MRK - Earnings call transcript Q4 2019

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Operator

Good morning. My name is Carlo and I will be your conference operator today. At this time, I would like to welcome everyone to the Merck & Company Quarter Four Sales and Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

like of the ahead. Investor now Peter over Dannenbaum, VP Relations. to would call turn to I Please go

Peter Dannenbaum

the you, Executive Officer; I'm and prepared will morning. company XXXX good today, Executive Research Officer; new our Carlo, Labs; Merck's our Chief Officer Perlmutter, Thank quarter Chief be each President Davis, fourth Merck Financial Chairman Welcome and who conference Roger announced by named Kevin have joined to Today, of Ali, Rob Chief Ken Dr. Frazier, we've call. will and of remarks.

by In addition, will I'm Clyburn, of the Commercial also our portion Officer, Q&A joined Officer; Nally, and who Chief call. the Marketing Frank Mike Chief for available be our

like few to point Before the I turn out items. I'd call Ken, over a to

that have such other items. our GAAP see charges, costs will in we and results restructuring items certain acquisition-related as You

in a that release. You and results should these provide non-GAAP note from our press our we've reconciliation excluded

our the also press units have We help the in and quarter sales you business products. provided for to release the table a in understand

on from materially forward-looking underlying prove differ inaccurate assumptions forth Merck's based management that to statements some safe within meaning materialize, risks provision Litigation Securities our the If results and set remind that U.S. the during may Reform statements. be the make forward-looking Private of of of made current beliefs in you Such the significant of or call the of are Act statements uncertainties. XXXX. harbor like considered today's are I'd subject may and we to those statements actual the uncertainties

no cause materially Company's cautionary to XX-K projected publicly any forward-looking statements. identify any from statements of made Merck actual in results update filings, SEC that risk certain XXXX undertakes differ morning. Our factors this Item those statements our obligation in forward-looking to XA and the could including

as as our see can filings on SEC release today's well earnings You merck.com.

the highlights merck.com, section announcements. and from also of includes to our the which a some presentation We Investors results posted of have

that, to the to call I'd like over With turn Ken.

Ken Frazier

morning with consider to of speak be Thank Women’s growth what Products into you, pleased to this Peter. we our a We're spinoff And out Health, we're close through Legacy announce Merck. companies to two leading you the year create as our Brands and an for exceptional excited to company. intention very new we Biosimilar

to had As you year our Merck and that this can strategy on see to of growth value our in strong that shareholders. our position drivers of gives focus and focus guidance, is deliver to an of by a us will and is patients born of position our the we and and financial pipeline. strength, XXXX and from believe results operational driven position greater innovative strength, even It execution best confidence key extraordinary do us what

core have we our also a not CEO, as creating tenure strategy science on entire means my patients, as but benefit only to Throughout the to as focused value. consistently most the of most

coupled shift, experiencing. drivers As we hospital purposeful one you’ve one greater led primary health. oncology, evolved on focus vaccines, to to on are and that portfolio key now care that products prioritization focus growth animal It with is from seen, focus has the largely growth and has unprecedented Merck's on this

XXX growth how of products remainder we must drivers. forward, to products, total. think our these use even more and the to than of see our behind greater Health expansive which Human about is possible Going opportunities comprised best we make invest in focus behind the greater innovative placing of prioritization also portfolio, In carefully

careful leader time, Health to array Therefore, the companies: patients One, into in of Our of with products. separate responsibility us rapidly trusted led and legacy a other, we've after impact the over consideration, two leader; and biosmilars the has decision the potential a a to to expanding biopharmaceutical realize maximize capability vast research of important intensive to women’s think products about how on medically shareholders the full business. can portfolio new health, we and Human becoming a this a focused of company, made

business, NewCo on By of no a which appropriately, can better strategic present Merck’s off fit for set as and which we the spinning a opportunities prioritize support and if patients and framework public real growth. resourced distinct to longer that who and but important remains managed in products rely health them,

innovation. evolving and industry on operating Merck focus landscape science allow in changing model breakthrough also way benefit more mindful We're and to from that will intense this our of even the believe an

As premier value-creation. legacy June, save of to and more research is and I to separation efficiency more years, our past the The NewCo more Company. the aspiration will two improve lives the by diseases. to growth, in in us leads the more our allowing intensive company of Investor stated our rich seen mission our on help be and Day and to on focus that of more how inventing prevent us and focus biopharmaceutical over And prioritization innovations treat have foundation we

for also The significant create opportunities NewCo. spinoff will

will its leader an the future where health, of As area opportunities are company, intent NewCo women’s an strategic in pursue independent significant. global becoming a

will fully as pain, the the of areas, a legacy and addition trusted dermatology, to of women’s In as a dermatology and This health, new in cardiovascular well will fields. brands acquisitions partnerships other in freedom targeted growth opportunities management health have be biosimilars lifecycle additional in full expanding potential fueled and company more and portfolio NewCo's other rapidly realizing growth by business. potential women’s to growth its through strategic pursue

and who Officer. including has of leadership Executive track proven experience record highly a Chief markets a be Kevin deep at experienced Merck with in diverse global has pharmaceutical will team NewCo led Ali, leadership areas. Kevin named been therapeutic by

BioPharma Pharmaceuticals shared prior who And Array with commercialization, chairman particularly board its In of Merck. Schering-Plough, addition, including and as by experience, of chairman Humacyte, as president broad to as merging will in as extensive Global leadership well NewCo's be Board in experience pharmaceutical Women’s has Cox, CEO former former Health Carrie and at

are be will that experienced hands with in this NewCo team. and capable leadership We confident

around industry maximize faces cost this greater Our and challenges increasing to productivity. our access. and the agility, opportunities and must pricing pressures market innovation as we In emerging operational access such rising environment, efficiency of

more continue will public companies better with separate, resource positively and both achieve impact the NewCo growth. health to global to more positioned optimal of be improve and allocation, As Merck focused lives faster patients,

Merck’s attractive As a we with benefit two growth of focused each expect result, characteristics shareholders through ownership to financial profile. and companies,

benefit our the seeing are best opportunities. we its summary, focusing organization on growth of In

XXXX, under As look to is we we believe out strength appreciated. our business at of the

margins every metric, and than more confident financial on growth. key We are consensus EPS revenue, including operating

growing is business. of prospects evident we confidence dividend have to maintaining in the and the the commitment long-term Merck Our for our

the us health by growing operating for structure, reshaping I streamlining fundamental strength strongly Our operating financial and Merck, is for enabling more thing company. and believe to for Merck allow our the agile ahead focusing of shareholders. and stronger, take that right faster to stay this and steps become even bold curve public an to patients,

pass With to on the and on our that, now Rob results discuss to spinoff. provide it I'll Rob? more details

Rob Davis

and good morning, Thanks, everyone. Ken,

increasing was decision business of for well foreign XXXX I'm the to this as growth Human about XX%, and the business, of that a XXXX NewCo. exceptional value our a exchange. increasing of our revenues enhance as will of excluding Merck with our a morning portion non-GAAP decision XX% year excited speak both impact you off to our Health to EPS and spin results,

the strong through performance focus strategy, business spinoff. key we our drivers to reflects our growth as continued we and of our the science-led continue, Our execution on expect our particularly momentum enhance

