Merck at Wells Fargo Conference: Navigating Keytruda’s Future

On Thursday, 04 September 2025, Merck & Company Inc. (NYSE:MRK) presented at the Wells Fargo 20th Annual Healthcare Conference 2025, offering insights into its strategic direction amidst upcoming challenges. The company emphasized its robust pipeline and growth potential, while addressing concerns such as the anticipated loss of exclusivity for KEYTRUDA and macroeconomic headwinds.

Key Takeaways

• Merck plans 20 product launches, aiming for over $50 billion in revenue by the mid-2030s.
• The company is preparing for KEYTRUDA’s loss of exclusivity by diversifying its portfolio.
• Merck’s oncology pipeline includes promising assets like TROP-2 ADC and PD-1 VEGF bispecifics.
• A $3 billion cost savings program will fuel increased R&D investments.
• Gardasil growth is expected through international market penetration.

Financial Results

• Merck anticipates more than $50 billion in revenue from its pipeline by the mid-2030s.
• A multi-year optimization program is expected to generate $3 billion in annual cost savings for reinvestment.
• KEYTRUDA’s subcutaneous formulation is projected to capture 30% to 40% of its market within 18-24 months post-launch.
• The Medicaid segment accounts for less than 10% of Merck’s U.S. revenues, limiting the impact of the Inflation Reduction Act (IRA).

Operational Updates

• Merck is conducting 24 oncology clinical trials, with nine focused on new indications.
• The company is in the process of launching 20 new products with blockbuster potential.
• Recent launches include WinRevare and Capvexib, with Inclonsia in early stages.
• Gardasil growth is driven by penetration in adolescent males and mid-adult segments, especially in low to middle-income markets.

Future Outlook

• Merck’s pipeline expansion aims to generate significant revenue by the mid-2030s.
• The company plans to enhance its portfolio through strategic business development, including the acquisition of Verona.
• Increased R&D investments will support 80 Phase three clinical programs.
• Merck is collaborating with Moderna on personalized antigen therapies.

Q&A Highlights

• The adoption of subcutaneous KEYTRUDA is expected to face initial challenges without a permanent J code.
• TROP-2 ADC and VEGF inhibitors show promising results in clinical trials.
• Tariffs and IRA impacts are considered manageable, with less than 10% of U.S. revenues affected.

For a detailed understanding of Merck’s strategies and future plans, refer to the full transcript below.

Full transcript - Wells Fargo 20th Annual Healthcare Conference 2025:

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Thank you very much for joining us today for the lunch session. My name is Mohit Bansal. I’m one of the Biotech and Pharma Analysts here at Wells Fargo. And I’m very happy to have the Merck management team with us. We have Caroline Litchfield, the EVP and CFO of the company.

We also have Eliav Barr to talk about all the pipeline here, exciting pipeline. So Eliav is the Senior Vice President and Chief Medical Officer of all the pipeline here, managing all the pipeline development here Mark. So thank you very much for joining us today.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Thank you for having

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Thank you. So Karin, why don’t we start with just give a high level overview of what you what the progress Mark has been making and what you are how what is the investment case in the company right now given the investor setup here?

Caroline Litchfield, EVP and CFO, Merck: So thank you all for being here and thank you for your interest in and support of Merck. Merck is at a time of transformation. We’re moving forward with a diversified set of growth drivers for our future. Indeed, we’re in the midst of launching 20 products, all of which have the potential to advance patient care, almost all of which have blockbuster potential. We have stated that we have the potential for more than $50,000,000,000 of revenues by the mid-2030s from this expansive pipeline.

And as a team, we’re focused on bringing forward these innovations and excelling in the marketplace. We’re pleased with our recent launches of WinRevare of Capvexib. We’re at the early stages of our Inclonsia launch. You’ve seen some data readouts just this week, we highlighted our Phase three data for enlicitide, our oral PCSK9. We’ll have readouts in ophthalmology in HIV in the coming months next year.

