Welcome & Introductions Welcome & Introductions Ken - - PowerPoint PPT Presentation

Welcome Welcome & Introductions & Introductions Finan Financial cial & Value & Value Creation Creation Overvi Overview ew Commercial Commercial Growt Growth h Drivers: Drivers: KEYTRUDA KEYTRUDA & Beyond & Beyond Animal Animal Health Health Inno Innovation vation Merck Merck R&D R&D Str Strategy Overview ategy Overview Pipeline Opportunities Pipeline Opportunities Future Future of

• f Merck

Merck R&D: R&D: Panel Discuss Panel Discussion ion Q&A Q&A / / Closing Closing Remarks Remarks Lun Lunch ch Break Break Breako Breakout ut Sessions Sessions

Ken Frazier, Chairman and Chief Executive Officer Rob Davis, Chief Financial Officer and Head of Global Services

Frank Clyburn, Chief Commercial Officer

Rick DeLuca, President, Merck Animal Health

• Dr. Roger M. Perlmutter, President, Merck Research Laboratories
• Dr. Roy Baynes, Head of Clinical Development and Chief Medical Officer, and Mike Nally, Chief Marketing Officer

Merck Research Laboratories Leadership: Dr. Dean Li, Dr. Fiona Marshall and Dr. Daria Hazuda Pipeline Deep Dive Next Generation Discovery International Opportunity & China All All

16

COMMERCIAL COMMERCIAL PRIORITIES PRIORITIES TO DRIVE FURTHER TO DRIVE FURTHER GLOBAL GLOBAL G GROWTH ROWTH

17

Build on leading Build on leading position acr position across k

• ss key

ey growth pillar wth pillars Ca Capitaliz pitalize on e on global g lobal growth wth

• ppor
• pportunities

tunities Successfull Successfully y execute new ecute new launc launches hes

Frank Clyburn

CURRENT PI CURRENT PILLARS HAVE EXPANSION LLARS HAVE EXPANSION OPPORTUNIT OPPORTUNITIES IES AHEAD AHEAD

18

Frank Clyburn

ONCOL ONCOLOGY OGY VACCINES CCINES HOSPIT HOSPITAL AL POR PORTFOLIO TFOLIO

Visi Visibility bility into growt into growth dr h drivers ivers over the

• ver the next

next 5 years 5 years

ONCO ONCOLOGY: DRIVI LOGY: DRIVING GLOBAL LEADERSHI NG GLOBAL LEADERSHIP

19

Frank Clyburn

Broad Broad-based based TKI TKI Foundational cancer Foundational cancer treatme treatment nt Market-leading PARPi

27 27

Indications

15 15

Tumor types + MSI-H

>200K

Patients treated

Strong Strong fo foun undatio ation w n with ith long long runway runway for gr for grow

• wth

th ahe ahead

KEYTRUDA: KEYTRUDA: SIGN SIGNIFIC IFICANT ANT GLOBAL G GLOBAL GROWTH ROWTH OPPORTUNIT OPPORTUNITIES IES

20

Frank Clyburn

• Building on leadership in lung with

additional reimbursement rolling out across Europe and other markets

• Encouraged by early adoption in RCC and

adjuvant melanoma launches

• Excited to extend H&N leadership with

recent 1L approval

• Indications expected to more than double
• ver next 5 years
• Earlier lines of therapy, including

adjuvant / neoadjuvant

• New combinations
• New tumor types

KEYTR KEYTRUD UDA is one of A is one of the best the best-selling selling dr drugs 6 y ugs 6 year ears after launc s after launch

Source: EvaluatePharma; KEYTRUDA Year 6 sales represent 1Q 2019 sales annualized. Sales in $ billions and not inflation adjusted

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

LYNPARZA: LYNPARZA: SET SET FOR FOR SUSTAINED SUSTAINED CLASS CLASS LEADE LEADERSHIP RSHIP

21

Frank Clyburn

• Lynparza has class leadership in the U.S.,

with ~60% of total PARPi prescriptions

• The only PARPi with 1L maintenance

indication in ovarian cancer based on strong results from SOLO-1

• POLO data represents new opportunity in

gBRCAm pancreatic cancer patients

• Additional indications with monotherapy and

combinations with KEYTRUDA to drive significant growth going forward Gr Growth oppor wth opportunities tunities acr across

• ss mult

multiple t iple tumo umor types r types

Ova Ovarian rian cancer cancer Prosta Prostate te cancer cancer Brea Breast st cancer cancer Panc Pancre reat atic ic cancer cancer an and d mor more e .. ...

In collaboration with AstraZeneca

LENVIMA: ESTA LENVIMA: ESTABLISHING BLISHING AS TKI AS TKI OF CHO OF CHOICE ICE

22

Frank Clyburn

• Approved in markets worldwide in RCC,

HCC and differentiated thyroid cancer

• Significant opportunity in China given

prevalence of HCC in the market

• Strong commercial collaboration sets

foundation for execution in many future indications

• 13 studies in combination with KEYTRUDA,

including NSCLC, endometrial carcinoma and RCC

Ren Renal al ce cell ll ca carc rcinoma inoma Lung Lung cancer cancer

Hepatocellular Hepatocellular carcinoma carcinoma

and more …

In collaboration with Eisai

Endo Endomet metrial rial ca carc rcinoma inoma Thyro Thyroid id cancer cancer

Gr Growth oppor wth opportunities tunities acr across multiple tumor types

• ss multiple tumor types

ONCO ONCOLOGY: POTENT LOGY: POTENTIAL IAL FOR >50 ADDITIONAL FOR >50 ADDITIONAL INDICATIONS INDICATIONS OVER NEXT OVER NEXT 5 YEA 5 YEARS RS

