MRK - Earnings call transcript Q4 2021

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Operator

Good morning. My name is Grace Lakra, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Merck & Co. Q4 Sales and Earnings Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After [Operator you. Instructions] Thank the like Investor to now would call Relations. to of I President turn over Vice Peter Dannenbaum, Please go ahead, sir.

Peter Dannenbaum

XXXX Welcome Grace Merck’s good you, morning. Thank fourth and quarter conference call. to

on and Executive President Officer; Dr. Officer; Rob of President Financial Chief Dean Chief call Li, be Litchfield, Merck Speaking today’s and Davis, will Caroline Research Labs.

I’d like few a to items. out started, point get we Before

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

Private note press should prove excluded remind or provision of from would and statements. of Act You Litigation be the we on to that these those may current forward-looking a XXXX. the to today of beliefs considered are are the our materially have meaning differ statements If provide Merck’s uncertainties. the and statements set actual statements Reform our Safe reconciliation significant the non-GAAP forth from make the forward-looking Such inaccurate subject made that you like release. in management uncertainties Harbor assumptions results that and some materialize, in based we our I of results may risks Securities U.S. of underlying within

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

filings posted the of With turn speakers’ release, over like well presentation, that, earnings the section call, a as all Merck’s Rob. prepared accompany slide to SEC remarks. our I’d today’s presentation The Relations to website. to our During will call Investor as today’s are

Rob Davis

of year strong our delivered and Thanks, face and thank joining strategic a Merck has took call. important success molnupiravir, spin-off environment for operational to for key us. foundation morning, and achieved Peter. everyone, including set EPS guidance. We been and our with beyond. on steps pleased XXXX of significant all of in challenging in accelerated achievements reflect meaningful enter We strategic has and the acted business the our for this what We performance, a Organon, to a been initial momentum, and you of are strong on broad in pipeline, progress XXXX today’s activities. development XXXX Good for priorities revenue and completed

growing forward We our benefit the remains to core evolve address faster This and a value the to company, including stakeholders, in more needs. we urgency efficient unmet to continue strategy all our of an innovations for focused, patients bring create with increased more and shareholders. to with critical long-term turn, serve,

XX% Health. the commitment molnupiravir government. progress initial granted Animal and shipments around Use we late meaningful achieved our to delivered customers to world, extremely increased Our We towards was that FDA and of earnings Emergency in strong executed the the performance key full quarter for have revenue business XX% growth. all and year. in and Commercially, made including across well our U.S. Authorization the drivers, revenues December, Total the GARDASIL KEYTRUDA, following

EPS medicines holiday other and diligently, in United and while commercially, States, XXXX, all discovery, we countries Our of by the the Throughout to our furthering all strategic clinically total, including invested worked of dedicated execution production and season, and operating therapy United X.X In of development, strong the XXXX operationally, was vaccines, teams delivering sustainability priorities of growth. fronts: deliver financially. a courses strong meaningful Kingdom long-term commercialization leverage of and through year-end. across year our million business, to the

beyond, achieve XXXX to XXXX and continued we strong out and at expect As growth. to we look

Animal lines of from be will Our many growth therapy. of the global launch through approvals Underlying further the very recent realized XXXX. robust, of GARDASIL And, and in revenue are expect expected increase capacity. will manufacturing of earlier Overall, business Health another remains numerous market, benefit the remains into future. well in and to for demand well strong investments including we faster uptake the portfolio additional growth positioned making year we our oncology than to the indications, grow

and end likely significant make it we growth. on Longer competition P&L headwind can of aspire margin But, and this our to While return to intensely focused a least, we created will confident to beyond achieve continue the expansion. minimize successfully will the pipeline, the the look investments we decade. headwind leveraged the term, are to to period. time takes grow in we that We KEYTRUDA are we at biosimilar strong operating shorten by at and the navigating long-term through very to

We have achieve growth to this multiple task, well into sustained next decade. the levers driving

and and we opportunity and success. sustained a done long-term we establishing maximize to to that our First, strengthen of intend in We’ve oncology excellent therapy, patient leadership KEYTRUDA as broadly its for intend position leverage job impact. foundational an

expanding we addition, an opportunities beyond oncology meaningful In KEYTRUDA, portfolio beyond commercial and growth of XXXX. offer developmental which assets have

franchises the name few. GARDASIL, we believe we can which Animal important decade, durable expect potentially double next pneumococcal portfolio and a many our beyond Health well business, drive oncology our XXXX, including have that we as by can Second, to growth as into

additional neuroscience pipeline fourth, which to to we internal our into in value-enhancing business opportunities intend see expect augment our cardiometabolic, vaccines, longer-term strong will of other development and areas. disease we very bring and the pipeline flow, growth. we advance we to drivers and generate Third, cash deploy And

longer-term the We are making will well, discovery innovation. which source investments research as of extensive in be believe we

commitment As our to the on and portfolio part spring. will focused our cardiovascular event we investor pipeline provide host efforts, an in these into more transparency of