So we’re excited about our future and our confidence in our ability at navigating the KEYTRUDA LOE is increasing. But we acknowledge we’re not yet done. We continue to look to bring forward our pipeline to excel in our launches and augment our pipeline and portfolio with business development as we did with the planned announcement of the acquisition of Verona. So we’re excited for our future and we look forward to all of your questions.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Awesome. Great. So why don’t we start with a small product named KEYTRUDA you have. So the product has been growing. So again, people are concerned about the clips and all that, but we’ll come to that.

But before that, we have seen tremendous growth in lines of setting. So what are the next avenues of growth there? And can this product sustain the growth in next few years here as well?

Caroline Litchfield, EVP and CFO, Merck: If I start, Elias can add what we have coming through. We’re really proud of the impact that KEYTRUDA is having for patients as they’re being treated with cancer. And as you all know, we are offering treatment for a wide range of different cancers, 42 indications now approved in The United States across 18 different tumor types and two tumor agnostic indications also. So we’ve seen profound impacts of patients and extremely strong growth and impact for our company. As we go forward, we do expect continued growth for KEYTRUDA.

And the opportunities for growth will come from new indications. We are still launching the early stage lung cancer indication in our ex U. S. Market. We have women’s cancers such as endometrial cancer, cervical cancer, which are important opportunities for patient impacts and growth.

And we have bladder cancer indications, some launching right now, some that we’re hopeful for readouts next year. So we do see continued growth in KEYTRUDA, albeit it will slow as we continue to penetrate in some of those indications we’ve been in for some time. Another opportunity for us with KEYTRUDA is also the new formulation, our subcutaneous And that will enable us to benefit many patients by having an administration that will just take a minute or two for the patient. It’s going to be extremely helpful for patients we believe who are taking KEYTRUDA in monotherapy or in combination with another oral agent or in the earlier stage cancer setting. Today, 25% of the revenue of KEYTRUDA is for patients being treated in the earlier stage setting and that’s growing.

And this will be an opportunity for those patients. So as we look at the subcutaneous opportunity, we’re very excited about that and would expect adoption to be around 30% to 40% of the overall KEYTRUDA business in about an eighteen to twenty four month window post launch. So there’s some of the elements that we remain excited about as we continue to help patients with cancer.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: And can you talk a little bit about, I mean, what could make this adoption faster or slower? I mean I mean, there is another PD-one with subcu option out there. So what can you learn from that experience?

Caroline Litchfield, EVP and CFO, Merck: So I think what’s unique for KEYTRUDA is the breadth of indications it has and its utilization in the earliest stage setting. And that will we hope enable more patients to benefit from a subcutaneous formulation in their treatment journey. What we’ve learned from others is the importance of pricing, access and the J code. So as we look at entering the marketplace, we are pricing to enable broad access for the product. And we are also mindful though that within that first six month window where we will not have a permanent J code, we will expect that to be somewhat of a headwind to growth in those initial months.

That said, and as I mentioned, we still expect to see us get to a 30% to 40% adoption and to get to that level in an eighteen to twenty four month window.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. Very, very helpful. I think the question is for you, Eliav. Like again, like if you think about now, like you last few years, have been trying to build up pieces of the puzzle to actually fill that perceived hole when KEYTRUDA goes off patent. So you have Trop-two, you have PD-one VEGF now, early stage, and you have a bunch of other assets.

So if you look at that portfolio, I mean, if you had to like how would you which kid you like the most kind of question, right? Yes.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Well, you have to be careful not to discriminate against all of your children. But we have but in reality, we’ve got 24 oncology assets in clinical trials right now. Among those, we can divide them into three categories. Those to continue the immune stimulation against cancer and V940, our collaboration with Moderna on personalized individual new antigen therapies one. The second category is to improve on chemotherapies and other tissue targeting approaches.

And here, I would highlight our TROP-two, Sac TMT as well as our collaboration with Zai Chi Sankyo. And among those, both IDXD and RDXD, these are two compounds for in small cell prostate, ovarian cancer and others. And so you can see they are relatively broad. With respect to the last category, the last category is specific targeting agents that address those drivers of tumor growth. MK1084, our KRAS G12C mutant inhibitor is really an outstanding exemplar of that.