XXXX start guidance. I'll quarter $XX.X strong before by details or highlighting billion Company transaction Total Health contributed revenues The were X% Health more our year-over-year, our remainder quarter, in pertaining increase to providing the the foreign currency. be excluding the fourth and on an my to Animal results an X% impact sales on the of divisions quarter. growth and negative basis. from ex-exchange will comments Both Human this of

Human X%, year and KEYTRUDA for were versus full revenues led Our by quarter growth In XX% $XX sales billion, $X.X fourth in the exceeded and sales products billion oncology oncology, XXXX. Health hospital. representing grew

patient with demand uptake where all strong strong the KEYTRUDA China. EU, growth in and and driven in renal U.S., indications, neck seeing bladder, continues melanoma globally grew cancers indications. for quarter lung, the momentum adjuvant carcinoma driven uptake reimbursement the by to the across including major XX%, strong head strong all Outside subgroups. and across lead In was lung lung, sales was markets we're many all Japan cell across and by U.S., following and KEYTRUDA in KEYNOTE-XXX across in in now secured approvals

these uptake continue in EU the also expect carcinoma growth to adjuvant from to strong global new launches out. early melanoma and and cell renal positive other seeing both, see in and indications roll as We're

with share collaborations have States. class in Eisai, is inhibitor hepatocellular and of from greater now in AstraZeneca reflect from Lynparza maintains also leading at in and the launch Lynparza both where KEYTRUDA benefited PARP results products cancer, continued strong in continues Our strong important our Lenvima, first-line XX% the Lenvima for carcinoma the agent. than respectively. carcinoma, strength growth total and with patient ovarian in indication, the a continued combination to endometrial treatment United the Lenvima demand Growth and

this of replenishment million and of impacted XXXX, the year-over-year to stockpile $XXX revenues comparison borrowing from XXXX, impact to our the negatively by fourth of the the declined a which the quarter due basis. combined quarter in Our CDC in vaccines stockpile business on from the GARDASIL GARDASIL

driven XX%, grew continued underlying by global revenues GARDASIL strong impacts, these Excluding demand.

growth first hospital sales U.S. business billion an XX% quarter. the from benefited in driven in increased was in BRIDION, by share time Our reached market. the this for annual reversal largely $X which Growth

in Health driven for driven quarter our billion. acquired strong the $X.X growth in Antelliq For increased across achieved by acquisition. to XX% this of growth pillars our the XX% Animal business, geographies. most we was full quarter Human largely year, Growth Health products revenues the by

to XX.X% unfavorable cost for development offset our higher year-over-year, SG&A the partially Other with our Gross securities interest P&L, increase the of expenses and year-over-year. drove was basis. inventory be non-GAAP in decrease the income were margin promotional Administrative XXX portfolio, while spend points the expense. our Operating by quarter, R&D basis comments reflecting XX% expenses $X.X rest the increased Now, expense manufacturing a of income was associated net variances impact on billion equity write-offs. turning efforts and quarter, discovery my responsible impacted higher primarily will a higher of from costs of expense. and by in in clinical positively and

for quarter mix. driven favorable tax by lower Our effective was XX.X%, and earnings rate the

we of XX% Taken an per increase excluding $X.XX earned together, exchange. share,

announced our to turning Now, spinoff.

improve As and patients our shareholders both be Ken further value and single agile than the for respond simpler, will more and operating model and changing noted, accelerate a external growth, landscape, by better two company. as achieved into would to companies, evolving efficiency focused to greater positioned creating separating be

X greater to that it on average point up will Spinning by This gives XXXX. allows But enhance robust on Merck a through percentage drivers more compounded and incremental Merck Merck's growth realize confidence off even key us importantly, growth NewCo accelerates time. revenue over revenue growth basis pipeline. focus its

processes model We the streamlined will from enabling also in further benefit value efficiencies across more operating chain. operations,

represent off share of to Health while spun XXXX For revenues, much products be a into of context, our Human the operations on NewCo larger based about forecast, resources. XX% consuming Merck's and

reduce Human will number by NewCo products SKUs by about number manufacturing separating Merck's of fact, the XX%, and the XX%. by footprint of Health XX% In

as long-term As more even is time, to growth innovation, the in over our achieve has to a value-creation, margins Merck key to additional the creating model, continue will operating headroom and believe operating of referenced. we result which invest Ken optimized higher

investments Merck from portfolio, diabetes financial vaccines, a for balance continue health driven and hospital shareholders. to flexibility, which and developments will with scale, pillars will have and key augment while strong well allow continuing return sheet meaningful commercial capital oncology, and growth pipeline Merck cash as in and to to to animal business our significant its its franchise. flows to benefit innovation will as by continue broad

operational We expect maintaining focused the will financial in the of our we and to Until our first XXXX. and performance. on execute complete remain strong strategy transaction continuing then, half successfully to

remaining as XXXX, a which to Now, operate entity. move continue My in our non-GAAP comments outlook a combined basis. will year we be on for let's a to

a XXXX using rates. full year from expect assumes be X less range and billion impact percentage between growth of which negative XXXX. represents X% than We point to exchange $XX.X revenue to $XX.X mid-January foreign X% billion, versus This

be will Our gross margin XX.X%. roughly

our higher expenses to operating by we the rate expenses R&D committed will to funding expect in We managed. tightly as remain fully opportunities due spending increase to year-over-year SG&A low-single-digit meaningful pipeline. remain

expense. expect $XXX net by expense We of other million, roughly driven higher interest

And shares percentage of year. average We and expect to to we exchange, from represents point XX%, negative be diluted for impact between XX.X% expect a XX.X% $X.XX $X.XX, including our rates. to X% project X.XX tax billion roughly growth mid-January be X.X foreign which rate XXXX. roughly for be EPS to using the We to

revenue demand potential of Longer our underappreciated, as we by we begin growth, continues And term, to XXXX, so Merck to products. growing benefits expect driven out strong is to for revenue looking even believe innovative growth realize transaction. this the more

expect The ratable enables continue margin billion three We to over efficiencies, expansion $X.X years. operating time. meaningful operating separation pre-tax NewCo of over in

combined While initially have margins we expect greater margins in Merck's than higher achieved Merck slightly, operating company. decline than operating to as will XX% would a achieve of XXXX,

credit transaction dividend we expected special from allocation unchanged, profile. to Merck's to a NewCo. of result and to proceeds and expect $X in a solid tax-free billion billion remain The $X maintain is financial capital very priorities from