I accelerating noted, a be cash business pipeline, will value-enhancing key development. addition as deploy to the our of strategy towards In flow part our internal our to

acquisitions good our informed. Pandion aggressive We will compelling our of but in of year’s approach appropriately Acceleron science-led, And innovation. will Last supplement an are continue pipeline external pursuing approach. is we to be and with that portfolio examples

we’ll on in of focus calculated need. taking areas value creating to are unmet continue risks We and

We development goal important capacity, to business scientific prowess the capabilities, of in an growth. achieving decade our have the operational for sustainable long-term before sufficient runway play the of financial and end role

a While to development, we we have need of know we more. do track strong business record

Finally, agreement and the environmental, net We governance integrate goals we’ve important business. bond. taken projects further to the of social partnerships United up the courses to low- access our a inaugural for through in of distribution support to for the in supplement UNICEF X December, the a to accelerate ESG contribute global of into supply steps Company’s Nations acted groundbreaking use the to with areas therapy issuance our to core for billion Sustainability middle-income million proceeds countries. Goals. and to molnupiravir completed sustainability priority In strategy, advancement including intend and to we $X recent also of We’ve and Development available access

investor We look addition, announced mission. values host insights February our our In performance ESG to forward that into initial event morning, space. Merck’s XXrd. metrics on this to commitment plans core And across with strong key ESG believe and providing we we this aligns well to

to to Clyburn. a call Now, moment over before I turn to Caroline, take recognize Frank I the want

Human excellence provided thank contributions, become CEO his Frank Frank Following to a operational the will all and Health on helping he’s his business. IFF. of to leaving global in vision and wish in for Merck and endeavor. family he XX establish Merck want We I as his for oncology of of be leader new embarks Frank best as strategic the strong our years significant leadership

I’ll have outlook. results place, While details deep Frank will the it Caroline pass be financial Caroline? in and continue team and leader talented positioned that, missed, into provide momentum and as with our to we business to well well new expect the performance are we of announce to our as to With over strong our shortly. we

Caroline Litchfield

of Rob. you, performance exceptional XX%. top and We was of bottom growth XX% XXXX business. line Good morning. Thank line our of for drove year robust a growth

excellence, Our the with challenges from executed teams agility performed with and pandemic. ongoing despite

We are science-led proud growth. worldwide. have for our results the also confidence to molnupiravir in the our of we patients in and strong reinforce strategy significant These to bring efforts very outlook

value pipeline as patients will business shareholders. well as portfolio in the development in to create to We near long invest growth maximize to for continue and over and and term and our

results. XX% of of remainder foreign to or my Molnupiravir excluding ex-exchange impacts contributed revenue or our be The Total quarter of of $XX.X million the revenues comments exchange. an were Now, XX% an on billion, in $XXX X growth. company points increase fourth will turning percentage basis.

Human contribution growing pillars Our momentum, XX%, business continued strong driven Health key its from our by molnupiravir. and

animal sales X%, increasing delivered Animal companion by business driven Health performance products. Our robust with also

position recent launches and all cancer. class the cell non-small and breast cervical ongoing despite of lung turning out carcinoma the Now, cancer, cancer to strong demand. and grew in XX% KEYTRUDA neo-adjuvant key demonstrate adjuvant its XX cancer, our U.S., durable is leadership and $X.X maintain global across continues be quarter KEYTRUDA continued renal of momentum performance brands. U.S., in KEYTRUDA neck reflecting In and fourth tumors KEYTRUDA the its continues the competition. and in to growth extend robust from to patients, benefiting oncology, eligible key IO new Outside to continues driven and In by capturing lung X billion, triple-negative to in RCC. launches the cell head

reach approvals two our earlier in RCC were this expand adjuvant lines. pleased very to quarter continue into melanoma. additional in receive to We We and

lung we X cancers. forward received also now results approved, expanding earlier-stage to adjuvant encouraging the has KEYTRUDA cancer following approvals, trial. the these KEYNOTE-XXX With indications line top in from into look If

KEYTRUDA’s clinical of early breast XX% we by uptake be and along most was Lynparza We among with strong indications, market-leading Growth confident continued familiarity data, disease. inhibitor. and as of stage prostate. a PARP are move recent the reputation that cancer benefit indication including remains into will physicians the driven our

PROpel endometrial significant XX%, prostate RCC population in driven a trial by sales grew cancer on in a based launch expected and Our the represents opportunity. the Lenvima broader U.S.

share of in very launch seen patient following in early new have RCC. the first-line encouraging We trends KEYNOTE-XXX

and to of also are for certain leaders, patients the providers to promising WELIREG a tumors. WELIREG launch recent start. off continues VHL-associated patients with interest generate by scientific strong and among excited is We

to RCC future. to its extend expect reach We in the broader indications

XXXX. purchases grew key timing well by across of supply. strong nearly the which Our Vaccines China increased billion BRIDION’s for prioritization that vaccinations growth Underlying a demand GARDASIL he being well CDC as increasingly the as quarter cohorts. for XX% the Also growth, as HPV the portfolio and robust vaccine certain sales remains GARDASIL, increased the care in U.S., agents acute driven usage due recognized is fourth was prevent U.S., full hospital cancers by as geographies decline replenishment growing was age underlying In our again of $X.X neuromuscular class. the within U.S. the immunization BRIDION the in it help delivered to and CDC in strong males. of the strong, as females Outside share to than demand and younger as by portfolio, global driven offset levels particularly and XX%, impacting HPV-related of XX% blockade year. COVID can This all of in growth driven stockpile both, grew more reversal