Bilzutafen is already marketed and is continuing to be in large scale clinical trials. We’ve had some positive results there. And then there’ll be others like KRAS and other agents that are novel hormonal agents that I think will be very important in the treatment of different kinds of cancers. So we have a very large portfolio in oncology. I really feel confident that we’ll be able to leverage pembrolizumab to create very important new medicines that will help outcomes and improve lives.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. So let’s start with TROP-two ADC here because you have a massive program going on. We have not seen a ton of data, but you obviously have seen the data. So can you talk a little bit about your confidence level in terms of what you have seen with the data Calyndon has been generating and what gives you confidence to start this massive program?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Absolutely. So the TROP-two ADC from that we have, sacituzumab trilumetikan or STMT, is a unique molecule that was developed in Killeen in China. And one of the things that very much helps us with this is that we have a lot of advanced notice from them and the clinical trials that they’ve seen there. But it’s unique to the extent that it’s very potent. It does not have interstitial lung disease issues.

And if the dose we’ve chosen is actually fairly well tolerated and can be used in the more maintenance settings. So if you compare the strategies that we’ve employed compared to some of the other TROP-two ADCs, they’re quite different. We have seen very exciting early signals that have led us to 14 clinical trials that are available, nine of which are that are publicly available on ct.gov, nine of which are for new indications where others have not gone and five of which are where we have a differentiated approach. We think that those Sac TMT will be a great workhorse agent for to combine with pembrolizumab or any other immune checkpoint inhibitor. And we’re also going back to the beginning with Killeen, we’ve already seen they have some pretty amazing results in China.

Of course, we have to replicate that in the global setting, but that provides us with a lot of confidence.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. So what’s the confidence level that this drop to ADC or Clune top to ADC would be able to differentiate against, especially Trodelvy, right, because obviously the other one has ILD issue, but Trodelvy is there.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Sure. And Trodelvy has got pretty significant GI tox. But those drugs have been focused on specific lung and breast indications, whereas and have not done very well elsewhere. We have actually a program that’s much more that’s much broader in maintenance settings. And the first indications will be in things like GYN cancers.

Caroline mentioned the importance of pembrolizumab in the Asian population and we’re we think that that will be an important leverage point for us. I’d also point out that there’s a lot of excitement in our at least for us in maintenance settings, where we’ve seen, for example, in lung cancer, maintenance chemotherapy has been difficult to take and maintenance VEGF has been difficult But with TROP-two ADCs, we think we’ll be able to achieve that. So there it’s differentiated program. We think we’re going to have we’ve hit the sweet spot in terms of the dose. And with that, I think it’s going to be a very important addition.

Got it. Very helpful.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Thank you for that. Now let’s just talk a little bit about the immune checkpoints, right? I mean, so before we get to VEGF PD-one, I mean, the question I want to ask is that we have seen multiple iterations like there was IDO, there was Elektri, there was TIGIT. Like again, every trial kind of proves that KEYTRUDA is a very good drug. So like if you’re trying to compare against it, what is different with VEGF PD-one versus the prior failures, which made you look into it?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Sure. So just to step back, VEGF inhibitors have been tested pretty extensively in the setting of various cancers. One of the things that’s clear is that in some cancers, have both PFS and OS benefit. So the most important is overall survival benefit, right? Progression free survival is important, but nothing like overall survival.

So that mechanism of action has been important. One of the things that’s notable about VEGF inhibitors in general is that they have really good progression free survival and not so, not so good overall survival. And so that’s been sort of a cloud and a limitation to that field where there’s only been a few indications where VEGF inhibitors have been incorporated. We’ve done an extensive program looking at the combination of VEGF inhibition and PD-one separately. In those cases, the benefits are really quite limited to renal cell cancer and endometrial cancer, which are really quite vascular tumors.