R&D, best And on these to and fund will activities. we spin-off product in believe foremost, focus and we launches allows the investments growth us opportunities expansion. through capacity better First our

dividend the dividend dividend this share, separation time. $X.XX transaction. by per ratio future XX% payout the XX% increases XXXX And with post of anticipate over current achieving to be unaffected we Merck's will of from goal

will return excess development. will for And repurchase finally, we to shareholders. a We to value-enhancing have to shares continue cash ample as continue way to capacity business

represented Turning an billion approximately Merck. revenue The part achieve NewCo's now products approximately with portfolio XX% as operating of to of expected margin financial $X.X XXXX are company profile. the of by new to

for operate consideration $X to also is time. are $X.X in an As cost revenue and into independent EBITDA time. to achieve of the to an low-single-digit base XXXX a And increase growth margins to Company, the independent finally, low and over off as we increase the operating margins company, expected the Taking be range mid-XX% NewCo to to expected billion. of in NewCo anticipate over in mid-XX% be XXXX range billion

competitive expects a and incremental company any pay entirely dividend. in and strong flows positioned Merck’s to will have meaningful to at as dividend, as cash will sheet a likely growth be peer invest to NewCo balance opportunities which least and

efficiencies achieve operating NewCo that nominally we both that that standalone, owning the without total, be the of with expect the and will In realize spinoff. Merck initially XX combined benefit shareholders expect lower But, Merck EPS result a will companies the EPS combined Merck incremental within than to as NewCo higher of we achieved growth have what of the together will months. realize, XX to would

improved customer capital operating both strong focus pursue and realize entities, sustainable confident companies to have agility success efficiencies, agendas, for growth, prospects including given simplified enhanced are with market growth, reduced for that improved our respond we and and financial accelerate and unique improved summary, In to needs clear and to structures optimized operational future making distinct dynamics, and through the each the profitable spinoff evolving key anticipate drivers will benefits complexity on allocation to resource operated their cases. will as in investment profiles, strategic and compelling models strategic independently

this value by and our create continue to to growth to long-term forward look and deliver opportunity excited companies to shareholders. focused significant We are patients two patient

I'd that, the over turn call to With Roger. like to

Dr. Roger Perlmutter

Thanks, Rob.

XXXX on our FDA much to and weeks was cancer. is non-muscle This the patients represents from on further of KEYNOTE-XXX celebrate. were indication expected as can certain the setting. our an In KEYTRUDA, for reviewed results, quarter that KEYTRUDA back FDA-approved broadening still for FDA the Oncologic in Advisory the at urologic KEYTRUDA in December, three by Looking monotherapy XXrd later bladder high use risk, with Drugs fourth be particular invasive Committee of of meeting, followed approval treatment which the benefit data there

with squamous the head approvals of similar the line on chemotherapy, fourth approval of neck, cell the treatment either for KEYNOTE-XXX with treatment renal also results therapy combination based of first combined and the Japan and study on in gained quarter and carcinoma indication. first cell monotherapy Europe as three during trial. KEYNOTE-XXX as the advanced KEYTRUDA the also new line of carcinoma of KEYNOTE-XXX The in based the or when data permitted KEYTRUDA metastatic

combination China Finally, study. lung we chemotherapy, data of for squamous the KEYTRUDA gained obtained in carcinoma based the in of approval cell in metastatic with of KEYNOTE-XXX treatment the on

in Substantial supported collaboration chemotherapy, the Drugs or Lynparza, FDA in committee a progression leading first majority a of December also line are PARP Lynparza with Committee, in for of was after At whose trial, Oncologic maintenance FDA registration based which in for reduction in patients weeks at approval this we the made progress not use with death the the BRCA-mutated members end the had platinum-based therapy on of disease developing pancreatic our XXXX. colleagues arm. at from XX data progress that of cancer Advisory AstraZeneca. of the as Lynparza first granted disease Lynparza demonstrated inhibitor line metastatic risk at the least X XX% of setting Phase all germline treatment POLO

maintenance I trial should plus ovarian of plus the cancer In line the by date review with PAOLA-X chemotherapy priority year. the FDA XX%. of accepted responded that reduced PAOLA-X with quarter platinum-based treatment our PDUFA bevacizumab, for bevacizumab risk first progression from this of disease also Lynparza note or the second were of advanced women to had death of by the data Lynparza

Phase review quarter Additional the FDA cancer selected metastatic of X second the study the in castrate in treatment prostate the also trials date PROfound men the XXXX. based the PDUFA with use was of results for resistant mutation accepted supporting with of on of Lynparza priority the by the

new cancer areas. progress we during While treatments, fourth the other quarter, we're certainly in important very in active advancing made also

positive review the combination to the treatment opinion cilastatin, resistant imipenem, the Agency with in relebactam of also Committee FDA June for for priority due hospital-acquired with patients infections pneumonia highly for European of for the Use Products RECARBRIO, is Medicinal and bacterial a of susceptible date Human infections, ventilator of example, of by other novel the or our for RECARBRIO management adult aerobic adopted For by demonstrated to Medicines Xth. bacterial the with resistance caused treatment agent. under gram-negative of PDUFA organisms bacteria the associated

failure X the is colleagues being risk the in found medicine composite patients Important placebo, in activator the of with failure therapy. also mortality reduce which a to Phase VICTORIA fraction failure Bayer, cardiovascular cardiovascular was heart at compared receiving hospitalization, vericiguat, or developed are in the with made of with heart standard worsening completion collaboration cyclase progress guanylate who in with novel ejection study, as reduced heart

permit we the other the many clinical in to list not does and me quarter. regulatory Time fourth milestones that achieved

cannot fail effective I conditional However, was EMA ebolavirus against approved approval FDA from for and to ebolavirus. that disease vaccine caused the first the note the prevention of ERVEBO, Zaire received by by an the

Congo control by has the It this fatal and feel can Democratic of caused should the taken We have World certain many of disease the and privileged in I high have Health Approvals be of efforts to Zambia, vaccine whereby protocols ebolavirus. support of more African Burundi, which have in other of the Congo. immunized. the an Democratic of including itself, the doses virus Organization Republic this reach obtained nations, risk improve XXX,XXX and than Zaire otherwise and from attempting provided at the Republic use also now contributed process disease to been the the moment. this the way agencies important by individuals colleagues halt Ebola greatly years spread experimental My to to in

will, reduce hope, that and few malignant that important and announced from the Lastly, with objectives I for I’ll the morning. vaccines we’ve diseases. comment of productivity. on of we new this failure simplification and infectious I colleagues suffering wish a enhance My treatment to disease next begin improve heart belief have the that years in over company deep power spinoff to the provide

on increased can confidence to corporate our sharpen separate these have to focus NewCo I effective entity. critically providing focus the a only important highly internally, this we of can while that necessary Simplification itself establish our structure programs. support as near-term implement achieve

call the Ken. to back turn now will I

Ken Frazier

Roger. you, Thank

will take wealth few such Kevin and pharmaceutical and entire before NewCo, on a And three leading his great to Human from Human looks me Turkey. and ranges details to Most Kevin, the drive potential the senior to some of under to to commercial different you and recently, full has shareholders as and to a decades of like invaluable for background. counsel the evaluating at what Merck. and His the turning management I'm Merck's knowledge Germany NewCo, our success share brings experience with call confident region portfolio team. that to reach in regions Health over minutes based leading for on markets including while rest experience instrumental NewCo in the Kevin business, emerging been Health international patients, its envisioning value of optimize like leadership, employees. providing markets entire I'd options Kevin's and

the like over to turn to And with Kevin. that, I'd call

Kevin Ali

opportunity I'm Thanks, medically we of to with the potential a brands. company, Ken, business creation today health, a has rapidly portfolio and you growing portfolio in good our trusted unleash leading women's and and of the believe important morning. new which to legacy remarkable assets excited a share of a of biosimilars

