Merck at Goldman Sachs Conference: Pipeline and Strategy Insights

On Tuesday, 10 June 2025, Merck & Company Inc (NYSE:MRK) presented at the Goldman Sachs 46th Annual Global Healthcare Conference 2025, showcasing its strategic focus and future growth potential. CEO Rob Davis emphasized revenue growth projections and addressed external challenges, such as political pressures and supply chain issues. Despite these hurdles, Merck remains optimistic about its extensive pipeline and strategic investments.

Key Takeaways

• Merck projects over $50 billion in revenue by the early to mid-2030s.
• Significant investments in R&D and manufacturing, totaling over $21 billion from 2018 onward.
• Key products like clozrovimab and enlicitide are advancing in the pipeline.
• Manufacturing strategies are being adjusted to enhance supply chain resilience.
• Merck is committed to ongoing business development and innovation.

Financial Results

• Revenue potential is projected to exceed $50 billion by the early to mid-2030s, excluding MFN impacts.
• Over $12 billion has been spent on manufacturing from 2018 to 2024, with plans to invest more than $9 billion further.

Operational Updates

• Enlicitide (oral PCSK9) has shown positive results in two Phase III studies.
• Clozrovimab, an RSV vaccine, has received FDA approval.
• Keytruda manufacturing is shifting back to the U.S. in response to tariff discussions.
• Gardasil may face changes in ACIP recommendations regarding dosage.
• WinRevare is performing well, with increasing market penetration.

Future Outlook

• Merck anticipates nearly 20 new asset launches in the coming years.
• The company is expanding into immunology and ophthalmology.
• Development of next-generation products in animal health is underway, with more launches expected.

Q&A Highlights

• Merck is engaged in constructive dialogue with the administration regarding the MFN executive order.
• Business development remains active, with a focus on strategic and scientific alignment.
• The company is poised for more animal health launches than ever before.

Merck’s presentation at the conference highlighted a robust strategy and commitment to overcoming external challenges while driving growth through innovation. Readers are encouraged to refer to the full transcript for more details.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference 2025:

Unidentified speaker, Analyst: Let’s get started. Very excited to welcome the the the Merck to our next session, Rob Davis, chairman and CEO, Dean Lee, EVP and president of Merck Research Labs. Welcome, Rob and Dean. Great. Thanks for having us.

So Rob, there’s obviously a lot to talk about. There’s been a lot of news flow over the last twenty four hours that impacts Merck both directly and indirectly. But before we start double clicking on some of that, maybe I can just hand it over to you to make some high level comments. Yeah. No.

Happy to do it, and

Rob Davis, Chairman and CEO, Merck: thank you. And thank you for everyone in attendance and listening. Obviously, it’s an interesting time in the broader world, but if you focus in on where we are at Merck, I can tell you we are very excited about what we have in front of us. We’re really in a period of transformation. You saw yesterday we had two important announcements.

We announced two of our three Phase III study readouts for enlicitide, our oral PCSK9 with really good results there. We received the approval, the FDA approval of clozrovimab, our RSV vaccine. And really, this is just the beginning of what’s going to be a period of data readouts and product launches. As you look forward now, we actually have nearly 20 new assets. And if you include we have 20, if you would include the ongoing launches of WinRevare and Cavaxib that are both actually off to strong starts, nearly 20 additional launches of new assets coming over the next few years, which is really an exciting time.

In fact, there’s going to be more launches than we’ve really ever done in the company’s history across a very broad and deep area of therapeutic focus and across multiple modalities. So it truly is a time of transformation and will be a time of growth as we move forward. We see the potential for $50,000,000,000 plus of revenue, assuming obviously we’re putting MFN aside for the moment, out into the early to mid-2030s from a diversified set of therapeutic areas, cardiometabolic, immunology, ophthalmology, vaccines, HIV. So really exciting opportunity for the company looking forward. Obviously, a lot happening in the near term, I recognize, in the macro environment.

