Welcome & Introductions Welcome & Introductions Ken Frazier, Chairman and Chief Executive Officer Finan Financial cial & Value & Value Creation Creation Overvi Overview ew Rob Davis, Chief Financial Officer and Head of Global Services Commercial Growt Commercial Growth h Drivers: Drivers: KEYTRUDA KEYTRUDA & Beyond & Beyond Frank Clyburn, Chief Commercial Officer Animal Health Animal Health Inno Innovation vation Rick DeLuca, President, Merck Animal Health Merck Merck R&D R&D Str Strategy Overview ategy Overview Dr. Roger M. Perlmutter, President, Merck Research Laboratories Pipeline Opportunities Pipeline Opportunities Dr. Roy Baynes, Head of Clinical Development and Chief Medical Officer, and Mike Nally, Chief Marketing Officer Future Future of of Merck Merck R&D: R&D: Panel Discuss Panel Discussion ion Merck Research Laboratories Leadership: Dr. Dean Li, Dr. Fiona Marshall and Dr. Daria Hazuda Q&A Q&A / / Closing Closing Remarks Remarks All Lunch Lun ch Break Break All Breakout Breako ut Sessions Sessions Pipeline Deep Dive Next Generation Discovery International Opportunity & China 16
COMMERCIAL COMMERCIAL PRIORITIES PRIORITIES TO DRIVE FURTHER TO DRIVE FURTHER GLOBAL GLOBAL G GROWTH ROWTH Frank Clyburn Capitaliz Ca pitalize on e on Build on leading Build on leading Successfull Successfully y global g lobal growth wth position across k position acr oss key ey execute new ecute new opportunities oppor tunities growth pillar wth pillars launc launches hes 17
CURRENT PI CURRENT PILLARS HAVE EXPANSION LLARS HAVE EXPANSION OPPORTUNIT OPPORTUNITIES IES AHEAD AHEAD HOSPITAL HOSPIT AL ONCOLOGY ONCOL OGY VACCINES CCINES Frank Clyburn PORTFOLIO POR TFOLIO Visi Visibility bility into growt into growth dr h drivers ivers over the over the next next 5 years 5 years 18
ONCO ONCOLOGY: DRIVI LOGY: DRIVING GLOBAL LEADERSHI NG GLOBAL LEADERSHIP 27 27 Indications 15 15 Tumor types Foundational cancer Foundational cancer Market-leading Broad Broad-based based + MSI-H Frank Clyburn treatment treatme nt PARPi TKI TKI >200K Patients treated Strong fo Strong foun undatio ation w n with ith long long runway runway for gr for grow owth th ahe ahead 19
KEYTRUDA: KEYTRUDA: SIGN SIGNIFIC IFICANT ANT GLOBAL G GLOBAL GROWTH ROWTH OPPORTUNIT OPPORTUNITIES IES KEYTRUD KEYTR UDA is one of A is one of the best the best-selling selling • Building on leadership in lung with dr drugs 6 y ugs 6 year ears after launc s after launch additional reimbursement rolling out across Europe and other markets $10,000 $9,000 • Encouraged by early adoption in RCC and $8,000 adjuvant melanoma launches $7,000 • Excited to extend H&N leadership with Frank Clyburn $6,000 recent 1L approval $5,000 • Indications expected to more than double $4,000 over next 5 years $3,000 o Earlier lines of therapy, including $2,000 adjuvant / neoadjuvant o $1,000 New combinations o New tumor types $0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Source: EvaluatePharma; KEYTRUDA Year 6 sales represent 1Q 2019 sales annualized. Sales in $ billions and not inflation adjusted 20
LYNPARZA: LYNPARZA: SET SET FOR FOR SUSTAINED SUSTAINED CLASS CLASS LEADE LEADERSHIP RSHIP Gr Growth oppor wth opportunities tunities • Lynparza has class leadership in the U.S., across acr oss mult multiple t iple tumo umor types r types with ~60% of total PARPi prescriptions • The only PARPi with 1L maintenance indication in ovarian cancer based on strong and an d mor more e .. ... results from SOLO-1 • POLO data represents new opportunity in Frank Clyburn Prosta Prostate te cancer cancer g BRCA m pancreatic cancer patients • Additional indications with monotherapy and Panc Pancre reat atic ic cancer cancer combinations with KEYTRUDA to drive significant growth going forward Breast Brea st cancer cancer Ovarian Ova rian cancer cancer In collaboration with AstraZeneca 21
LENVIMA: ESTA LENVIMA: ESTABLISHING BLISHING AS TKI AS TKI OF CHO OF CHOICE ICE Growth oppor Gr wth opportunities tunities across multiple tumor types acr oss multiple tumor types • Approved in markets worldwide in RCC, HCC and differentiated thyroid cancer • Significant opportunity in China given and more … prevalence of HCC in the market • Strong commercial collaboration sets Lung Lung cancer cancer Frank Clyburn foundation for execution in many future indications Endo Endomet metrial rial • carc ca rcinoma inoma 13 studies in combination with KEYTRUDA, including NSCLC, endometrial carcinoma Hepatocellular Hepatocellular and RCC carcinoma carcinoma Renal Ren al ce cell ll carc ca rcinoma inoma Thyro Thyroid id cancer cancer In collaboration with Eisai 22
