Merck & Co., Inc. Investor Presentation June 2015
Forward-Looking Statement of Merck & Co., Inc., Kenilworth, NJ, USA This presentation of Merck & Co., Inc., Kenilworth, NJ, USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include, but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and healthcare legislation in the United States and internationally; global trends toward healthcare cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the Company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the Company’s s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company’s 2014 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov). 2
Merck is Positioned for Long-Term Growth through Innovation Premier Research-Driven Biopharmaceutical Company New Focused Model Suite of Opportunities Four Key Growth Advancing Innovative Platforms Pipeline Programs in Areas with Accelerating BD Strategy Large Unmet Needs Improving Operating Multiple New Product Model Launches 3
New Focused Model is Driving Growth and Productivity • Investing Behind the Best Sources of Growth • Rigorous Portfolio Prioritization: Retaining Animal Health Corporate • Divesting Non-Core Assets, including Consumer Care and Ophthalmics • Acquiring Complementary Assets, including Idenix and Cubist • 4 Priority Commercial Areas Commercial • Top 10 Priority Markets • Integrated Oncology Business Unit • Investing Behind Products and Programs with the Greatest Returns Operating • Focus on Candidates with Unambiguous Promotable Advantages Expense • Resourcing Launch Opportunities • Prioritization of Investment Leading to Overall Reduction in OpEx On track for $2.5B of cost savings by end of 2015 vs. 2012 base 4
Focused Areas Provide a Platform for Growth DIABETES VACCINES Total deaths from diabetes are Prevention of disease through projected to increase by 50% in the vaccination is cost effective next 10 years HOSPITAL ACUTE CARE ONCOLOGY Antibiotic-resistant bacteria infects Every year, 8 million people die from over 2 million Americans annually, cancer worldwide resulting in 23,000 deaths Sources: CDC, WHO 5
Growth from Core Commercial Areas and Launches Innovation Biosimilars KEYTRUDA (Melanoma) Diabetes MK-5172A (HCV) Immunology KEYTRUDA (NSCLC) Odanacatib (Osteoporosis) Oncology Hospital Acute Care BELSOMRA Omarigliptin (Diabetes) Insulin Oncology GARDASIL9 Anacetrapib (Atherosclerosis) Vaccines Doravirine (HIV) ZERBAXA MK-8931 (Alzheimer’s Disease) WAVE 2 WAVE 1 Potential Future Launches Current and Near-term Launches Sales Core Focus Areas 6
Launching New Products in Large Markets • $83mm in 1Q 2015 sales • Now launching in U.S. and • Launch ongoing in U.S. Japan • Vast majority of ipilimumab- • Beginning to see formulary refractory melanoma • ~5,500 weekly prescriptions additions patients being treated with (mid-June) 1 • Growing issues with Gram- KEYTRUDA • Achieved positive coverage negative pathogens, • Strong access in labeled decisions for ~50mm including certain resistant indication commercial lives, half with species, driving positive no step edit discussions and positive • Broad acceptance of formulary uptake KEYTRUDA in NCCN melanoma treatment guidelines 1. Source: IMS. 7
Merck is Advancing its Innovative Pipeline Actoxumab / Bezlotoxumab (C. Diff. Infection) Dates per clinicaltrials.gov as of 5/19/2015 Grazoprevir / Elbasvir (Hepatitis C) Surotomycin (C. Diff. Infection) KEYTRUDA – NSCLC (KN-010) Doravirine (HIV) KEYTRUDA – Bladder Cancer (KN-045) Letermovir (HCMV prophylaxis) Anacetrapib (Atherosclerosis) KEYTRUDA – Head & Neck Cancer (KN-040) Omarigliptin* (once weekly DPP-4) BACE Inhibitor (Alzheimer’s Disease) Ertugliflozin* (SGLT-2 Inhibitor) 2014 2015 2016 2017 2018 2019+ Earliest study primary completion date per clinicaltrials.gov * Light green arrow reflects CV outcomes Latest study primary completion date per clinicaltrials.gov studies for Omarigliptin and Ertugliflozin. 8