But what we do and what I try to make sure the team realizes is if we stay focused on executing against the pipeline we have in front of us, executing on what we have in our hands, we have a path for success and growth and sustainability. We do that. Everything else takes care of itself. That being said, I’m sure you’ll want to talk about the interesting political times we’re living in right now.

Unidentified speaker, Analyst: Well, I mean, I just feel like given the, you know, given the environment we’re in, we probably have just get that out of the So I will ask you to maybe you touched on it briefly, but give us your latest thoughts and framing of expectations on what’s going on in the political environment, specifically with regard to the MFN EO. How have the conversations with the administration been going? What is the status? Does it feel like there’s gonna be any resolution real near term? And then, Redi, how is Merck thinking about the range of outcomes that could play out over the near term and the longer term?

Rob Davis, Chairman and CEO, Merck: Yeah. So, you know, I would say as it relates to the to the administration, we’ve been in ongoing, very constructive dialogue with them across the whole set of, topics, really from the period of the transition of the new administration in up to current times. And I would I would characterize those conversations as very constructive. Obviously, they have a a a strong view of the agenda they want to drive. But what I found in my own dealings and from just watching the broader landscape of commentary that’s out there is if you’re willing to work with them to achieve those objectives, they’re willing to listen and and help find win win solutions.

So in that sense, I view that as as constructive because at least there is a two way dialogue. As it relates specifically to MFN, you know, conversations are ongoing. No clarity yet on where it’s going to go. Obviously, as Merck, I can tell you we remain very open to working with the administration to finding a path to achieve what, frankly, on principle, we agree with. You know, it starts with we agree that, in The United States, we need to get the prices of drugs down.

As Merck and as an industry, we continue to believe the best way to do that is to go after the fact that today, for every dollar that’s spent on pharmaceuticals, only 49¢ roughly, less than half, come to the innovator. 51¢ goes into the middle. And the quickest way we believe you get prices down is you go after that because I would argue negotiating and distributing does not deserve 51% of the of the dollar when the innovator who takes all of the risk only gets 49¢. If we address that, you can both bring down price and do it in a way that preserves the economics for us to continue to innovate for the future. So that’s something that we’ve communicated.

And I think you saw that a little bit in the way the executive order was written where they talk about trying to do a direct to patient MFN model was effectively aimed at that same concept. And then we need to get prices up outside of The United States. But the thing that we’ve tried to make sure everyone understands is, as industry, we can only do so much. And you’ve seen as an industry, we’ve started to raise our voice. We’ve started to put pressure where we can to address this with with governments around the world.

But candidly, it’s gonna take government to government action if we’re gonna do this. And so we’ve been very clear to discuss with the administration how can we use trade, how can we use the power of the US government to help us achieve that objective that we all share of seeing a a more balanced support for the cost of innovation both in The United States and outside. So those are the areas where we’re focused. But how does that all translate into an actionable plan in the near term? There’s still a lot of dialogue happening, so that’s not as clear.

Unidentified speaker, Analyst: And I guess just maybe staying with that thread, Dean, you made some comments last week at the ASCO event when you got asked about MFN pricing. You talked about always launching in the home country and then being thoughtful about how you launch in other countries as these policies take hold. Just unpack that a little bit for us.

Dean Lee, EVP and president of Merck Research Labs, Merck: Yeah. I mean, I think what I was trying to sort of indicate is we have a great pipeline. We sort of laid out where that great pipeline is, that we’ve diversified oncology significantly from KEYTRUDA and that we have things in different pockets, INT, RAS, ADCs. But I said, you know, that clinical data that we’re looking for, some of it that we reveal, we always think about The United States and be and launching in The United States And I said that, you know, as an American company who’s launching in The United States, we will always launch in our home country, and then we would need to be thoughtful with Rob and with Caroline as to how do we approach launching in other jurisdictions. We want our medicines to go everywhere, but we also recognize that there’s pressures that become real with an MFN.