NewCo revenue Merck focus. expected through XXXX due to be flat to within investment limited declining to was

by However, sustainable Merck. we achieve appropriate by focusing of growth believe management's allocating value NewCo resources will outside create attention, and and the that

$X and largely of in to versus due low-single-digit to of to of Zetia U.S. a be the achieve to NuvaRing new Although billion, decline Japan, XXXX billion approximately The expected in base growth that in base. $X.X the revenues well-positioned of off company will to exclusivities are XXXX loss revenue

we LOEs management already and loom opportunities, identified have new As investment commercial underway. lifecycle and no some

opportunities diversification have a global geographic attractive NewCo positioned as on capitalize this portfolio. a be to standalone strong better will will entity across and scale and

fertility will business XX% U.S. and growth through health its growing Nexplanon, implantable leading protection long-acting in leadership pursue contraceptive NewCo patent including with the is reversible and XXXX, sustainable global worldwide grew XXXX. in which women's to and contraceptive

first we health our expect to Nexplanon In women's product. be fact, billion-dollar

development health industry-wide. products women's $XX billion fragmented, growing XXX The is in market highly over with

deliver in and become women. development and this and will to care business more through to investments organic be well-positioned NewCo to leader better both and market to holistic attractive opportunities, opportunity industry on innovative growth an capitalize

NewCo long-term $XXX growth expanding growth with with on in million and rapidly driven the through of biosimilars also of will market three stages its opportunity, currently were marketed be early a the currently products business Samsung the in are XXXX. by products Bioepis. Revenues three partnership approximately

demand to world NewCo cost markets the seek savings market. continue around biosimilar a is well-positioned healthcare through to biosimilar as benefit from adoption greater in increased growing

The sales women's a represent of for time businesses expected revenues to by biosimilar XX% and more health and larger XXXX. than will NewCo's proportion account over are

also its the opportunity trusted NewCo will targeted portfolio have to realize through of focus and the increased full brand of investment. globally potential legacy

Importantly, portfolio this the the support women's generation the infrastructure geographic biosimilar within opportunities health scale, and present. capital that cash broad and provides and growth reach the businesses to

strong Company its to capability advantage. industry as will commercialize and The NewCo's geographic an innovative and competitive addition portfolio, have potentially global distribute will reach serve for scale other In important the product to players.

Finally, a strong flows. stable NewCo will highly cash be and profitable with

growth paying capital the it to its decisions that make or meaningful interests, able including opportunities, to and best suit repurchase. inorganic a will long-term pay-down cash shareholders returning company, a standalone be share through organic allocation As debt dividend,

such to NewCo In of distinct excited Carrie summary, the pillars as growth with of biosimilars. about world Nexplanon, This off pain the and future to of and and build address Company dermatology health to women a opportunity the will Cox. important around the I'm very and have opportunity needs work

NewCo to be patients employees experienced company for positioned values embody shared As Merck talented who dedicated focused create value culture, the better shareholders. and of strong and a global the with will a and resources, footprint

the With Peter. over call like that, turn I'd to to back

Peter Dannenbaum

Thank you, Kevin.

comments today's recognize longer ran than We normal. upfront

call beyond if So, we're a.m. X extend prepared to the necessary.

Carlo, for will you queue So, Q&A? please up line the

Operator

Our J.P. Thank is Instructions] first Schott Please from from go Morgan. ahead. Chris [Operator question you, sir.

Chris Schott

the there today. to news for I related just guess, much very Thanks first the lot a Obviously, both Great. really, this. on of I two had questions. spin.

make for this been my make you've about made NewCo? some spent that’s you're quite the is when or sense timing? Company that I in would past? Is pipeline the and question RemainCo the deal happened some the a I synergies is, with net guess, at that to there I or something relative why the should some for OpEx mentioned that particular that structure think like that guess either versus of as this be time. balanced $X.X the on you've now business And to -- with or want these worked operating assets this now just billion combined what considering second the referring a Should savings very I'm understanding stand-up much. Thanks we against sure have do reduction correctly. goes the costs to in You

Ken Frazier

This is Frazier. Ken

longer Let fit as to now. our to doing fundamental our This strength, that what’s for driven The that term. why allowing that now strategically well for me long growth, is long-term best into products the about this actions Merck, of we're in strategic is why the a organizational allows framework start company financial taking our which the no is with the today new will prosper the opportunities on structure. assure reason being now viability in correct and by as growth focus do us and

opportunity, ability had and legacy time the successful. that right we other was That but you opportunity compounds ago, and around the So, at at for generation the when the flow time. our up we from oncology our standpoint, cash business our product employed of this few is saw were this, from looking example, from as we we A standing ground KEYTRUDA focused around being to an grew which our that allocate has a to didn't behind success have to been that have capital and organization before we know, getting been due entire the KEYTRUDA. up, aligned business and and years extremely

it now. can why we is So, that do

try ways and before, said by brands. one we of losing side, confident And will about the on growth we prospects. of I are saying irrespective And Merck is the grow long-term manifest these dividend which to that our the in we maintain

Peter Dannenbaum

efficiencies? on Rob the Okay.

Rob Davis

-- are way Good is question, should morning, the our Merck up completed, stand Chris. of are you in companies to the so On support spin-off costs think $X.X required the the trillion the about that after efficiencies, is savings your new cost operating after incremental stand to you that within margin is up. take if XX costs. really contemplated new XX%, there's fact That up we it XX% for delta roughly and company mid-XXs the really the point commented operating percentage Merck stand that goes the the

So, that not net Merck forward in billion $X.X those benefits, independent going joined of be from its operating the by results. those will are separate net synergies -- are

Peter Dannenbaum

please, question, Carlo? Next

Operator

from please. question Wolfe Anderson from Tim ahead, Next Go is Research.

Tim Anderson

Thank you. then questions question. spin and on a A couple science of

genuine have wondering new that you the interim, Roche There's have R&D? on trial Health be And more pulled that’s with setting. opportunity. bladder. an you've you, and updated And that that part new own IO PD-Xs on will then, perpetuity? we Should trial the confident in stopped parent is metastatic engine? of failed then, likely slippage, Animal going question remaining we keep the On timelines in if been RemainCo, no even talk the Recently, Animal real with assume When highly ever last its any will is in at the adjutant Roger, PD-X. my out, to we company R&D work doing discussions means in from adjuvant split been about I'm be views on haven't just unlike growth, adjuvant we than seen timeline forward, in company spun Merck R&D come disease this Health. past to sustainable saw to some

to and PD-Xs tumor to are are is, still my you you highly adjuvant? across going broadly confident question work So, types that

Peter Dannenbaum

and research capabilities the NewCo. Kevin, development of Thanks. on

Kevin Ali

morning, Good Thanks. Yes. Tim.

with time, is looking in have choice well-positioned there. and Over as capability, as quality a and will capability partner through development other scale selected will a for selected access. from our biopharmaceutical will to business areas innovators really of move women's presence international of global and are high further patient who realize growth commercial increase NewCo health NewCo core starting its to therapeutic a build then research pillar in a market strategy, development

Ken Frazier

portfolio better which on about perpetuity, Tim, never Animal and review our about entire be to question I'll in going portfolio what's ones of our decisions start happen which we say your make would parts because and off. by regularly portfolio that Health, belong we saying, in

we profitability, look business growth, its you that in continue of we look we if its owners forward. Animal As we advantaged our believe at going to are effect look Health, that you believe, if at at

pillar that that us key the in is that We long also important actually helps an believe growth run.