Now come the PD-one VEGF bispecifics, and there’s all sorts of theories around why these drugs might have a specific and special benefit. The results so far that we’ve seen with ibunestumab and to some extent with BNT-three twenty seven has been interesting with respect to progression free survival. Akeso has noted that there is that they have hit in the final analysis an overall survival benefit in one of their studies in EGFR mutant non small cell lung cancer. But that was only in the final analysis. So the big question with all of these drugs, will you be able to have an OS advantage?

And the reason for that is that VEGF inhibition chronically administered is not well tolerated. And there’s always been a question about the second agent that is after you progressed, whether you’ve created a change in the biology that leads to high resistance. That’s why everyone has been so focused, both from an investor point of view and certainly for us, where is the OS benefit? Is there OS benefit? Is that OS benefit convincing?

Does it justify some of the talks that have seen? In what specific settings will that be good? So we’ll have to see about that.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: And you have quite a lot of experience with your own LENVIMA experience there. So how can you use those learnings into the development of this program?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: A lot. A lot. There’s a lot of so one of the things that is so wonderful about our oncology group is that we have all of the data from hundreds of pembro trials now forming the basis of standard of care around the world, as well as the so called LEAP program, which is the program that was with lenvatinib. From all the data, we can model out what are the potential additional issues benefits that you have and what might be the places where you start to see problems with VEGF inhibition. And so we’ve looked at that carefully.

And our development strategy for MK22 twenty ten, which is the our PD-one VEGF will be very much focused on settings where we might where we think the sweet spot will be. Again, it still remains to be determined whether these agents are going to be just PFS agents, but have issues with OS. And that uncertainty, even with that one result, still remains. And remember, in China, for a regulatory approval, you need progression free survival. That’s it.

In The United States, OS is king, and FDA has insisted on it, especially in settings like frontline metastatic lung cancer. So that’s going to be the challenge for the field.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: So this brings me to the next question because if you look at the front runners, SummitBalantech, they’re all going after KEYTRUDA in its strongest indication, that is lung cancer, right, first line lung cancer. Logically makes sense, but at the same time, you are going after KEYTRUDA in an indication where KEYTRUDA is very good. So I mean, you think about, I mean, you will have an advantage of like slightly behind, but at the same time, can learn from them. Is there a room is there a way to think about going after indications where KEYTRUDA works, but it could work better with a PD-one on the how like it’s you get my question here, right?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: I got the question. So the question is whether you can is there places where there’s room to go with your PD-one inhibition? And the answer is that’s very that’s one of the reasons why we are so excited that we have the ability to look across therapeutic indications with pembro, not only with lenvatinib, but also recall we have done some clinical trials with a whole variety of other TKIs based on collaborations that we have done with ADCs, with all sorts of other things. So we can take a good look at where that special advantage might be. The way I consider PD-one VEGF, there won’t be it’s not going to be another KEYTRUDA.

Just not. They’re going to be specific places with specific potential benefits and specific strata of patients. That’s the that last bit is the important bit, because all comers and it’s going to be it’s going be very hard high bar to win in a drug like pembrolizumab that is pretty that’s extremely active. So you’ll have to look at even in places where KEYTRUDA is somewhat less active, where the hazard ratio is a little bit it’s still a pretty high bar because oftentimes it’s good with chemo. Got it.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Very helpful. And then so now that you are generating data with your partner in China, so could we expect a drop to like situation where you start to see the data and then you invest in this program? We are

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: always we give all of our assets stage appropriate investment. It deserves no more and no less. So we’re very, very data driven. We’ve had a lot of we’ve had a pretty rapid development program in China. And based on that, we’ll come forward with some interesting trial designs.

It’s also helpful that our partner, Kallun, is there as well. So we can do a lot of work in that environment and prepare for Phase III should that should the data support it.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Is there like what is your internal understanding about there are differences in molecules, but is it going to be a PD-one like situation where ultimately clinical profiles were different than the molecules as such?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Well, I do think in this particular instance, it’s going to be important to look at the ratios. And I’m not and this isn’t because of some magic. It’s just too much VEGF inhibition. If you get bevacizumab like VEGF inhibition, that’s not so good. They’re just not tolerable.