KEYTRUDA: Building a Foundation with Monotherapy Mesothelioma SCLC Head and Neck Esophageal Bladder Ovarian Gastric Melanoma Renal TNBC NSCLC Colorectal Hodgkin’s Lymphoma Wave 1 Wave 2 Wave 3 Over 30 Different Tumor Types Under Investigation 9
Strategy Has Accelerated Melanoma and NSCLC Programs NSCLC File Accepted by FDA Priority Review Granted 100 90 PS 1-49% PS <1% PS ≥50% 80 ORR (95% CI), % 70 60 50 40 30 20 10 45.2 16.5 10.7 43.9 15.6 50.0 19.2 16.7 9.1 0 Total Previously Treated Treatment Naive Overall Response Rate in Advanced NSCLC by PD-L1 Proportion Score (KEYNOTE-001) Adapted from presentation by Edward Garon, AACR 2015 10
Lung Cancer: Largest Global Incidence and Worst Mortality Number of Cancer Cases Per Year Lung Breast Colorectum Prostate Stomach Liver Head & Neck Cervix Esophagus Bladder Non-Hodgkin's lymphoma Incidence Leukemia Mortality Pancreas Kidney Incidence of Lung Endometrium Cancer ~8x Melanoma Thyroid Brain & CNS Ovary Melanoma Gallbladder Multiple myeloma Hodgkin's lymphoma 0 500,000 1,000,000 1,500,000 2,000,000 Source: GLOBOCAN 2012: Estimated cancer incidence, mortality and prevalence worldwide, in 2012. 11
Improving Efficacy with Selective Combination Therapy Combination Strategy More than 40 Combinations Under Investigation Standard Targeted Immuno- Novel Therapies Therapies modulators Vaccines 12
Broad Pipeline is Advancing Rapidly EARLY CLINICAL DEVELOPMENT REGISTRATION Melanoma Head and Neck • 1L (KN006) • 1L + chemo/cetuximab (KN048) • 2L (KN002) • 2L (KN040) • Adjuvant (KN054) • 3L (KN055) • T-Vec combination (Amgen)* Over 30 Different Tumors Triple Negative Breast Over 40 Different Combinations NSCLC • 2L (KN086) • 1L (KN024) • 1L (KN042) RRcHL • 2/3 L (KN010) • 3L (KN087) Gastric Bladder MK-8628 (BET inhibitor): Solid tumors, • 2L (KN061) • 1L (KN052) hematologic malignancies • 3L (KN059) • 2L (KN045) Colorectal MK-4166 (Anti-GITR): Solid tumors • 3L MSI-high (KN164)* MK-1966 (anti-IL-10) + SD-101 (Dynavax): Solid and hematological KEYTRUDA NME’s *Planned tumors* 13
Merck Oncology: Broad Universe of Partnerships 14
Potential Launches in Multiple Tumor Types ADVANCED PLEURAL OTHERS TRIPLE NEGATIVE BREAST MESOTHELIOMA CANCER CLASSICAL HODGKINS LYMPHOMA GASTRIC BLADDER HEAD & NECK NON-SMALL- CELL LUNG MELANOMA • Initial market entry in metastatic melanoma • Potential second indication in non-small-cell lung cancer • Possible application in up to 30 different types of tumors 15
Grazoprevir/Elbasvir regimen for the treatment of HCV infection All-oral, once-daily, fixed-dose tablet HCV NS5A inhibitor HCV NS3/4A inhibitor (50 mg, once-daily, oral) (100 mg once-daily, oral) Grazoprevir Elbasvir (MK-5172) (MK-8742) High rates of efficacy * demonstrated against key genotypes High barrier to resistance and activity against common resistance- associated variants of HCV Single tablet given once-daily, no significant food effect Breakthrough designation from FDA for selected populations File submitted to FDA (May 28, 2015) *Defined as Sustained Virologic Response 12 weeks post-treatment, or SVR12. 16
Looking to the future: The Merck triplet regimens HCV NS5B Nucleoside inhibitor HCV NS3/4A inhibitor HCV NS5A inhibitor Elbasvir (MK-8742) Grazoprevir or MK-3682 (MK-5172) MK-8402 C-CREST: Phase 2 program evaluates two different 3-drug regimens Designed to target broad range of genotypes Starts with 8 week regimens, and based on the results, will proceed to investigate shorter durations 17
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