Unidentified speaker, Analyst: Mhmm. And I guess maybe just to finish on the external environment on the policy side. On tariffs, Rob, any updated views on timing, scope, and magnitude? And I think I’m specifically interested in some of the vocabulary you’ve been using around sort of costs as you shift this KEYTRUDA IV manufacturing back into The U. S.

That wasn’t part of your initial intention, given that KEYTRUDA is approaching LOE, but you’ve had to pivot because of the situation. So how should we be thinking about the cost associated with that pivot versus your initial plans? And what are the mitigation strategies?

Rob Davis, Chairman and CEO, Merck: Yeah. Yeah. So maybe just to step back for those who maybe haven’t followed what we said in the past, if you look at where we are from a manufacturing strategy perspective, and this actually goes back to the times really coming out of the pandemic, but actually even back to 2018. So with the Tax Cut and Jobs Act that took place and was affected at the beginning of ’eighteen, we shifted our own strategy at that time to start to bring more manufacturing into The United States. And since then, from 2018 to 2024, we spent over $12,000,000,000 doing that.

So that’s both for manufacturing of commercial products as well as manufacturing of clinical supply and and the capital infrastructure around late stage development. So that was a move already afoot with the notion that we needed to be more regionalized in our approach to mitigate risk. And I would say the pandemic accelerated that because we recognize resilience in the supply chain is very important, and so we moved more aggressively with a notion of US for US, Europe for Europe, Asia for Asia, but then cross licensing everywhere we could so that we could always source from anywhere in the globe depending on what happened in any one region. So that was well underway. And then as we look today forward, we’re gonna be investing over $9,000,000,000 more going forward into continuing to bring back more of that in The U.

S. The thing on Keytruda specifically is that as a result of the discussions of what’s happened with the administration and the discussion of tariffs, we have made the decision to bring back manufacturing for KEYTRUDA into The United States, and we’re doing it through a phased approach. In the short term, we’ve brought in inventory of finished goods to be able to satisfy in the near term as well as bringing in inventory of drug substance, so the intermediate. We have signed contract manufacturing agreements with companies in The United States. We already had some drug substance intermediate production in The U.

S. Already, So we’re going to continue to leverage that and grow that and then leverage for a party contract manufacturer of drug product. Ultimately, we just announced that we broke ground on a facility in Delaware, which will be an all purpose biologics facility that will have the capability to produce both drug product and drug substance of KEYTRUDA as both IV and SubQ. Now I think the point you’re getting at is we are not moving the intellectual property with KEYTRUDA and and because, as you know, KEYTRUDA was actually discovered outside of The United States. It was discovered in Europe, and so the IP sits in Europe.

And so there will be, you know, some tax leakage, but we think that is something we can manage overall and is built into our thinking as we go forward.

Unidentified speaker, Analyst: Okay. Helpful. Maybe we can then pivot to just the regulatory front. I have to start with this announcement last night that we got that HHS secretary is removing 17 members of ACIP. And this announcement, unfortunately, comes right on the heels of your PDUFA and approval that came on time.

And so now I guess there’s now uncertainty about with is it gonna be around to rubber stamp this approval? So just high level, what would you make of this announcement? What’s the early framing there?

Rob Davis, Chairman and CEO, Merck: Well, I would say it’s in many ways, it’s too early to fully understand what this means. What we do know, if you look at the announcement that then came out again from HHS last night, they did say that the the June meeting is going to happen. Yeah. So you take it at its face that they’ve indicated there will be a meeting in June, and so we assume that will continue to be the case. How this plays out, we’re gonna have to see who are the individuals brought in to replace, the the current group.

So a lot of questions yet to be answered. We need to see it play out. But I pivot back to what I do know, which is the safety and efficacy of our vaccines, we are very confident in. If you look at klezrovimab, it was discussed at the April meeting, obviously, potentially a different group, was fairly noncontroversial. And if you look at the strength of the data we have around klezrovimab, we feel very good about it.