The same is true with some of the other TKIs that are valuable, but only in a specific segment of patients. And so you have to get to that sweet spot. We’ve always been a believer in PD-one inhibitors, not PD L1, but that all will depend on the clinical profile.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Yes. This is what I’ve heard like, mean, bevacizumab has a twenty one days half life. In bispecific, at least the one which has reported is only four days. So that may be one of the

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: reasons why safety is going Yes. Be But the other piece is if you have to really thread that needle, you wonder. I mean that’s going to be an issue we have to address. Again, I’m excited about this class, but it has to be in a very data driven way and OS is king.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. And where are you with the cancer vaccine program at this point? I mean, we had some interesting Phase II data. So how do you think about development there?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: So one of the things that’s been exciting about this program is how enthusiastic investigators are. I’ve always believed that enrollment speed is a not bad indicator of excitement and interest in the mechanism of action and in subsequent commercial success. The area where we we’ve chosen a different development strategy than other cancer vaccines simply because we’re interested in early cancers. We’re interested in those cancers where patients have a potential curative opportunity, where they still have a fairly intact immune system and where we can define the tumor mutations that are going to be most immunogenic. That said, we are spreading out.

We’ve now looked at some cancers that are very immune responsive, but don’t have quite as many tumor mutations. And we will be doing some evaluations in first line metastatic settings. But more than anything, I think that this Phase III trials that we’ve put together and the Phase II programs are really focused on early stage cancers. The readouts will occur in the next couple of years and with melanoma being first, and we’re really excited to see what those results are. In the meantime, Moderna is gearing up to prepare for the good news should it occur, and we’ll be ready.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Awesome. So before we go into nononcology side, so I have some questions for you. So obviously, we have to talk about MFN and tariffs here. So the macro headwinds, like how do you see all these macro headwinds at this point coming out from administration? And how can a company like Merck can prepare for something like MFN, tariffs and all those situations?

Caroline Litchfield, EVP and CFO, Merck: So from a tariff regard, you’ve heard Rob talk to the fact that our company is well positioned for what we currently know. We have worked very hard over many years to ensure that we have a diverse footprint for our supply chain, that we have manufacturing here in The United States and outside of The United States, and we’ve been investing here in The US. So as we look at tariffs, and we look at the placement of our products for our current portfolio, we feel that the impact of tariffs are manageable for our business. And as we look at the many launches that we have coming, we’re ensuring we have a footprint that enables manufacture here in The U. S, in Europe, for Europe, in Asia, for Asia.

Now clearly, we need to see the final details. But as we sit here today, we feel that we are well positioned. With regards to MFN, we and the industry is supportive of the agenda to try and lower out of pocket costs here in The United States and ensure that countries around the world are paying their fair share for innovation. The recent letters we all received from the President has MFN focused in the Medicaid segment. That’s a relatively small segment, less than 10% of the revenues for our company here in The U.

S. It looks at MFN as you launch product, and we would make sure we’re launching products cognizant of MFN. And there’s some other elements to it. So for us as a company, we remain focused on innovation, focused on our pipeline, because if we have products that truly make a difference in the world, we price them commensurate with the benefit that we are bringing to society that will drive growth into the future. And we’ll see what the details of MFN may or may not be as the next months and years unfold.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. So the question we get a lot is that, I mean, would the companies consider pricing their ex U. S. Drugs differently for the new year launches going forward, considering the MFN and all those issues? Yes.

Caroline Litchfield, EVP and CFO, Merck: So we always look to price our products around the world commensurate with the values that we’re bringing. Often in certain countries around the world, the processes that they have around the pricing is formulaic in nature. What is helpful with the MSN news flow at the moment is governments understand that if they don’t step up, they will be at risk of not having innovation come to those markets. So for our company, we will continue to stand firm in launching our products at a price point that we think is appropriate and commensurate with the value that we’re bringing.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: That completely makes sense. Thank you for that. And then the other question is to like, I mean, IRA and the question we get a lot, I mean, like now I think with IRA, with the big beautiful bill, you probably would have one year extension for KEYTRUDA. But the question always is, would subcu be part of like because the first guideline kind of suggested it won’t be, but now it does look like it would be. But how are you thinking about subcu being part of not part of?