Companion through will Our poultry swine flat, in products X%. delivered by XX%, to strong last the points. to growth, of I on margin my a Animal of impacted fourth the month business parasiticide, animal non-GAAP now of Antelliq will remainder Livestock comparison Gross in walk vaccines. line a was another demand that as an by year’s which increasing recording as a sales changes percentage difficult patterns, be with P&L, in as global extra of X.X relating including increased sales Health for well of due BRAVECTO quarter experienced XX.X%, of distributor basis. demand sales sales comments you year-over-year purchasing decrease strong quarter was negatively of XXXX. our global Recall results. and and products, we offset the was the driven

approximately reflected we billion invest reminder, favorable drivers and to sales our our X% discards. equally was as impact with of margin. gross mix is growth partner, continued to expense This a our profits Ridgeback, was share pipeline. largely and Operating million. As we $X.X reduces lower and $XX molnupiravir cost which Other by from behind offset increased within expenses

tax fourth year year guidance foreign our mix is as for X.X% prior was the Our to the full estimated. income and a effective as due well than impacts than The previously the favorable rate reflects tax lower of expense XX.X%, of rate tax credit. quarter full lower of which more rate

of and EPS share. It molnupiravir earned noting results contributions price our per upper Taken the together, tax that in our end towards guidance. $X.XX is and operating favorable we the that underlying were expectations exceeded worth rate the our resulted from

we will momentum underlying non-GAAP business the continue, will strong Turning from benefit now guidance. molnupiravir also to We our revenues. in believe XXXX and our increased

using a between exchange XX% to $XX.X including of expect representing negative from be We of rates. and growth approximately XX%, to X% revenue $XX.X impact billion foreign billion, mid-January

margin gross XX%. is approximately be Our expected to

expenses operating assume driven expense related XX% We the of We full in R&D high the shares In we expect rate, rate of grow at XX%. income X.XX a and outstanding. expect to We single-digit year expenses a Acceleron tax approximately by billion and assume mid- other to expense, million. $XXX to acquisition. between part addition

expect Taken of to XX% reflecting range X% negative together, $X.XX EPS $X.XX, of XX%. impact of using growth from the This exchange we includes mid-January rates. foreign to approximately

there a on. focus to are models, areas your consider few you As

First, on molnupiravir.

We be to treatment authorizations an important will are the believe regulatory molnupiravir excited to our by and pandemic. ongoing date option combat

confident Based are supply on in to to half $X in of purchase ability number year. first now the a approximately of billion to the billion of place, $X XXXX, in weighted announced achieve and our in million agreements, providing we have agreements therapy. XX We revenues courses

growth recent low, KEYTRUDA, relaunch GARDASIL, we growth. as pandemic continue across Japan. of market. with ex growth, the potential market vaccination due opportunity U.S., drive regions, in HPV we to pneumococcal, portion expect and expect believe expansion the XXXX. doses as cohort albeit which and we increased Outside is of China from strong uptake continue and the we VAXNEUVANCE and levels demand will to launch Global in from globally. would remain in for in the U.S. robust we the well approval up from significant. missed to GARDASIL’s year-over-year launches Next, expect strong mid continued In of strong of excited by U.S. a pediatric, same which drive are supply for adults recent a to On growth at increased particularly continued benefit demand opportunity to continue pneumococcal larger pace increased the catch along In as represents the ramp in in not in adult the

newer some We continues sales to from market impact the however conjugate U.S. vaccines. pneumococcal expect towards PNEUMOVAXXX shift the offset as of to

also We of pressure the of modest JANUVIA exclusivity larger we expect markets. XXXX, on to ex-U.S. the in second in as lose experience LOE some half

again innovative broad drive in given Health, growth Animal well portfolio, and For are above-market our XXXX we beyond. to and positioned

as growth, derisked to of we look XX%. operating achieve driven largely and confident our by margins our strong Finally, revenue remain we in excess out XXXX, portfolio ability to in

Our capital allocation priorities remain unchanged.

continue near- and will our business drive to growth. First, to investments we and in long-term prioritize pipeline

remain a and to We goal pursue including also it business the To repurchases. business committed will To our and We pipeline that we remain and of We in position continue underscores in internal over have of we innovative augment our with shareholders We of the cash, global the of opportunities. With strategic our acquisitions and to And to to now our additional and into through the development. for execution to us return XXXX, the demand call now our strength time. to like intend medicines quarter the fourth Pandion, the will that, were it well in confidence vaccines. active I’d value-enhancing in the continued Acceleron on underlying the we financial excess and share through operational conclude, to over enable deliver increasing future. growth promise dividend, Dean. strength. extent in our turn