So our expectation is that will be discussed in the June meeting and everything moves forward, but we’ll see how it plays out.

Unidentified speaker, Analyst: Is there anything in your guidance, just remind us, for based on clozrovimab getting approved this year?

Rob Davis, Chairman and CEO, Merck: Yes. So our guidance does assume, and our plans have always assumed, that we would have clozrovimab approved and through the ACIP recommendation ahead of RSV. Of the of the RSV season.

Unidentified speaker, Analyst: And that is that continues to be our working assumption. Got it. Sticking with ACIP, I guess the other thing that’s topical is Gardasil. And at this point, I think going back to that April meeting, a lot of people are potentially expecting some kind of a recommendation for a lower dose, which obviously could create some headwind to U. S.

Gardasil sales. So just help us frame how Merck would adjust to potential outcomes here. And I would think it’s probably hard to raise price in this environment. So well, one, I

Rob Davis, Chairman and CEO, Merck: think before we jump into the response, let’s maybe update on where we see the situation. I maybe ask Dean just to speak to our view of the science of this, and then I can answer your question.

Dean Lee, EVP and president of Merck Research Labs, Merck: Yeah. So there was data that the ACIP thought in relationship to considering a single dose, which has been tried out in different countries and more recently in Costa Rica. And in those studies, they’re looking at immunogenicity for a short period of time, three years, and only in the female population. And the reason why that’s important is that at the same time that the CDC and the ACIP was considering that, we had long discussions with the FDA. And those discussions have happened under two administrations.

And what is very clear and consistent by the FDA is you have one of the most effective vaccines to prevent cancer. In order for you to change the FDA label, you must you must study in males and females, recognizing in The US, HPV directed to h HPV head and neck cancer is more prevalent than that of cervical cancer. You must do that. You cannot rely on immunogenicity. You must do disease.

And there were other things about how high the statistical bar was. That also recently became apparent. And I think that that conversation became more robust as we shared that. And we’ve understood that many people at CDC and at the ACIP, the previous membership, was not aware of such a strong opinion from the FDA that there is no data out there that would suggest or support a move to a single dose. But having said that, there is that discussion, and we’ll see how that goes forward.

But it tells you the strength of the data that the FDA requires to change a single dose.

Rob Davis, Chairman and CEO, Merck: Yeah. So if you look at so one, I think it’s we need to still see this play out. So we by no means have assumed there is a definitive outcome coming from that that that meeting. We have to see what happens with the full appreciation of all the data that the dean just talked about. But looking forward, the scenarios that could play out, you know, it depends on what is the recommendation that comes.

So for instance, if the recommendation from CDC would be to seek counsel from your physician to determine what is best for you, either to follow the label or to consider an alternative not off label dosing schedule, we think in that situation, it’s a manageable situation for us because we’ll have to see how many actually do adopt what is the recommendation, recognizing this will be one of the few times you’re going to see a recommendation that is actually off label. And so how does that manage in the system? We have to see. If it’s a stronger recommendation, that could have more of an impact. So we really need to see how these scenarios play out.

But to your question, is there ability to to get price? You know, we continue to believe if you look at the value Mhmm. Of what Gardasil gives you for for cancer protection, it is highly cost effective. It is one of the most cost effective treatments you could take. And we believe if you focus on the treatment for the prevention, not for the dose, there could be opportunities to get price, and we’re working through what that would be.

Unidentified speaker, Analyst: Okay. That’s very helpful, Rob. Thank you for that. I guess before we leave Gardasil, just very quickly, any update on China Gardasil dynamics? As

Rob Davis, Chairman and CEO, Merck: you saw in the first quarter, it continues to be a soft market and one where we continue to see inventories elevated. So as we sit here today, we continue to prepare for when that market turns, and we continue to be very excited about the mail opportunity with the new approvals we just got. We’re the only company with a with an approval for mail vaccination in that country. So we’re prepared for it. We’re gonna be ready, but no no expectations.