Health And the there and that pursue in ups business. stability business like having confidently allows R&D our to the know, mission. Animal gives you us a a like business long-term vaccines, downs pharmaceutical actually are having us As

Peter Dannenbaum

Okay. Roger, on adjuvant?

Dr. Roger Perlmutter

Tim, and on PDX immuno-oncology can the antagonists, in about I but the question talk of PD-LX about speak KEYTRUDA. I adjuvant the can't setting, generally

is I-SPY X time. the in as cancer of KEYTRUDA neoadjuvant, study in in melanoma. adjuvant a showed already shown long we all, of well we’ve and in the the setting in not also and as data XXX recently, the the combined study study we'll most that And adjuvant First effective too in effects seeing course the and be neoadjuvant adjuvant breast setting in is

really who you be And survival by pulled shouldn't to overall period a patients are better of are adjuvant expect who data therapy forward, definition, have receiving time. patients because adjuvant longer over

more KEYTRUDA a successful in It results think those when these based think adjuvant exactly roll should And defined cadence. settings, would success as two our And that's prior see So, we'll in well, be with used settings what one general. earlier. better see. on in out I works expects to I

Operator

Go of is from ahead, question Scala please. Cowen. Steve Next

Steve Scala

that One KEYTRUDA, dependent and formation to Merck concern. of seem is risk have this increase is investors the NewCo with would outlook its the concerns view and on heavily of

that So, opposed Januvia forward. within have second, outlook clear this not NewCo a Januvia concern, Merck why. appears to made going was if placing the then, Merck for appreciably leaving and very would much. Merck’s on I'm you It what to within wondering agree as you Thank And seems rationale can NewCo? is elaborate

Ken Frazier

question. Well, Januvia on start let me

be diabetes contributor important believe also to We're and now to going future. is area. Merck into the continuing continue that in an our significant cardiometabolic to the franchise whole do We to research

of So, that's us forward. focus for an going area

this. that. of as small the KEYTRUDA revenues of we a risk, We mindful of revenues increase proportion terms by amount, issue think concentration are In KEYTRUDA around because total of a only

important of both see Company. I execution R&D and our KEYTRUDA the forward. continue benefits our of the growth thing now driving say for in oncology. opportunities would going see more But most going commercial we benefits right we the is it of that about to We terms focus as in other also think, forward see I the that

Lenvima have KEYTRUDA, we Lynparza. than have We and more

We also behind have that. molecules XX

also our business. We have and specialty our hospital vaccines business,

entire Kevin how than we're growth, our not steeply NewCo. brands, which portfolio are the and optimize future much augment to business would they to pipeline in through our these as That's own, our we decline So, looking their development. see so said, more left probably

Peter Dannenbaum

Great. Rob, anything to add?

Rob Davis

as build NewCo. opposed your point of Januvia in Merck Steve, just about kind to Yes. why on to

As it, that benefit clearly, continue we we and fundamental flow from strength business cash gives. that to the at look

NewCo year a still loss brand loss and not is growth, for commented, exclusive affect near is frankly, This through exclusivity But, to our through as us. to Merck. at business, it’s deliver And of we've of grow we does already while cash you XXXX, we LOE, it as look each the it flow. generating in in even will be important the Merck for continue the an of While XXXX, if company, not important period. the to term, approach every frankly growing ability a that lot

the So, the the that type company. to clip benefit absorb cash we're of from new be insurmountable exclusivity, would able now, to loss of

do and we on in in continue some it finally, the science area. interesting then, comment detail. But, And more pretty cardiometabolic can to Roger

are And there. so, opportunities exciting

So, well. see as a fit from continue perspective to scientific

than For to all within felt keeping over reasons, it of NewCo. those we that moving more made Merck the sense

Operator

ahead, please. is Citi. Go question of from Andrew Next Baum

Andrew Baum

please. questions, of Couple

your you you’re provide that? Firstly, differentiate an that islatravir versus any there oral the being weight combination able dual whilst gain, of given long-acting waiting of within trials And inhibitor? initiated any combination less Victoza And the Is integrase kind advantage? to commercial absence for does complete, on to possibility of trials. back the your

question Tigit. second to the And relates

time. indicated X give have with molecule One program. of lung. in and perhaps program Phase cell the of run able head and ongoing PD-LX levels excitement to are with to a they Roche talk to you. be know combination that and Thank competitors a may when that I trials? opening registration non-small enter your it your have has for relative you They've you Could a had some head already data us some and timelines,

Peter Dannenbaum

Roger?

Dr. Roger Perlmutter

with combination, the data. for to have of in to islatravir First the wait really we respect all, realty,

molecule evidence that treatment. especially and behaves be extremely Phase that good demonstrated a have we think behave valuable [Ph] that well. to study? we’ve islatravir, We the leading this confident that of our person. which in done and impactable the combination will indicates we're X I It's studies very it with will How in in large work with reasonably it combination, a and behavior pretty also through terrific us

that's be We combination also need regimen. can preventive program. of know you I And We a with islatravir have do And a to what potential data call getting. either by we good itself but to call all or regard those. the what we'll is see But, Tigit, from Tigit.

on been have We working some this for time.

right going molecule alone, ask to We where settings. recognized better which on can we behaves place it. we have it there impressive tried with than And in is KEYTRUDA very in this whole use to have be the had any used? whether a and question a that studies in different find to a We is which compound of variety KEYTRUDA combination under of KEYTRUDA circumstance

enthusiastic we're forward. moving about and it, we're So,

Operator

please. from Louise Our Go next is Cantor. of Chen question ahead,

Louise Chen

Hi. Thanks question. taking for my

you call first on question consensus every that in the you noted So, than my is you're confident XXXX. to through more metric that

wondering if year And price you what then, there Thank KEYTRUDA do And in kind is for impact KEYTRUDA Japan? another here. is you. is cuts you elaborate assume second this you question on potential missing in for on could street price Just what more cut Japan. of coming? think Curious just the

Peter Dannenbaum

Rob?

Rob Davis

in of Really, margins at at that to given and Rob. EPS components, our And our underappreciated our the growth continue Health, to Ken the revenue, forward growth we be made, under-appreciates we if as if Animal on he is this confident growth platform, Louise, oncology Yes. for said few. the cases, name all across comments the most in time. vaccines pillars within Street have and you a look look clearly that the look operating through opportunity, feel meaningful and to believe you GARDASIL just Thanks question. we revenue, continue platform, our

continues. quarters, over story, which about we've several that the last So talking to been you

that, an efforts improvement think really in growth. And clearly then, look through directed spinoff, can that's our team, faster that’s as that the further beyond growth our getting result we leadership up even growth a the itself, appreciated, fact spin not core by you to focus X at not the percentage with as even point mention rate we to run and

important an is well. that as So, part

as instance, margin, take which already margin, achieve $X deploying we've it repurchase from transaction, mix greater margin of acceleration efficiency EPS, operating or $X of you a XX% you accelerated billion And in combined enables, we're top XXXX, of put cost operating to then, than an of billion XXXX. if share in spin that $X.X us today, for when about operating you we enabling And by you proceeds in this what we've going operating on even that think if to further now that dollars acceleration. with potentially indicated get an margins billion natural as in our benefiting look improving from result you incremental XXXX expect been business, the this of

that's under-appreciates margin, we this look factors, you growth. why under-appreciates as under-appreciates EPS out So, believe operating across XXXX, to those select revenue