Dr. Dean Li

progress brief a for summary including of an we and I EUA call. in Good across for report WELIREG, pipeline provide molecular VAXNEUVANCE, you, the XXXX advancements XXXX, approvals new will Verquvo earnings everyone. molnupiravir. made Thank In broader with since Caroline. entities, meaningful our achievements and then morning, on last notable and

progress the United cardiovascular In our and cancer. more and triple-negative now in regulatory in and programs. KEYTRUDA cancers and and updates will in look than cervical, women’s more this cover States, received also for I and China. NDAs to regulatory HIV approvals we notable EU, and oncology, total, XXXX, we molnupiravir, Japan milestones XX breast pneumococcal, momentum. with approvals build endometrial on clinical for XX than made strides filed In U.S. We sBLAs

pandemic. the UK November, we have including approval in potential health As an a the treatment States to authorization by In havoc systems. of we United year in additional communities wreak seeing Emergency the in deaths day. approximately variant Since X,XXX care and authorizations States this the for combat Use on the the the we Omicron to our have enter special United Vaccines first Authorization third and help molnupiravir are pandemic, countries, a the X received continues for emergency in and now alone, options Japan.

In addition, provided of from showed or death hospitalization to at molnupiravir disease. other have end Medicine patients reduced in last of in trial countries severe clinical in of published MOVe-OUT England our voluntary most the significantly the New to Findings holders. Journal the danger progressing adult year authorizations license

the need Each those important risk SARS-CoVX characteristics Importantly, States week, has function, disease multiple can treatment such for target and is molnupiravir. those need that reinforces fewer data United supply local distinct for approximately comes for reinforce we surge it low resistance with ready molnupiravir and with the Recognizing consisted of diabetes, for appropriate for and have Omicron. We viral the These for of the against hypertension illnesses. committed studies underlying oral comorbidities. oral who to to high options a manufacturing Director that to prevention with antiviral, such that certain threat variants, successive indicating of severe high and highest believe has molnupiravir XX% option progression, consistent Last liver of we certain public results of vitro. option rapidly the barrier and evolutionarily Omicron prioritize are for of U.S. propensity molnupiravir’s for of disease, biology. and this seen as in and upon CDC potential physicians The within announced deaths corresponding with were indicated patients, an independent active use emerging COVID-XX heart molnupiravir drug-drug from treatment pandemic challenges. variant recommendations. waves conserved for receiving as authorization. at The with interactions meaningful To health aspects impaired the recently, date, emergency in interventions conditions, for adults treatments an taking make therapeutic patients importance important the with those provide variants treatment and with risk most kidney or to patients people it

As that ensure to of delivery treatment. noted, fulfill promise this we able Caroline important and were

working are of the stay We the partners this contribution Merck’s in pandemic. and and globe with ahead fighting further governments around to to curve

certain analysis, and approvals in Next, compared we KEYTRUDA will We provides dual on on older other significance a patients in when from stage to cell earlier-stage KEYTRUDA the its help recent immunotherapy targeting continue and dual overall was at placebo. renal recurrence. levels DFS improved or KEYTRUDA improvement risk the recurrence in survival, time we melanoma. for milestones outcomes whose with is of treatment option reduce the IB potential endpoint, did approval XX European position first endpoint, and our resection. Commission to patients PD-LX, resection. adjuvant setting statistical in primary as was secondary non-small complete the recurrence. carcinoma of received provide in high disease-free a IIIA PEARLS patients Several RCC, study, based interim approval positive KEYTRUDA comers key based cancers At following is to of approval express following tumors for options the IIC KEYNOTE-XXX. adjuvant approval Similarly, one in treatment KEYNOTE-XXX all Both of IIB surgical trial in The reducing setting. significant intermediate, for the the highlight with fortify new disease, high the to where risk trial as continue with demonstrating a and melanoma, well patients there treatment certain treated announced high only And and risk In or survival and of the cancer analysis, stages patients evaluating of FDA our for to statistically years strategy adjuvant of of as which oncology. FDA for cell by of analyze planned with primary finding not interim meet adjuvant an met lung endpoint. KEYNOTE-XXX shown stage for the important at recently the for

Phase HERX-negative, the treated during review to previously The OlympiA the trial. progress women’s the for early chemotherapy, FDA first priority continuing BRCA-mutated treatment make cancer, quarter high-risk in before surgery. from XXXX. based We anticipate either breast FDA We after data cancer or on patients of are X with of adjuvant Lynparza action granted for with

Commission no And the to information efficacy. for for broader trademark concerns Labor FDA Japan, pediatric for U.S. for FDA Moving our we applications chronic as following cough. a VAXNEUVANCE setting. gefapixant of European LYFNUA, continue need additional approved the unexplained XXXX, complete In cough. age steps announce drug individuals measurement chronic disease address we to gefapixant. letter to in our significant FDA Ministry in the the of have application requested review discuss for supplemental and portfolio. safety will new and the for in we to the we December, continues Health, Momentum in July adults issued announced of unmet program, refractory The with patients December. approval the and There Also the response look older or gefapixant next to the related granted the were in of the priority with years in XX with pneumococcal in are VAXNEUVANCE Welfare pleased

spring to robust XXF other virus. VAXNEUVANCE we provides this potential action XXF X, has committed and the HIV impacted Merck disease by offering of on We invasive additional like Importantly, those legacy of to a proud and in therefore, this research, in key serotypes serotype serotypes, anticipate the year. children. disease-causing response prevent incorporates regulatory remain up and

nucleoside the in future. we for the in islatravir, finding. FDA HIV. the prevention the we data translocation the transcriptase and treatment reverse mechanism the and trials for updates ongoing the clinical intend And of of of of evaluating the Following to principles share both hold believe working are inhibitor We and understand potential announcement the to