Caroline Litchfield, EVP and CFO, Merck: Yes. So as we talked about earlier, we’re really excited about the opportunity to launch the subcutaneous formulation of pembrolizumab. As we look at the IRA, the original IRA was in line with the FDA in that subcutaneous is a new product to active moiety combined, and therefore, not be subject to IRA at the same time as to Keytruda, the IV portion. The CMS requested responses to a proposal that suggested maybe it would be subject to the IRA at the same time as KEYTRUDA IV is. We obviously gave our responses and we think that’s just bad policy, bad practice.

That said, should KEYTRUDA IV and subcutaneous formulation of pembrolizumab be under the IRA price setting at the same time, it doesn’t fundamentally change the economics for the subcutaneous formulation. And the reason is we are pricing the product to ensure broad access. We’ll do that at launch, but we’ll also need to ensure we understand the market dynamics as biosimilars enter the market as IRA price setting on KEYTRUDA IV, so that we do maintain access and maximize really the volume that we will have from KEYTRUDA subcutaneous formulation.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. Very helpful. One more question before we move back to the pipeline side. So like you mentioned, like so the like you announced the plans to reinvest the savings from $3,000,000,000 restructuring program here. So it is quite interesting, right?

I mean like so there’s restructuring, but again, at the same time, Merck at this stage has to invest in pipeline as well, right, given the exciting opportunities out there. So how should we think about operating expenses growth, specifically R

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: and D in next few years here?

Caroline Litchfield, EVP and CFO, Merck: As Mohit mentioned, our company announced last quarter a multi year optimization program. And this multi year optimization program will drive productivity across every element of our business, from our manufacturing supply chain, the way we conduct our business, sales and marketing, research. And we’re doing that to drive $3,000,000,000 of annual cost savings that we will fully reinvest in our future. Our company has one of the strongest pipelines we maybe ever had. And we must fuel that pipeline.

So we will be increasing R and D investments because of the breadth of the pipeline. We have 80 Phase three clinical programs today. We’ve got these 20 plus products launching, we’ve got an invisible pipeline, the early stage that will be turning visible. So we will, as Elias mentioned, appropriately fund R and D, grow R and D, we will appropriately fund SG and A, as we’re bringing these new products to the market ensuring that we’re funding our launches to compete effectively and excel in those launches, so that we drive growth for our business into the future.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. Very, very helpful. Thank you for that. Maybe moving back to the non oncology pipeline here. So vindrovir, I mean, this launch has been exciting.

You have a new set of data and new indication coming with Cadence. So can you help us set the stage here vis a vis PAH, how big the opportunity could be because you will probably go after a subset there. So can you help us understand all that?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: So you’re talking about the Cadence study?

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Yes, yes.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Yes. Sorry. I didn’t quite hear. So you’re right. We have a Phase II program in type two pulmonary hypertension.

Type two pulmonary hypertension is a diverse set of diseases that are associated where pulmonary hypertension or high blood pressure in the pulmonary arteries is caused by different problems in the heart, in the left heart. And so there are different kinds of diseases that cause that. We have a specific type of disease that roughly is in size the size of pulmonary arterial hypertension, although not as well diagnosed, where there’s pressure both before in the precapillary and postcapillary. So it’s called CPC HFpEF, very long name, but in short, people who’ve got high pressure both in the arterial system and in the venous system. We have hopes that sotatercept will be WINRVAIR will be active there simply because the biology is not too dissimilar.

And when we look at how the what the arteries look like, they also have that same kind of proliferation of the vessel wall, the thickness of the vessel wall that happens with PAH. But it’s a separate indication. Those data will be available later on this year and we’ll be discussing them hopefully at the beginning of next year. And we’ll see. Based on those data, it’d be a very important new addition to the WinRevir indications.