ONCO ONCOLOGY: POTENT LOGY: POTENTIAL IAL FOR >50 ADDITIONAL FOR >50 ADDITIONAL INDICATIONS INDICATIONS OVER NEXT OVER NEXT 5 YEA 5 YEARS RS Propo Proportion rtion of of expect expected ed indications by product indications by product Frank Clyburn Potential Poten tial to near to nearly triple ly triple onco oncology logy indicatio indications ns by 20 by 2023 23 23
VACCINES: GRO VACCINES: GROWING WING GLOBAL BUSINESS GLOBAL BUSINESS WITH WITH NEAR NEAR- AND LONG AND LONG-TERM TERM OPPORTUNITI OPPORTUNITIES ES Near Nearly doubled vaccines y doubled vaccines revenue since 2010 enue since 2010 • Significant long-term opportunity for pediatric and adult vaccines growth $ 7.3B around the world Other ZOSTAVAX • High barriers-to-entry supporting ROTATEQ $ 5.7B sustained, durable position Other PNEUMOVAX 23 ZOSTAVAX • Investing in vaccines manufacturing Frank Clyburn ROTATEQ PROQUAD-MMR- $ 3.8B capacity to increase doses produced VARIVAX Other ZOSTAVAX PNEUMOVAX 23 globally ROTATEQ PNEUMOVAX 23 PROQUAD-MMR- • Strong pipeline in pneumococcal disease, VARIVAX PROQUAD-MMR- respiratory syncytial virus (RSV), VARIVAX GARDASIL cytomegalovirus (CMV), dengue and others GARDASIL GARDASIL 2010 2014 2018 Merck started recording vaccines sales in the 19 European countries previously part of the SPMSD vaccines joint venture starting in January 1, 2017 24
GARDASIL: PO GARDASIL: POSITIONED SITIONED FOR FOR RENEWED GROWTH RENEWED GROWTH Global incidence of Global incidence of HPV HPV-rela elated ted cancers & diseases cancer s & diseases • Growth driven by global appeals to eliminate cervical cancer Common Female Male Oropharynx cancer • Reacceleration of growth driven by expansion into new geographies, public Recurrent Respiratory and gender-neutral immunization programs Papillomatosis and age cohorts Frank Clyburn • Anal cancer Cervical cancer 11,000 13,000 Fastest pharmaceutical launch in China 528,000 Penile cancer 18,200 Vulvar & vaginal • 17,300,000 Genital warts Significant opportunity ahead given only 14,400,000 cancer ~3% of the world’s eligible population has Millions Cervical dysplasia of cases received an HPV vaccine Current indications of GARDASIL 9 Not indicated 25
HOSPITAL PORTFOLIO: OPTIMIZED HOSPITAL PORTFOLIO: OPTIMIZED BY BY GLOBAL GLOBAL STRENGTH STRENGTH AND SCALE AND SCALE BRIDION poised for c continued d growth Sizable HAB/VAB pneumonia worldwide de as as nu numb mber er of of surge geries es that indication on repres esen ents s ne new use a reversal agent increases opportunity for ZERBAXA g growth Frank Clyburn Leading portfolio of a antibiotics and Recent launche hes build on our H HIV legacy antifunga gals, i including g novel products and further position n us to b bring next gene neration on trea eatme ment nts to m market et 26
INN INNOVATIVE OVATIVE PORTFOLIO PORTFOLIO AND AND WAVE OF WAVE OF INDICATIONS DRIVING GL INDICATIONS DRIVING GLOBAL GROWTH OBAL GROWTH -4% 4% Growth Contributors: KEYTRUDA +4% Growth Contributors: GARDASIL +12% Growth Contributors: Canada Canada Pediatric Vaccines GARDASIL +9% +67% BRIDION KEYTRUDA KEYTRUDA Lynparza Europe¹ Lenvima JANUVIA United Lenvima Lynparza Hospital Acute Care BELSOMRA States China Japan +14% Growth Contributors: KEYTRUDA GARDASIL Growth Contributors: Pediatric Vaccines +3% BRIDION Eastern Europe / GARDASIL Frank Clyburn Pediatric Vaccines Growth Contributors: Middle East BRIDION +25% KEYTRUDA Africa Asia Pediatric Vaccines GARDASIL Pacific Hospital Acute Care Latin Ex Ex-China America Human health sales o outs tside of t the U.S. grew 12% in 1Q 2 2019 9 All growth rates exclude the impact of exchange and represent 1Q 2019 vs. 1Q 2018. Growth contributors represent select growth drivers across pillars of growth. 1 Europe primarily represents all European Union countries and the European Union accession markets 27
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