Looking pipeline. across broader our

lead noted, arterial fourth of novel according treating plan, the hypertension. to potential candidate, to the in pipeline has approach to and complement is is excellent Its acquisition a sotatercept, an Rob As provide Acceleron. to program quarter, We our completed proceeding X The In we integration the ability plan the on Phase our provide is cardiovascular track. we details to in the to further year an internal event XXXX and pipeline tremendous closing, both our and advance was spring. at our on where demonstrated investor a external pipelines. pulmonary

positioned well XXXX position a providing our are that also year. focus: forward momentum XXXX, the with in coming XXXX, areas. We the company to dual oncology therapeutic across sustaining I other into to updates further look continue our becoming leading and extending impact by beyond while

I Peter. call to Now, back turn the

Peter Dannenbaum

you. you ask start in analysts And Dean. to Grace, possible. question many would Thank to order Q&A? questioners like to to Thank as one please limit the you, themselves as get we’d to this morning,

Operator

of comes Instructions] Meacham first line question America. the [Operator from from Your Geoff of Bank

Geoff Meacham

Rob. Dean investments goal emerge, or a for business Thank into or important you is the assuming this to revenue to turn making guys doesn’t How this resistance longer I a potential that strategically one are guess, year in combination contributor? the maybe for maximize you. Is molnupiravir?

Rob Davis

for question. the Geoff. Yes, Thanks

fact pan-coronavirus the viruses, we’re given work in and for good you But variant, the giving and about molnupiravir Caroline, pandemic, beyond situation maybe mRNA from upon do well longer Dean variants. believe as as hit to developmental more and potential to what which point, Omicron molnupiravir, So, COVID-XX a we’re this we thinking turn term. the the from working the see we’ll preclinical but over that I’ll you’ve broadly showed I it at for believe, studies, we -- we can heard against upon with think guidance it future to activity for as And recently an year, effective. be continue does we such it with we have against perspective the we’re six expand obviously current look important

Dr. Dean Li

Yes.

are many point. frame we just it’s where So, United deaths if day I how States. a may, have this quite we I the let’s staggering in mean, at

mortality I really hospitalization having all effective is think States United rate I in Now, that. to and one when emphasized molnupiravir that as that reducing And medicines think emphasize can an reduce really important. I oral in think be death we be death. of do greater drugs XX%, going needs throughout, than would sort to XX% of drug And It’s to the is throughout. that XX%, know. the such about can And just access is and molnupiravir

now we’ve potentially I And when when seen are proof want With to often is, we those Now, in then for molnupiravir distribute And treatments distribute. death to higher. our I we are in our the the rate late with theoretically antibody is a do to possible. theoretical is, relationship sent is longer that send is interactions I October, that in to sudden, be about important. what will there’s could And Omicron other been really concerned liver Omicron, who highest and first October, what example, the EUA in people fast with we directly, EUA this other becomes useful want by the principle, that at insufficiency no of I variant as a think demonstrated effective. the would immediately. variants rate an the when or as of sent able be in death whole December those produce, hands point mechanism we were we or we insufficiency and how make that position. and that at And those EUA molecule when our shown emphasize have is the that real. And would the that designed a drug see can And drug-drug we all that that’s to just renal series we be EUA when also that we got think what it’s fact we has we threefold be one molnupiravir I emphasize profile looks people to in in risk. supply, held that patients that

So, think can sub get maybe there I Then with important. a When confident about the emphasize be we’re think a lethal I is would could to different could future, want just suppose resistance really we profile one the different through. really bookends be, okay, of that And you very issue having us variant. about that. bookends that

other is The sort becomes more endemic. a of possibility that of this bookend

necessarily the are to to vulnerable are not insufficiency. most it’s everyone’s is patients liver for like drug-drug situation, those worry So, have renal ones it. treated. flu, people need getting you often and But it in healthy most who people. the It’s that population that about lethal in that interactions, And vulnerable get

just So, mechanisms mechanism COVID-XX, think And action. with combination? in both think know, the virus And other about. we And have have internal in arsenal eventually, I issue I conversations I evading action. and that invested of different may pretty we mechanisms action. disease think you’ve how we good have that And does resources relationship mechanism-of-actions, that’s we with about of field is every viral of to important your at I do combination really in molnupiravir. this different it’s people about with that in think think to to question do In other think. have that talked about we’re of the about because an context multiple

to part have. need United we’re of options, So, States need will globally an the is and and we we that the think this I -- fundamental need important to thing to be arsenal a the going multiple view that molnupiravir have prepared need is that to

