIL Sales with Zhifei:** The latest contract with Zhifei indicates potential GARDASIL sales declining from around **$4.5 billion in 2024 to approximately $2.5 billion in 2025 and 2026**, suggesting a significant reduction in future revenues. ( **[MRK_3394982_17]** )
- **Earnings Neutral Despite Increased Revenue Guidance Due to Higher Investments:** Despite raising revenue guidance, Merck's earnings outlook remains neutral as increased investments, including those related to business development deals like EyeBio, are offsetting revenue gains, which may impact profitability. ( **[MRK_3394982_22]** )

36d6a21fb0b3e80e9436541a3bb04c74c5d5f4036980dfe62a5c84a93c15d091

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