We’ll see what happens over time. It’ll be an upside surprise when it happens.

Unidentified speaker, Analyst: Got it. Okay. I have several other product level questions, but I wanna zoom out again and maybe just talk a little bit about M and A and capital allocation. So Rob, you’ve talked in the past when you when framing BD, you’ve talked about 1,000,000,000 to $15,000,000,000 being the range with a willingness to potentially go higher and that you’re also open to doing things that are commercialized. One question that we continue to get from investors is that you’ve seen other companies start to act on BD, but Merck hasn’t been that active recently.

So I guess what exactly is the holdup? Is it the signs? It the bid out spreads? Is it the synergies? Just maybe some high level framing.

Yeah.

Rob Davis, Chairman and CEO, Merck: Yeah. I think it’s context, and there’s a little bit of recency bias. If you look over the period of the last four plus years, actually, I think we’ve been the most active company in business development by pretty fair margin in terms of number of deals and dollars spent. So what we’re really focusing on is the short window of time here really just since the beginning of the year, and it is largely due to not a change in our urgency, not a change in our our desire or or strategy, purely just based on the timing of being able to identify opportunities and work through them to success, assuming that we find an opportunity where the science aligns with our strategy and aligns with value, we’re gonna act. And I’m I’m confident you’re gonna see us continue to be very active.

I would not focus on anything in this window where it seems like there’s been fewer deals. It’s just a matter of it’s just a matter of timing.

Unidentified speaker, Analyst: And I guess in terms of just areas of interest, Dean, you’ve been talking about your excitement in immunology. And I think you’ve said you want to advance there with speed as you scan the external landscape. And I know you want to build around the TL1A, which is a foundational asset. So maybe just give us some updated thinking there on what you meant by those comments. Yeah.

So when

Dean Lee, EVP and president of Merck Research Labs, Merck: we said that we were going to expand into other therapeutic areas, I think everyone thought, okay, they’re going to do vaccines. HIV, we were going to advance. Cardiometabolic, we had a recent history. But I don’t know that people knew that we were going to move our immuno oncology to focus on immunology, as we have, nor did they think that we were going to go into ophthalmology. In relationship to immunology, we believe that the TL1A class could be as important of a node as TNF and IL-twenty three.

We’re focused on IBD. I believe we’re the ones who triggered a phase three. And I think in the last month or so, there has been indications outside of inflammatory bowel disease that we’re expanding with the TL1A. We also think that the TL1A will be important in terms of future bispecifics and orals as well. We also did a deal in relationship to T cell engagers.

I think some people read the T cell engager for CD 19 for a company that’s diversifying their oncology into heme that the CD 19 T cell engager was for cancer. It is for cancer, but we’re a company who has a CD19 and other assets that are T cell engagers. And we’re very focused on moving them in immunology. So we are moving with speed in immunology. And I believe, for example, the TL1A readouts of the phase three readouts, if you look, I think come in the 20 sort of time frame.

So we’re very excited about that movement in the pipeline. Got it. And maybe before we leave the M and

Unidentified speaker, Analyst: A topic, Robert, just given the external environment, do you see any scope for the reemergence of large transformative transactions in the industry?

Rob Davis, Chairman and CEO, Merck: I think there’s always that possibility, but I don’t I think it’s too early to say that that’s where we’re heading. We need to see how does the environment play itself out. I can tell you as it relates to Merck, my firm belief and the belief of the team is that our best path forward is to continue the strategy we’re under, which is focus on great science. If you bring great science that addresses an unmet need in an unambiguous way, people will always give value for that, and there will be a path for sustainability and for growth with that. And we think, as I’ve started in my introductory comments, we’re as well positioned as anyone.