Caroline Litchfield

Caroline. if may I And this add, is

XX remains Dean’s $X enough depending to to guided how billion supply on things is ensuring on have there year. of That’s the of billion approximately point, forward. To million on basis company move this revenue $X courses. focused our We

we and more the XXXX are we still So, manufacture double million in in XX courses XXXX. committed did to than that

will in support million molnupiravir we the progresses. So, of have XX excess and courses the use pandemic of how to how

Operator

Your Shibutani Goldman next question the line from comes Sachs. Chris from of

Chris Shibutani

get potentially scheduled of just is And with there in little opportunity combination seeing and data part you. read the you then as terms far combinations you’re that think any might a than adjuvant. ‘XX of strategy what the On be earlier perhaps, so you the is time of that the KEYTRUDA, how we ‘XX, to that’s adjuvant more it the able with Thank important more an in both look opportunity frame. out Dean is efforts? progressing? the leadership looks a comment bit like on combinations, Can to

Dr. Dean Li

Right.

I want emphasize, that types to two there are So, combinations of just we have.

compounds is, an and with I event-driven that IO-IO it’s X be would combination, Phase LAGX, what is relationship chemotherapy, generation blocking you’re with. ADCs your And where which also of place. thought as with Lenvima, that. In KEYTRUDA, attention the with how readouts it a other of sort -- with same want I-O And that companies your But I the third think [ph] profile spool and CTLA-X that readouts. readouts combinations, terms second attention of reasonable see to the right, reason Lynparza. to plays Lenvima, where it that immuno-oncology endothelial KEYTRUDA in that’s of about also, your combinations of vascular also on to KEYTRUDA timing draw they about other in WELIREG, to Lenvima, in how focus we of such timing and to we think think RTKs, give have those place. raise and to looking And important why gives and are how to, other us us our TIGIT KEYTRUDA factor, sort agents. a repair they drugs We DNA to But as is, up, worked think to whether I readouts think different of with as other the also, sort I in recombination to to continue that and relationship will think with I you’re we’ll KEYTRUDA growth also sort at are in we’ve of and of relationship referring And that’s in but -- you’re of of such. see with Lynparza

then, And anti-angiogenesis we’re carcinoma so, WELIREG out shown been cell to outside plays ourselves in agent And will seeing of where sporadic where play we effective. it ask very interested should an has how else carcinoma. be cell in renal renal

Rob Davis

of of how new area answer are able strength Yes. about into question, about space? lines of the seeing we’re is Chris, in excited to real earlier We moving this KEYTRUDA And to expand maybe, continue we very indications therapy. seeing the the we how is first Obviously, are and growth. part a into think adjuvant just your Obviously, to we’re broaden.

we alone carcinoma triple-negative melanoma. in cancer a adjuvant, XX cancer, into moving you of If adjuvant approvals in renal just XXXX were adjuvant X had and for breast space, KEYTRUDA. stage cell the look, Three new indications expanded adjuvant or of in with those

ones we’re adjuvant the about the the spaces, indications growth the look and through combined looking adjuvant our it cancer, indications XXXX, So, with that important the if And other already lung drug with have. revenue earlier coming approximately what we soon we to by KEYNOTE-XXX be we And KEYTRUDA movement we XX% have driving for other the non-small in and have there. mel for at you adjuvant at of hope in total cell from XXXX. XX% growth think will into of remaining

board. is leadership where KEYTRUDA the think the put well going to this runs do is build in the what to as as term. an of starting to both very we long on space important breadth that as be area metastatic in could show So, maintenance the for we’re And the I we’re going

Peter Dannenbaum

U.S. And markets. to clear, the be Rob’s referencing

Operator

Your from comes Scala the Steve from next of question Cowen. line

Steve Scala

Sanofi is versus that monoclonal there obscure evidence I’d that antibody, antibody will a of like far RSV pipeline Sanofi the dominate. monoclonal discernible about to benefit ask and Sanofi unquestionably Merck no believes Sanofi is more so agent. of that the ahead

better why wondering I’m Sanofi, is than what your antibody if you. theirs? Thank with disagree So, Merck And you then thinks.

Dr. Dean Li

bit company’s a careful Yes. about I I’m another little be that answering to drug. want questions

can antibodies population treat critical. really think I having RSV important that in a patient monoclonal is that

that what is to and really to that opportunity coming a think We see is have patient drug that have data there to to be effective easier we’ll do like. population. that really have out, will we But provide looks that data

But of in profile are clinical the as will through. confident have we little comment the very directly. bit hesitant a looks to I’m what comes see we clinical So, just like to the and data our RSV data studies, antibody

Operator

from have we Next, Raffat Evercore ISI. Umer

Jon Miller

point. for to obviously, the long evaluating. is the there chance get Miller issues Hi, PK avoid potential But much question. Thanks and -- a or major at Umer. the taking or guys. duration any product is on is monitoring is here to CDX maybe there selling been This for that looking islatravir, of the so On Jon long you’ve around some

If path than is milligram to a for in franchise? daily monthly islatravir the you for dose or doses, HIV push potential that stick to the forward weekly rather trying sub

Dr. Dean Li

Yes.

So, let me take that.