Peter Dannenbaum

And Frank price on cuts? Japanese the

Frank Clyburn

out impact In We’ve the seeing, same will face indications we And of the we Important to that Frank. as we of within XX.X%. to lung it's significant say, February reduction Japan. should Japan, seen strong the QX this February. a of in sales be be I Louise, note going the February in of our significant range cancer first see based see in will It's continuing reduced XX to important XXXX we in re-pricing projection, many XX.X%. reduction time, Roger a elevate huge you we also when the to will another year, on very in is as have price note performance continue U.S. likely an the significant will Hi globally, our or because other cut our carcinoma in did take April. we beyond sales That renal still cuts, will Japan, that I off Japan, look despite the results in Japan. to we mentioned, now able be we in in uptake as but roll indications and to want and grow indications cell price at have step And back, very as outside we we strong Japan, of see significant if that And in believe do growth see indications Europe. also over reinforce of to rollout

very So, forward. KEYTRUDA. for our we’re Japan, will about in Japan we impact go outlook have we near-term feel as re-pricing good the confident, Clearly, the

Operator

from of Umer is one Next Evercore. Raffat

Umer Raffat

me with little Hi. my simple this, standalone $X? about confirm you EPS guess, you questions first. much a goes one, by down bearing on let I’d with bit the which a That's start appreciate and I so can is, that Thanks me for taking it.

$X you're Women's up and which for you're NewCo. noticed saying add I your billion, focus is diversified, line mentioning it's doing think curious repurchase. RemainCo, on you BizDev, talk I'm the you're about is. if that other goal why when the the proceeds, billion specifically. a the being But, pharma, you about being And that's And that Health, the a innovative is share if which and what's also what cardiology is interesting before pharma very Second, not roughly split, I mentioned finally, there's included. divested noticed to And in I is a I to $X you're spin, not very doing

in interested almost be replacing last So, possibly seems to it me they might that dollar. that

to on much. question my focus you more company dollar at on immediately? a you very which is the that or accretive which pipeline more looking gets deal, is are back a is, So, the EPS side Thank

Rob Davis

Yes. the Umer. question, Thanks for

the business, So, said, I as math get to will, operating to this subtraction, know away you're you on we credit I is pulling the which you're what the think billion will give you thinking doing about efficiencies, any the thing roughly only from Merck dollar. giving would out we relatively. $X.X you I at for by the don't if advise look is and The

dollar the you're proceeds. cash $X is billion in to your that repurchase, quoting, But, coming which we're deploy that $X giving XXXX, share $X.XX year, $X.XX range. you $XXX to with million, first even from, billion to doing reality, to and down if think in to of that's where credit you're math what is not I in the goes So, any then

believe terms of closer is XX%. the in So, you're And percentage, probably thinking to closer we to XX%. answer of

Peter Dannenbaum

Umer in what's asked included And NewCo? as well, Great.

Rob Davis

Yes.

lot picks is a ZERBAXA, very specialty of products we a you if and other excited in but about. look other still which line the at and product, hospital our the like our its are which up So, up picks pharma early products line, launch,

to So, as other believe then, And that space we are ones or look at that continue sitting their the to there's value in portfolio, smaller the those specialty products and long-term maintain. as it in hospital's in that sitting we products be to there we are for are create launched want well. us, numbers revenue

the So, we've aligned it products of drivers the core identified. what NewCo profile really is really than growth that with and different put we already are into the

Peter Dannenbaum

about our think, I Umer’s priorities capital then, was the what question in question with BD combined interest might And allocation be. last

over So, turn let's to Ken. and it with start Rob then

Rob Davis

look allocation the really remain they unchanged. priorities, if So, at capital you

is very what vaccines, meet new oncology First and to to strong we're And to animal pillars capacity development. appropriately ensure underway and fund we the across going going we're the demand dividend. to committed to talked We're expansion of our that. in foremost, research opportunity fund to remain have the products. about have we all ensure growth and to We We health. fund that launch we capacity the going

heard You today, very importantly.

goal is a XX% of to to a payout the which to lowering the of our at XX% to We're that with they dividends not hold NewCo. We result grow get are XXXX, as of $X.XX, in base going and the ratio. dividend as it spin-off off

maintained see the to dividend to over then, going growing actually is you going time. And you're incremental that have NewCo benefit dividend So, have. of a the

you should do today. overall stocks that you those if all-in-all, dividend, So, have more hold we

us from strategy excess To goal find will our ones shareholders and or is as finally, development. first we bring this cash receive the of to return be can’t find why said then, moving to forward. either it for time. we we deployed as And be $X $X and be to believe or value, we've that you repurchase accretive as transaction, extent of flow cash though of to always it’ll billion billion we comments, over in and combination dividend value-creating NewCo share don't foremost pay-down. business said, going for excess look the used those the a development business we're result debt we special That's use to not at And specifically, to as will will

Ken Frazier

this Umer, Ken. is

chose we spin way also was for spin, I our quickest think, shareholders. efficient versus because a this the about doing tax thought path asked you We of and that split.

just and we always say, As an value long-term shareholders. the important said, it looking first as and and will business that I'll for for always growth relates foremost, drive best And we’ve priority. it's are to development, innovation science

pipeline. our did So, of deals on about year, we're to still and we much look XX transactions a focused those our number those the saw licensing, deals, technology clinical science. collaborations. best And opportunities right very pipeline spanning you last continue augment augment We’ll for deals to with

Operator

Next one of America. of Bank Geoff is Meacham

Geoff Meacham

lung. NRDL indication real discussed a where you operating spin and in point the quick, moderation on previously the with to Just op then, in strategy but post guys benefit decision have Merck term, spin, you effect get margin the Frank, lower approval Rob, have capital, line talked up that China longer just did at spin this got about freed IO November. the And does know initially? you the in for with to hear then, investments, year And the this few. on growth right R&D in looking be you XXXX? I I this guys to margins I first of XXXX,

Rob Davis

So, Merck about on look within about operating you at if margin, today, it's question is your what NewCo XX%.

the operating it's higher margin. than obviously So, Merck's

to dilutive, normally pull importantly, year first in the and we initially then $XXX our that billion higher dilution we to achieved million of of And we you're of million three, out going when to be getting year. see fact be growing in margins are our efficiencies, would will cumulative when the offsets with the lot rate by largely at very efficiency. a $X.X first grow. get in continue an look because operating even a margin result of And starting point to But, a as the then, That we over year than the so that additional it percentage time have as operating two, X from XXXX, XX% about the only year million And by another So, year. op you $XXX it's quickly, operating first at $X.X company, $XXX that a it billion. combined of we will dilution. it,

that so, was And I think question. first

one happening second forward. going The think as look what's I was with at we R&D

that what doing the never point as we're going going about, inflection productivity from it’s XXXX. still the point seen slowdown labs the very in which in R&D invest a What's to see XXXX than So, capital thus we we’ve is percent grow they slower in sales That time. we I'm given it's to was clinical just growth confident of that. If to is to by find opportunities talked in where been going at have more we we inflection the driven It's grow, sales. in far programs driving the constrained this well R&D. do grow, and might that

to our investment our right But as obviously that will those expectation themselves. point of We as XXXX. opportunities increase in now, present is continues inflection happen

Peter Dannenbaum

Frank?