We’re, you know, on the cusp of moving into a new phase, which is a growth phase where we’ll be launching more products than, frankly, we’ve ever launched in a five year window. And I would include that in animal health as well, which is a whole another story I’m sure we’re gonna get to. So we’re very focused on that. And how do we add to that and continue to build upon that? That, to me, is the path for long term success.

Unidentified speaker, Analyst: Let’s go back to the product side. Let’s talk about cardiometabolic. Obviously, very topical in the context of the oral PCSK9 data sets you put out yesterday. Just maybe just talk through that a little bit. And specifically, like, when are we going to see more data?

And just maybe unpack that a little bit.

Dean Lee, EVP and president of Merck Research Labs, Merck: Yeah. So just to step back, we look at, especially in The United States, seventy percent of individuals aren’t at their cholesterol goal, and that’s triggering the plague of cardiovascular atherosclerotic disease. So we want to democratize the PCSK9 pathway. What we have said is that there are three important readouts. Two of them have read out.

And our ambition is to be the most potent LDL cholesterol lowering pill. And I said that we want to be in some sense a biologic in a pill, so the LDL reduction 50% range. We also want to be the most effective. And we’re looking for cardiovascular outcomes that hopefully read out in the August, September time frame, not at 15 I’m sorry, in two years from now, not in the 15% range, but in the 20% range. What we’ve said is that we will package all three of those trials together.

We will publish them. And we were hoping to present them at an important meeting. We’ve signaled towards the American Heart Association. So I think these two trials right now, along with the that needs to read out, will probably be all packaged hopefully all by the time

Unidentified speaker, Analyst: for American Heart Association. Helpful. And then, Dean, there’s still this lingering debate about food drug interaction and the fasting requirement relative to the AZN compound. Yeah. So the thing I would

Dean Lee, EVP and president of Merck Research Labs, Merck: do is when the data comes out, I think you’ll see how it is and and whether someone can just simply take it in the morning and and can they stay on it and how tolerable are it. And we’re very comfortable. People ask me how sure are you. I tell them I have three trials. I’m 67% more sure now than I was previously.

And we also believe, you know, this is there’s not a this is something that you should take in the morning. Right? It isn’t like a hard and fast fasting rule. It’s you should take it in the morning. And I think the other important thing is we think enlicitide will also be a great sort of combo strategy as you think about PCSK9, what are the other combinations.

You start thinking about statins, you start thinking about L. P. Illinois, and we’re very confident that we will also go into those markets as well.

Unidentified speaker, Analyst: Got it. Let’s stay with cardiometabolic and talk about vinrevir, very exciting new product cycle. Just maybe an update on the launch. And has there been any noticeable change in prescribing practices since the ZENITH data and the all cause mortality benefit that you showed at each ACC? And maybe I’ll start with just what we’re seeing with the launch, and

Rob Davis, Chairman and CEO, Merck: then Dean can comment. It’s continuing to perform quite well, consistent with what I would say was our own high expectations. So everything is on track. As you look at what we’re able to do, we continue to penetrate into the sickest patients. So this is patients who are on prostacyclines or three regimens.

But increasingly, and right now that’s a little less than 80% of the total of what we have today, we are increasingly seeing prescribing into the less sick patients, so we are starting to see that move, and we feel good about that, that that is going. And if you look at what Zenith has brought us broadly as well as just the continuing safety data we’ve seen, continuing readouts with Soteria and what we’re seeing there, and then building on obviously what we had with Stellar is an appreciation that this drug has the ability to fundamentally change the course

Unidentified speaker, Analyst: Mhmm.