So, considerable evaluating we a of are data. body

You of that trends islatravir lymphocytes that in highly in Phase point our the X demonstrated of trials mentioned efficacious had. observed we’ve with which that the that nature and is QD. just efficacy would islatravir been out different have I combination, doravirine

a We have evaluation future to still of but the are of this well. very committed near-term as will of view longer point acting options, we sort

to in So and question, relationship doravirine islatravir, to highly QD your we have get efficacious. data to it’s

speak. We of we to long body ways either evaluating time, as prep are are resident going that And to there make a able data relationship frequent we’re to of that sort to look or have less treatment. at be to a in data the continue

Operator

Mizuho. question line of from from Goldstein Mara the Next comes

Mara Goldstein

have if to of And of some are in as wondering, strategy, opine the valuations to weeks, could Company’s strategy relative of where did the couple your the made discuss since I’m overall of as comments competitors to maybe of well you valuations M&A. pipeline? continuing part I’m you by a number as supplement been in last think acquisitions you there around wondering

Rob Davis

for the Thanks Mara. question, Yes.

So, pointed valuations we seeing late. have pulled as quite back of biotech in out, a bit are you the space,

or in early space. or plays We the need out. marketplace. is investment see the I to other what that thing And it just too permanent to the that’s rebasing is change a if with the it’s into to happens the not flows important whether this think be is in see how market going a temporary

You different continue slow. invest interesting be start cash lower into down in it And to that sellers know restatement for and driving willing would but development we we valuation to the market, do slow very have have the and to augment And see are business foremost, doing look people in to on are Company. it. that with accelerating importance focus to also focused, first we to not of seeing levels, IPOs we this to we’re our to the Obviously, deals value, of opportunity opportunities regardless going being scientific area, us pipeline, start we’re will a investments deals the value space point at where situation. value-enhancing to and the I’m confident as out. we’ll of find our Whether to as to match that it to where or drives capabilities we the the the see. will allow market you good and allow see to change going if to doesn’t But see do us see own

Operator

of from Your the line Research. Tim next question comes Anderson Wolfe from

Unidentified Analyst

on say Phase in going program, Adam behalf into PCSKX On is Tim that XXXX. This you X your you’re oral of Anderson.

in Assuming out. late years terms to look Guessing trial not take two Thanks. the X until Phase of XXXX that to up, report takes this what length a like this might would that wrap and comparator?

Dr. Dean Li

that for you Thank question. Yes.

X readouts presented PCSKX to We relationship question that. in very is X oral will be the So drug. sort about The the Phase important. Phase our readouts of

heart reducing end that to cardiovascular a you of readouts registration is two of of just cardiovascular an in terms of established has sort considerations having tremendous LDL it an biomarker throughout. One view terms the that as points. patient as And sort powerful -- biomarker has could It’s death risk in prior path the epidemic take. oral that, we is a for everyone outcomes important be provided there on continues. As based recognizes, actually of important PCSKX, as to risk is, been advance that biomarker and a even will

also down in to in study again, this an we outcome drugs addition driving But patients. other eager X path to works has both. registrational And LDL well. that. in very So, to a LDL to really we’re of Phase will advance that point we give for But to be will that will for see been have to do the us But believe going important this have as confidence down. our the well levels agent that how the do trials we’re driving

Operator

Next Harrison [Ph] from up, we have Matt Arris.

Unidentified Analyst

next for the year year, especially this VAXNEUVANCE your expectation Thanks indication Charlie provide, is question. taking approval? after even terms in you. This Young the of Can Matthew. perhaps you for Thank pediatric launch and of

Rob Davis

Yes.

as starting So, this obviously, the presents, the we received. And which the ACIP that did MMWR know, and you VAXNEUVANCE, opportunity validate we’re the what with, we very do indication, probably point excited recommendation. adult you out out, about come as

are to So we’re now is point and beginning product. a established we ship at marketplace, the in reimbursement where

combination XX we you’re As a we in look at Between looking profile serotypes is an the the what at at this, has the real look if agent coverage. that we PNEUMOVAXXX, in VAXNEUVANCE we broadest two, have because with see of opportunity, VAXNEUVANCE.

ours VAXNEUVANCE X additional We’re obviously, which with we coverage, to X, at competitive, if we XXF, of we disease, unique X in in which the not well. serotypes, as to is And X serotype like in very are things contributor that superior serotypes competition showed And an is the look know adding and driver XXF marketplace. that and are PNEUMOVAXXX. as we as are important serotype

broad it, look very we coverage. at got as you’ve So,

the And important is showing immunocompromised and label how works in patients, will in be the we which have important at-risk in data the in drug high coverage got -- You’ve label. serotypes. disease-causing

So, we’re well positioned.

we’re we setting. with get fight starting think momentum in then to But April, that to build carry in marketplace. -- pediatric see see adults are to on we’re the hopefully, now, we’re pediatric going we the see to to the to do hopefully going space. into obviously, we to the We’re forward to well the that. the look going out PDUFA launch into from in have drug the that opportunity we’re commercial but level, And already forward it to to the what obviously Right positioned going at

far, so to well, we’re off contracting all and So, underway, good Thanks. start. started good a

Operator

Baum We from have Andrew Citi.