Frank Clyburn

on Geoff, ensuring people in do make families first sure of of the employees’ safety wanted supporting that that and China, focus I your our to China. our mention primary is we on the question

continuity I vaccines going will have we're QX supply in of Health to evolves, think, some to Human the and really and also and to China all of And see likely our medicines of minds how that's on our products. quantify. to see impact

IO, confident strategy, as the feel far discussed, As our your overall as position. we we on on rollout very market, in self-pay we question still as in specific our particular,

carcinoma trying as our assistance only We to very cell adjusted cancer. to recently approval provide that's market. got opportunity access to IO the programs we forward. feel increase are we're for self-pay the move a in approved still in we as China cell squamous for affordability that And in lung therapy population. KEYNOTE-XXX significant in we non-small also though the patients patient And have we've We the

prospects we in forward confident our feel China. KEYTRUDA in growth for So, going

Operator

Next Fernandez one is Seamus Guggenheim. of

Your please? question,

Seamus Fernandez

Thanks question. for the

So, competitive KEYTRUDA one could clinical potential a concentration Merck's little Steve's maybe to questions. forward, forward. about little talk pressure you cancer just U.S. bit But, of -- of be a China. the going bit emerge Can also could business that business The follow-up into the on are lung assets introduced talk points successful going Chinese to just program. that the a there about following

And for better if international trying as X. coming But or Just of where potential also us, Company you to quickly and vaccines, of some around and you opportunity the in for the opportunities points? on could Roger, KEYTRUDA potentially market? see most a KEYTRUDA And get of a to of for sense could be which those Phase most term? near And then, you're some a business of tell just growth emphasized them the the excited programs one Roger. going comment see quickly the point two a administration's to pricing, we Thanks. how could potential see lot that you forward. advancing just follow-up risk for efforts would on again, helpful. pressure were How maybe

Peter Dannenbaum

Thanks.

of the So, for KEYTRUDA. first, Frank, kind performance outlook and

Frank Clyburn

Yes.

our recent Roger the head sales. cell as mention been as as cancer. at very with KEYTRUDA, in billion and we KEYTRUDA, eclipsing -- having positioned only are invasive XXXX, with to heard and almost for within very and on cell back carcinoma, if but regards adjuvant the growth We significant XX% as bladder non-small feel U.S., not excluding exchange in pleased impact melanoma, with far penetration well non-muscle saying significant that lung cancer with billion patients $X one, we're, renal approval we've of you to neck, our look So, we're regards $XX also

see U.S., So, which in the And in a as broader and continue our especially not and Europe to is we but data, breadth all in grow, in lot indications we're our in particular, for lung growth I to now indications in ex-U.S. important of of of gives strength cancer. confidence an cell only XXXX. roll out non-small lung, our the our of us markets reimbursed the aspect

would I too. thing piece add the other on The concentration

we've not I think, our tried it's it’s it's it's pipeline KEYTRUDA, that to discussed. oncology highlight we just about Lenvima, in that Lynparza,

this products. We hospital this about also feel performance our our and XX%, very well year. as vaccine as good year specialty GARDASIL grew

growth see to good BRIDION. continue with We

going we we So, from a concentration perspective, opportunities but confident not have that breadth feel the of very the KEYTRUDA, forward. on portfolio, only

Peter Dannenbaum

pricing? on Ken, Right.

Ken Frazier

Okay.

their concerned specifically, that to of of the share the question administration's certain the innovation. understand fair point make countries the continuing that is cost additional we control on We price problem. not keep solution the don't that So, to incorporating pay do

work to provide continue with Congress stakeholders perspective. and to a the the We other administration,

reason model. within providing you back step I take now patient we as on kinds these viability strong innovation much operating a focused because make think it's the very we that. taking issues we of That's growth sure about these But, about think, our and if efficiency steps about is what why we're more groups and today, in perspectives driving want proactive it that to for to future being also relates the position on are and the Company environment. long-term announced

So, of to something this until to. rather curve, environment ahead that pricing the react have is the happens staying we waiting in than about

Peter Dannenbaum

vaccines? And Roger on

Dr. Roger Perlmutter

next Right. pneumococcal for in that studies vaccines studies Seamus, We're year program are XX, with this going of lot months. those have Phase recognize, fact. conjugate an vaccines, you large XX over thanks to a the of the On question. rolling first in see out X all, as program we coming VXXX enormously XX having

those a from so, studies, And permit of ultimately filing. which you’ll data hearing lot be will

So, near-term very that's opportunity. a

at at point. Butantan, collaborating That And of vaccine. registration-enabling our that is results we study vaccine will ongoing. lot colleagues study about have enthusiasm they virus We -- with dengue some a are where a deliver have incidentally

pretty that's exciting as So, well.

addition, our we In course, vaccine. CMV have of

We have a are on, going programs advanced. lot those of interesting things syncytial actually respiratory virus. fairly And

well. are things quite along moving So,

in with can't be to not that obviously time too that our out capability amount will Company. we capital rolling and mention and the fail very GARDASIL manufacturing of invested GARDASIL, a I important And for huge the longer the building demand it to demand colleagues in additional for will that the X meet together remains enormous. fact have be

Peter Dannenbaum

Great.

going. we're We have several at going a but stop X.XX, to going have to more questioners in queue. We're keep hard

Next question, please?

Operator

is from one Next Daina Graybosch of Leerink. please? Go SVB ahead,

Daina Graybosch

of see relationship Roger. long-term Two and the you question. on NewCo. And do the between as next first then, NewCo the for Thanks Merck? for them, What question

to on reflect that novel most you of immuno-oncology top further about, As KEYTRUDA patients? in benefit on add out all excited the internal mechanisms came are data what to external you and for XXXX, provide

Ken Frazier

their opportunities. optimize to in be as terms they of to their make they to companies that best Well, future how sure relationship, that's decided look and long-term want decide both

other is announced over. many me say I say we've the that what So, going Merck values makes will of the they about and forward. today are that of would have obviously I excited can't that think what But, has anything I same than products terms going standards NewCo in

Peter Dannenbaum

Roger?

Dr. Roger Perlmutter

Yes. can Thanks things we're tell for in. the things most the that so we're by investing respects, about, question, Daina. at you looking excited many In

we effectively Phase recently, ongoing protein that special X the KEYTRUDA combine inhibitors demonstrated very renal kinase but cancer and seen KEYTRUDA. tyrosine data, registration it's cell with the with endometrial the Phase in those combination been also demonstrate You remarkably, we've we with really X presented characteristics can and most Lenvima spectacular data, as have carcinoma, quite can that data see in

impressive. with very data have presented in Lynparza which that we We also combination are

and things. there tease in now those data use settings. in really are Let which molecules, referred how me we'll very large We're we which include of of checkpoints some whole to already quite other new directed those set antibodies things this combination. And begin out have already bunch to provocative to that against that best -- available hopeful Tigit a other Lag-X, potential of

here. So, going lots things on exciting of

Operator

is one Stanley. of from please. David Go Morgan Next Risinger ahead,

Peter Dannenbaum

David, are you on the line?