Rob Davis, Chairman and CEO, Merck: Of a person facing pulmonary arterial hypertension, and it’s leading to continued uptake consistent on trend with what we thought. It’s not a we we don’t expect a trend data. But this is just solidifying the the trends we have. And I guess, the

Unidentified speaker, Analyst: Dean, on the CADANCE study, just any update on the timing of the readout, and maybe just help frame for us what would be considered a positive outcome in that

Dean Lee, EVP and president of Merck Research Labs, Merck: So just to reframe the PAH market, the pulmonary arterial hypertension, just to remind, sotatercept looks very different than the other mechanism of action. All the other mechanism of actions are vasodilators. This is one that’s driven at the genetic cause of the disease. And, you know, the Zenith trial with its more, you know, all cause mortality, hospitalization, this, that’s a standout. So we look the way that I think about srtatercept, if I have an analogy sort of thing, is it it smells to me that srtatercept or Wind River is a little bit like Keytruda of PAH, and so it will combine with lots of others.

What we’re trying to do with the CADANCE study is expand it to a broader patient population that’s outside of PAH but still a very defined population. And it’s the defined population of those patients with heart failure who have not the genetics of a PAH but have the physiology and the pathology of PAH. And we hope to see those readouts, I think, later on this year or early next year, which would then trigger whether or not we move to phase three. So we’ll see what those data are. And if it’s successful, I think it will be an important advancement for PAH, PH, and for winravir.

Unidentified speaker, Analyst: And just before we leave it, and I wanna move to oncology, just the INSMET TPIP data this morning from top line data, at least, that result came in above sotatercept, and they’re talking about the potential for TPIB to be chosen before sotatercept because of bleeding risk. Is there any thoughts on that? Well, I mean,

Dean Lee, EVP and president of Merck Research Labs, Merck: I would just sit there and I said when you look at the bleeding risk that’s been laid out for Stellar was three percent. For Zenith, think it’s one percent over placebo. So I would be careful of thinking about that, especially when you have data suggesting it can reduce mortality, hospitalization, and this. So no one has the efficacy of us. And if one is gonna talk about bleeding, one looks at Zenith and a placebo adjusted of one percent in that patient population, that benefit risk really slides over to the benefit.

But I do think the field of having other vasodilators and having innovations, that’s great. I see a world where both of those drugs, those classes are going to be playing against each other. The vasodilators are also going generic. What I would say for winravir and sotatercept, I know of no other mechanism of action that’s similar to ours that’s in clinical trials right now. So we think that we have a strong position in PAH.

I mean, they’re very complementary. Very complementary. Yeah.

Unidentified speaker, Analyst: All right. Let’s talk about oncology. You guys hosted an ASCO event last week. And I think one of the things that was fascinating to see is that you guys have one of the broadest ADC programs in the industry across a number of different assets. But there’s obviously, you have these PD-one VEGF bispecifics as well.

So maybe just updated thoughts following recent developments. You’ve had Pfizer’s 3S Bio partnership. You’ve got data. You’ve got the Bristol BioNTech data. And I guess how important is speed to market?

Because I guess from a time line perspective, Merck could be sort of behind some of these. And but then you and I talked a little bit about potential acceleration strategies. So maybe unpack that a little bit. So what we were trying to do at ASCO is to get people to realize

Dean Lee, EVP and president of Merck Research Labs, Merck: I mean, we have, I think, 60, at this one moment, 60 registrational trials moving forward in oncology along across immuno oncology with INT, with RAS trying to put it in line in lung, and a broad aspect of ADCs. And I don’t know that people understood that as well. The critical thing for us is that many of those products we defined as being informed with what we would know about Keytruda and how to combine them. And some of them were also informed by where Keytruda didn’t work and where we put it. And the context of that created a situation where we think that the PD-one VEGF story is an interesting story.

When people talk about their bull case or their bear case, they often say, well, would the PFS turn into OS? And often they’re talking about our clinical trials, which we’ve had like 10 to 12 of them. So the PD-one VEGF, as we advance it, we think that that PFS of point five one is an interesting. We’re moving it with speed. We’re gonna move it very fast.