Got it. Very helpful. Another cardiovascular drug, I mean, PCSK9, oral PCSK9, again, there have

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: been ebbs and flows on this one, like obviously, like you have had good data in Phase II. The question is now with the AstraZeneca having no food effect versus food effect, I mean, do you think about this portfolio evolving there? Because the drug should work here, right? So that did work.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: So look, the most important thing that physicians are looking for is a drug that’s really active. First of all, statins have been terrific, but guidelines are pushing people to have ever lower LDL cholesterol levels. And it’s really important because, obviously, the benefit of LDL lowering has no basement. There is no bottom where it is no longer important. So you need to have medicines that are available that can be given and really improve on what statins have.

Enlistatide or MPA-six sixteen or PCSK9 oral inhibitor will democratize access to this particular mechanism of action as opposed to the injectables. It will give the ability to take one pill once a day. No problem in terms of access barriers and so on. And we think that’s going to be a very important addition. And the data from Phase II showed 60 ish percent reduction in LDL cholesterol.

That’s essentially consistent with the injectables. What we’ve seen in our Phase III program is exciting results that are consistent with what we think we need to create a really important innovation for patients akin to the injectables. We’ve in the Phase three studies, the proof of the pudding, including the largest one, this business around taking it after when you get up in the morning has not been an issue at all. Compliance was really terrific. We had no adverse experiences, no difficulties where patients had a problem.

And when we talk to our scientific leaders and practitioners, this really isn’t an issue. What they are interested in is what’s the best reduction that you’re going to get. And if you look at our Phase II data, a little over 60% reduction in LDL cholesterol, reductions in Lp. Time to market is very important. We have two years during which we’ll be the sole oral PCSK9 inhibitor, we think.

And at the same time, we’ll also have the best profile, I think, overall.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. Very helpful. Maybe like finishing up the cardiometabolic. So where are you with GLP-one at this point?

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: So we’ve we’re very excited about cardiovascular and metabolic space because there’s still such a high unmet medical need. And as we look at enlicitide, we’re looking at also next generations where we would combine it with different agents that might further improve prevention of atherosclerosis. On the GLP-one front, you’ve seen that there’s been a lot of expectation setting around what kind of reductions are needed to excite investors. But from my point of view, I think and from our point of view, the fact that you can have an oral medicine really is a big deal. And so we have a MK40A2 that will enter Phase one later on this year.

And we think that the differentiation will be in what combinations you’re going to put in together, what combinations are going to be tolerable, how many different titration steps you’re going to need, because remember, it’s not easy for physicians to keep track of all of this, especially if they have to rush, rush, rush every patient through to meet their numbers. And so we’ll have to see. But I think oral in general, in my mind, oral is always better than injectable.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. Very helpful. Moving to the BD a little bit here, and I’ll talk about Gardasil as well. I wanted to know thirty five minutes, we did not talk about Gardasil. So BD, I mean, like we saw I think Verona is one deal which is more commercial than the development.

Merck has been historically, Merck has done more development deals than the commercial deal. So should we think of this as change in direction a little bit? And I mean, how should we think about deals going forward given your balance sheet?

Caroline Litchfield, EVP and CFO, Merck: So business development remains a key priority for our company. There’s so much good science that happens outside of Merck. And our goal is to bring that science into Merck, where the science and value align so that we can bring benefit to patients as we have with WinRevAir, as we hope to with our TL1A asset, as we will do, we hope with the Verona asset. As we look at business development, our starting point is around the science and is this innovation that will address an unmet medical need. We are not bound by what phase of development it is, and we’re not actually bound by value, by price.

What we’re bound by is innovation that will make a difference that in our hands, we can drive growth and we can drive value for the shareholders. So we will continue to progress on a whole suite of opportunities that span multiple phases of development and also will span multiple TAs as we look first and foremost to drive patient benefit, but growth for our business as we look out to the end of this decade and beyond.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. So very active, very helpful. So now moving to guidance. So think I mean, at this point, I mean, how do you think about I mean, like, is it fair to think that China is probably going to be where it is right now and then growth will come from outside of the China markets at this point?