23

Frank Clyburn

Poten Potential tial to near to nearly triple ly triple onco

• ncology

logy indicatio indications ns by 20 by 2023 23

Propo Proportion rtion of

• f expect

expected ed indications indications by product by product

VACCINES: GRO VACCINES: GROWING WING GLOBAL BUSINESS GLOBAL BUSINESS WITH WITH NEAR NEAR- AND LONG AND LONG-TERM TERM OPPORTUNITI OPPORTUNITIES ES

24

Frank Clyburn

• Significant long-term opportunity for

pediatric and adult vaccines growth around the world

• High barriers-to-entry supporting

sustained, durable position

• Investing in vaccines manufacturing

capacity to increase doses produced globally

• Strong pipeline in pneumococcal disease,

respiratory syncytial virus (RSV), cytomegalovirus (CMV), dengue and others Near Nearly doubled vaccines y doubled vaccines revenue since 2010 enue since 2010

GARDASIL GARDASIL GARDASIL PROQUAD-MMR- VARIVAX PROQUAD-MMR- VARIVAX PROQUAD-MMR- VARIVAX PNEUMOVAX 23 PNEUMOVAX 23 PNEUMOVAX 23 ROTATEQ ROTATEQ ROTATEQ ZOSTAVAX ZOSTAVAX ZOSTAVAX

Other Other Other

2010 2014 2018 $5.7B $7.3B $3.8B

Merck started recording vaccines sales in the 19 European countries previously part of the SPMSD vaccines joint venture starting in January 1, 2017

GARDASIL: PO GARDASIL: POSITIONED SITIONED FOR FOR RENEWED GROWTH RENEWED GROWTH

25

Frank Clyburn

• Growth driven by global appeals to

eliminate cervical cancer

• Reacceleration of growth driven by

expansion into new geographies, public and gender-neutral immunization programs and age cohorts

• Fastest pharmaceutical launch in China
• Significant opportunity ahead given only

~3% of the world’s eligible population has received an HPV vaccine

Current indications of GARDASIL 9 Not indicated

Global incidence of Global incidence of HPV HPV-rela elated ted cancer cancers & diseases s & diseases

17,300,000 11,000 14,400,000 13,000 Millions

• f cases

18,200 528,000

Penile cancer Oropharynx cancer Recurrent Respiratory Papillomatosis Anal cancer Genital warts Cervical cancer Vulvar & vaginal cancer Cervical dysplasia

Male Female Common

HOSPITAL HOSPITAL PORTFOLIO: OPTIMIZED PORTFOLIO: OPTIMIZED BY BY GLOBAL GLOBAL STRENGTH STRENGTH AND SCALE AND SCALE

26

Frank Clyburn

BRIDION poised for c continued d growth worldwide de as as nu numb mber er of

• f surge

geries es that use a reversal agent increases Leading portfolio of a antibiotics and antifunga gals, i including g novel products Recent launche hes build on our H HIV legacy and further position n us to b bring next gene neration

• n trea

eatme ment nts to m market et Sizable HAB/VAB pneumonia indication

• n repres

esen ents s ne new

• pportunity for ZERBAXA g

growth

United States Canada Canada Europe¹ Latin America Eastern Europe / Middle East Africa Asia Pacific Ex Ex-China Japan +14% China +4% +3% +9% +25% +12%

• 4%

4%

INN INNOVATIVE OVATIVE PORTFOLIO PORTFOLIO AND AND WAVE OF WAVE OF INDICATIONS INDICATIONS DRIVING GL DRIVING GLOBAL GROWTH OBAL GROWTH

27

Frank Clyburn

Human health sales o

• uts

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

+67%

Growth Contributors: GARDASIL KEYTRUDA JANUVIA Hospital Acute Care Growth Contributors: KEYTRUDA GARDASIL Pediatric Vaccines BRIDION Lynparza Lenvima Growth Contributors: KEYTRUDA Lenvima Lynparza BELSOMRA Growth Contributors: GARDASIL Pediatric Vaccines BRIDION Growth Contributors: KEYTRUDA Pediatric Vaccines GARDASIL Hospital Acute Care Growth Contributors: KEYTRUDA GARDASIL Pediatric Vaccines BRIDION

43% 30% 25% 24% 23% 18% 18% 18% 16% 15% 14% 12% 9% 7% 4% Merck MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC MNC

CHIN CHINA BECOMING NEW PILLAR OF GROWTH A BECOMING NEW PILLAR OF GROWTH

28

Frank Clyburn

Fastest t growi wing multinati tional al p pharma mace ceut utical c comp mpany ny

Growth percentage over prior 18 months through 1Q 2019 for Top 15 multinationals.. Source: R&D-Based Pharmaceutical Association Committee (RDPAC) Report

Average: 11% Piv Pivoting

• ting po

portf tfolio

• lio

to to inno innova vation tion Rea eaching hing mor more e pa patients tients & & exp xpan anding ding cu custome stomer r ba base se

1

CONFIDENT IN GROWTH OPPORTU CONFIDENT IN GROWTH OPPORTUNITI NITIES ES AND AND ABILITY ABILITY TO TO EXECUTE EXECUTE

29

Frank Clyburn

Inno Innova vativ tive e por portf tfolio

• lio

with significant with significant demand demand-driv driven en growth wth Significant Significant inter interna national tional

• ppor
• pportunities,

tunities, nota notabl bly i y in China n China Wor

• rld

ld-class lass commer commercial cial teams teams execu ecuting ting in a in a changing en hanging envir vironment

• nment

Commerci cial f founda ndati tion n for

• r susta

tained d globa bal g growt wth