And the question that got out of ASCO is at what point will you start combining it with all your other assets? Yep. And will you make that that trade off? I said at this point, I’m not gonna make that trade off. I’m gonna move fast on But believe you me, I have how many ADCs?

I’m not gonna slow down my 2 three, but I have, like, five, six that I might switch over to PD one VEGF should the signal. So we’re going to move with speed in parallel. And at some point, we will have to make a decision of because an oncology combination is important, when do we begin to combine with a novel agent

Unidentified speaker, Analyst: at scale? Helpful. And maybe just on subcu pembro. I guess there’s been a lot of focus recently on the potential inclusion negotiations. So what’s your position?

And what would be the impact to SUBQ BEMBER if it was included in those negotiations? Start with the part because

Rob Davis, Chairman and CEO, Merck: I think it’s probably the most important part, which is based on the assumptions we’ve made, which is to drive for the fastest adoption. So we were we obviously will price for access and adoption. The whether it is included whether subcutaneous pembrolizumab is included in the IRA or not actually does not economically change our planning because we always had a scenario focused more on how to drive adoption with with sub q. So but I will say, as I focus on what they’re doing, what is being proposed by CMS, it’s more a concern of the precedent it sets because it takes what today is a very hard endpoint driven way of thinking about when a combination is going to be affected by negotiation or not, which is look to how the FDA considers it when they do requirements for clinical studies and moves it to something that’s much more subjective. If you look at the language that CMS has proposed, they talk about is it therapeutically active on the disease state?

I could say, well, how do you define therapeutically active? It just brings lack of clarity and unpredictability and lack of certainty, which as people who invest in long dated studies, expensive studies, that predictability and certainty is important as a policy matter to drive for the right combinations. And that’s really critical if you think today almost every major field is moving to combination therapy as a way to advance care for patients. I would hate to see that slowed down or impeded. And that’s the main point we’re trying to make to that precedent issue, but it’s not an economic issue for us as we think about how to manage the adoption of subcu or the economics of what that means to our long range plan.

Unidentified speaker, Analyst: Okay. Very clear, Rob. And I guess we have about just over a minute left, and I do want to talk about Animal Health. And I know you probably do as well. I mean, look, by our math, this segment remains highly undervalued in Merck compared to publicly traded comps.

You know, it’s a $6,500,000,000 revenue base that’s growing low single digits to mid single digits. So I guess, you know, how do you bridge that disconnect?

Rob Davis, Chairman and CEO, Merck: Yeah. Well, you know, one, I would say we’re very excited about the animal health business. And what you see in the animal health business is story mirrored to our human health business. We’re gonna have more launches in the next five years in animal health than we’ve ever had. And it’s gonna cover both the companion animal space.

We have a next generation derm product coming. We have a long acting BRAVECTO coming. We have a triple parasiticide coming. So all of those are coming in companion animal. And then likewise, we have a whole suite of vaccines across really all of the categories on the production animal side where we are the number one market leader by far, and we have a whole suite of technology offerings coming.

So our ability to drive above market growth in that business is quite strong, and we’ve invested heavily behind it, and I feel very good about it. The one thing I don’t think is appreciated is how much of that story is driven by the operational synergy that exists between our human health R and D and our animal health R and D, both in terms of our ability to identify targets like our derm product, like our oncology product. We’re actually launching, if you will, Keytruda in animals. And all of those are based off of the human health business and the catalog of products we have there, some of which we’ve launched, some of which we haven’t. So it’s both finding the targets but then accelerating them to launch, leveraging some of the clinical work we do on the human health side.

So I’m excited about the business. The synergies are real, and it’s an important part of our total growth story.

Unidentified speaker, Analyst: Great. Well, we are just about out of time. Thank you very much. Very comprehensive discussion. Really appreciate your thoughts.

Great.

Rob Davis, Chairman and CEO, Merck: Thank you

Unidentified speaker, Analyst: very much.

Dean Lee, EVP and president of Merck Research Labs, Merck: Thank you. So much.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.