Caroline Litchfield, EVP and CFO, Merck: Yes. So Gardasil in China is an immaterial revenue driver now for the company, less than 1% of revenues. And as we look to 2026 and beyond, we’re not counting on Gardasil in China to drive our growth. We have resources on the ground with our partner to ensure that we are educating people of the continued benefit of HPV protection. But we’re not counting on it for our growth.

Instead for Gardasil, we expect growth will continue to come from further penetration of adolescent segments, especially the male in countries internationally. Growth will come from the mid adult segment, that’s the age group 27 through 45, fifty percent of infections happen at that age. And so we are working on activating that group, although it takes time, and we will see growth from the low and middle income markets. But most importantly, our company’s growth is really going to be fueled by all of these new launches and new products that we’ve got coming through.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Got it. And then I mean there is a lot of headlines from the administration about the vaccines and then the necessity and like I mean so Gardasil, there is this, I mean, there could be potentially a SIP and the chances of less number of doses. So how do you think about that as a possibility? Also, I mean, similarly, like we are hearing something about RSV as well. So like, again, I don’t know, like how do you think about this narrative out there?

Caroline Litchfield, EVP and CFO, Merck: Maybe I’ll have to comment that.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Right. So first of all, let’s take GARDASIL. The single dose GARDASIL story is unfolding. We don’t know. We don’t think that the ACIP is going to consider it in September.

Future, we don’t know. What we do know is that the Food and Drug Administration has been very, very clear about the evidentiary standards that they need to enable single dose vaccination. And those standards are much higher than anything that’s been generated today. They are looking for tissue endpoints, that is hard endpoints like precancerous lesions in both men and women and in both for short term, but also long term durability and no loss of efficacy. So when you think about all of that, all of those requirements, it’s going to be very difficult to be able to get an FDA approved single dose.

There are settings where ACIP may disagree with FDA and choose to make its own recommendations. We don’t think that the evidentiary standard is there for this. There is no reason for this to be done. Now more broadly, we can’t control and we don’t know what ACIP will do. We are very confident that vaccines are critical part of the healthcare infrastructure.

They save lives. They’ve really made a difference over the past fifty, sixty years. And some of our vaccines have been out there for quite some time. Our RSV preventive clozrovimab or Inflansia has been studied extensively. It went through a full FDA review.

There was it all very clear. It went through the ACIP review process. A lot of the data are fully public, and we got all the relevant recommendations. So how the ACIP will think things through in September, we don’t know. But we’re very confident that the efficacy and safety of Inplansia, of Gardasil, of all of our vaccines and frankly the vaccines of all the manufacturers that are part of the immunization schedule.

These vaccines are incredibly well tested. They are incredibly valuable. There is enormous post marketing data. And I think that at the end of the day, professional societies and physicians who work with parents will understand that. And we hope that, that will continue to reinforce vaccines.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Awesome. So Ahmed, my last question, my last question is always the same. Fast forward one year, twenty twenty six September, I hope you are here. I hope I am here. So if I ask you the question one year down the line that what would make you look back and say this was a great year for us?

Caroline Litchfield, EVP and CFO, Merck: So for me, it starts with our pipeline. You will have seen the progress in our pipeline as we really are moving as I open today to a much more diverse set of growth drivers that will make a difference in the world. So seeing positive readouts on all of these assets that we have coming through and seeing excellence in our launches. That’s what it looks like to me with continued augmentation from business development. Again,

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: I look forward to the readouts of a lot of really exciting results. We haven’t talked much about our HIV pipeline, but there’s going be some really important readouts there, same with some of our oncology products. And I look forward to hopefully one year from today where we see that there’s stability in thinking around vaccination schedules and around how the enormous value that these vaccines have brought. And I’m really excited also to we’ll be excited to showcase our new oncology pipeline as well. So lots and lots of stuff going on.

We’re going to have a lot of readouts, and I’m really looking forward to a good year.

Mohit Bansal, Biotech and Pharma Analyst, Wells Fargo: Great. On that high note, thank you very much.

Eliav Barr, Senior Vice President and Chief Medical Officer, Merck: Thank

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