David Risinger

now? hear you Sorry. Yes. me Can

Ken Frazier

Yes.

David Risinger

Great.

So, a I have few questions.

that watch Merck pipeline term? update in an provide the results which where Merck's you in you. VXXX to a potential coverage could to prospects XXXX? stands concept be And offer growth GARDASIL of on added timeline second supply for could the for discuss broader And in you for longer would and to could revenue proof First, to early developing XXXX? GARDASIL manufacturing mid Roger, pneumococcal provide stage Thank the is vaccine addition, for framework infants, you then,

Peter Dannenbaum

Great.

first the think, and supply is outlook. on I question GARDASIL

So, Frank?

Frank Clyburn

Yes, Dave.

world. So, to around to Currently, able very see meet GARDASIL, is with do demand. to our continue regard the we that supply not demand strong

facilities on growth saw new we us continue to we're rates our this then year. The everything XXXX. we we've bulk will manufacturers And manufacturing from with up to seeing do in in in near-term seen believe XX% as the our you've bringing tempered And As mentioned, ramp contract we'll will a manufacturing been slightly help in our we the we be to allow XXXX XXXX, can be strong ultimately and will to we're XXXX mentioning, try do of that supply. growth colleagues to with that demand meet the two really supply globally. focused

Peter Dannenbaum

Roger?

Dr. Roger Perlmutter

with other oncology moving but a of on pipeline, discussed David, mid the in areas early KEYTRUDA, to in that of stage lot have in we forward. that we've are well, combination lot already well programs a as

on are other on vericiguat guanylate Phase the We actually soluble have Of data of and interesting activators. failure, for the results course, building near which will lot a cyclase quite interesting. future which in in X heart results in of the the be things going presented

expect on and I And important ago. on. a that be course quite going of an vaccine programs data that's of data seeing of see something us a for just to a that we lot few our So, to lot area we're mentioned minutes

So, there XXXX. in will data be a of forward coming lot

additional speaking And you of vaccine the program. vaccines, mentioned

just of advanced very pediatric lots will further in both coverage. VXXX VXX and far program in which and provide program year ultimately to were is be shortly. and all reemphasize to, leading VXXX that and and you with is add-on, forward program, settings, adult will moving next be itself. core think, data coming forward given independent the a year vaccine, Phase X by an name And this context, I we’ve I’d will the the pediatric a not referring but that separate which VXXX

more So, discuss there. to

Operator

Next Sachs. one Go of Terence please. from Goldman is Flynn ahead,

Terence Flynn

you forward Just any how expect tax to after until Just that change Thank data is in frontline when terms and for cancer on are that completed. breast couple business update your conversations we spin you. in sizable the if as And maybe any on breast. can development a we implications important expect Does path the timing at X the any from with consider? regulators? triple-negative M&A bolt-ons neoadjuvant approach And And rate shouldn't Phase And this FDA? then, KEYTRUDA need the a metastatic all the there in regarding spin's perspective? then, well. then, wondering, we of with discussions

Peter Dannenbaum

Okay.

start we'll around think, the and timing strategy I Ken that. with our BD and of

Ken Frazier

spin. to timing our standpoint, result in and still or on pipeline the our going and a from augment see to going see opportunities to approach expect we forward, BD a change that. need strategy We very I focused we're of see be as no to the

Rob Davis

Yes. the And then I would tax question. I'll address add to that point, and

said it's As to anything ample do remarks, worth want we reemphasizing, but prepared have to capital I do. in the will we

with to this any constraints a regards not rate, tax But, us meaningful perspective. of the transaction. from see a should a this to as result also capital tax So, in rate our generally speaking, you way change

Dr. Roger Perlmutter

effective And setting, event-free that with complete breast And There of regulatory cancer, very data but on had study. also X course ESMO, response data pathologic thinking we breast impact have to neoadjuvant XXX data. we would see study, XXX will survival have in have ongoing data coming to have you're of cancer discussed. study that. of at about forward breast clear. And we principal, to with in to that the data an yield is to that terms that triple-negative presented continue agencies neoadjuvant the an And we that be right, in cancer, neoadjuvant regard more respect as we in course in the Terence, that with is provocative the Right. Phase conversations triple-negative we very could wait

event-driven, So, coming that It's of relatively sometime course. when. soon know forward don't as I well. be should exactly

Peter Dannenbaum

in We're one Great. last going please, question Carlo. squeeze to

Operator

Mizuho. Goldstein please. Mara is one Last from Go ahead,

Mara Goldstein

Thanks much. Great. very

how should the strategy targets around a And basis. China, has Merck about a understanding a on on and NewCo that a in I absence RemainCo that to as the it, and spin-off NewCo's we've been think to other the wondering part from has And achieving go-forward expected? I'm of which covered as much and we spoken in growth able of on listing, quickly that question NRDL Just growth growth of Merck region China, know responsible but but products KEYTRUDA just portfolio an its business that initiative how a perspective? R&D for has occur be metric is quick organization of China how will of then, advance in component so didn't

Peter Dannenbaum

or add So, question have Kevin, NewCo. around to at this metrics the think there much Rob believe don't I point. R&D on first we I was

Rob Davis

operating XX% say that And I would No. growing in research margin as the development think that business. over and we in the investments time just clearly, about contemplates

And to said they don’t forward. R&D in is we adequately And way he anything other about than in the is business. if what that add I covered so, the we R&D There And, it Kevin doing covered. fully the assumption investments like moving an will resource a be it's feel wanted earlier. been

Kevin Ali

recap of see and start meaningful start to what just research time we start do we'll to to development development think and build earlier we said that opportunities to over the do I capabilities more business to development. as

Peter Dannenbaum

Great. question? And the second

Kevin Ali

China growth.

Peter Dannenbaum

China growth. Yes.

Frank Clyburn

it's to with year it's growth, Januvia broad very is of NRDL. our it's growth GARDASIL, your Lynparza, on discussed, the Zepatier, done is NRDL, as based, it's very on very it's we're XX%. this This placed recently our was is KEYTRUDA, pleased we’ve the And Frank. portfolio With well, China, innovative point, has the Lenvima, Zepatier

opportunities. China. how in nothing significant mentioned, see has the we the about see thinking our and long-term in in we'll going Obviously, So, we as mid unfolds, about have coronavirus, forward our changed to all growth opportunities that China to see but I we're

Ken Frazier

us Thank you all for today. joining

we're said separation As third in and quarter just I complacent, our but are that. of evidence not is call, this confident we

position is for now stronger and for the decision Merck. to We we that is that right right of the time on the believe are one business a convinced future even secure capitalize the to strength

positioned research-intensive shareholders more of drive for and to lasting improve carry value our and mission the better focused very a we As company, we'll save Thank serve. to out lives much. patients be to and biopharmaceutical exist inventing you

Peter Dannenbaum

all. you Thank

Operator

Thank concludes attending. all you. for today's Thank you This call. conference

disconnect. now may You

Merck & Co. (MRK) 5 Feb 202019 Q4 Earnings call transcript