Andrew Baum

as would formulations? period position a for longer disprove the line combination cause for the sight on for the have compression, A lymphocyte on a toxicity you approval no to of once-a-day dosing you mitochondrial Are question clear islatravir. in you file if or

Dr. Dean Li

One is And whether the provided. of not going up I question first broke by your around is was list question evaluating that of we’re don’t have mechanism. in is, dose as all was as right the we’re believe there’s to by we to looking anything the at I we action. data disclosed the lymphocyte looking would place not ways still or I the You as points. which it little want In are then, down, mechanism, brief the sort go question that mitochondrial the data get there right mechanism just a mechanism relationship bit. say But would of the just a the trend two The second that now. relationship relationship we that we’re with to toxicity. now, evaluating. That does in rule to we out at speak.

Operator

we Next, have Louise from Cantor. Chen

Louise Chen

And Thank for working if they how are the them? through logistical antivirals, are, they? I accurate headlines about want how you the to obstacles you. ask So, are you oral if

Rob Davis

appreciate I the Yes. question, Louise.

But the and with distribution it that. that the into it’s And delivered where by point, working the should the therapy probably it’s you if be of hubs States them. to on the to how Since are to in pharmacies end delivered million think they little the of hubs from full therapy to situation, situation doses up out we at the government before of continue year, markets. we focused local XXX,XXX add a distribute to were that of end courses United to in they mainly this then, So, the we where over the United week, courses the States, you’re X.X the to we have. us at did and a look the deliver of and courses Obviously, government. the I

trying to help to get the go partner have can I real where look quickly think, increase focused government government understand beyond much very doing. the as the discussions Obviously, And make out locator has what very can to to web. it. know people I they antivirals. we’re on how the in sites affordably as as the go we as we help get be way because to the well, people continue to go And government you that drug out is sure thing can find And as feel with to they to there’s we’re U.S. with do focusing is can to messaging how we’re there, find the we ensure the on we’re we marketplace, where access just any to and in and will need about able find to the possible. as they good

UNICEF a we that with deal X saw million announced probably You had for courses. we

access the middle up really countries us the could we and licenses with trying for manufacturers, to have generic they accelerate wait that so low income to production. sure we we make as Now, the ramp as help

gap to that able will as on fill hopefully, for be So markets help the we wait come generics line. ultimately in those the in to

Operator

SVB Leerink. from Next, we have Graybosch Daina

Daina Graybosch

going to in and to oncology IO back combination. go I’m KEYTRUDA

I if In where guys give So, combinations. could anywhere this future. could your you trials And how I we’re be you from in particular, I for wonder year, may TIGIT as think can readouts of strategy highlight of think, you your position see going somebody Roche. earlier, differentiating IO-IO multiple LAGX to have to randomized of multiple development talk coming advantage? the KEYTRUDA mentioned and an TIGIT you these base

Dr. Dean Li

me relationship Let to question that. scientific in the take

are We immuno-oncology the I going inhibitor tumor cut. another by different ways addition access question. or checkpoint inhibitor. PD-X, that would believe sort a checkpoint emphasize that principle that have, a for is to just to believe be of that is PD-X different given that thanks general there to the a So, which adding different we of we potentially improve

inhibitor could So, PX as checkpoint one sure there that has broad you additional PD-X itself. that would have is as add of that we’re not so to impact a

TIGIT, So, our invest in to invest in LAGX, in strategy in invest to has ILTX. to CTLA-X, been invest to

a I our more of some combinations to larger of is think other colleagues those bet of on each strategy broadly. the place

something think is really So I that’s that I important. think

should in want that to at of PD-X emphasize the that is one is PD-X. want components. base response of what compared show the is you’re to point second than that to that our emphasize also better to also would And is others The PD-X show you the what contribution to look And added really relationships. I you want reason I the on

So, it PD-LX. is, belief the my that example, a PD-X targeting general, more is than, axis for in effective

with physicians a relationship gives very where well. comfortable And are as we distinguishing into of with where that for we’re in us the So, also, chemo our stages our others. PD-LX PD-X is, earlier in especially relationship driving as differentiation and And of lung sort then plus relationship. monotherapy of cancer, lung, issue PD-X, stand well in in PD-X third example, as in position

I think gives leg that well. us as of sort a up

about enormous also, is strategically versus PD-LX; way things: in second the the versus we sort how a in physicians three and position, a and PD-X the later whole to ability I IO-IO is, combinations; PD-X of gives that sort from sort non-PD-X thing of think relationship to base So, our of paint stage so adjuvant drug. something One all comfort then, our is, think

Peter Dannenbaum

good realize be your for you peer so today. questions Thank a all that. of Great. We Thank is Daina. now, you, right we you, And call there Dean. mindful to thank want starting

interest. have at the out Thank team your reach good you appreciate follow-ups, you. and If please but the we IR any to questions today time, any

Rob Davis

you. Thank

Operator

all gentlemen, you Thank conference today’s you, call. Thank concludes joining. this everyone. Ladies and for

You may now all disconnect.

Merck & Co. (MRK) 3 Feb 222021 Q4 Earnings call transcript