NYSE:MRK Merck & Co., Inc. Q3 2024 Earnings Report $79.33 +1.21 (+1.55%) As of 03:41 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Merck & Co., Inc. EPS ResultsActual EPS$1.57Consensus EPS $1.50Beat/MissBeat by +$0.07One Year Ago EPS$2.13Merck & Co., Inc. Revenue ResultsActual Revenue$16.66 billionExpected Revenue$16.47 billionBeat/MissBeat by +$183.35 millionYoY Revenue Growth+4.40%Merck & Co., Inc. Announcement DetailsQuarterQ3 2024Date10/31/2024TimeAfter Market ClosesConference Call DateThursday, October 31, 2024Conference Call Time9:00AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Merck & Co., Inc. Q3 2024 Earnings Call TranscriptProvided by QuartrOctober 31, 2024 ShareLink copied to clipboard.Key Takeaways Q3 revenues rose 4% (7% ex-FX) driven by strong global uptake of KEYTRUDA, contributions from new launches WinRever and Cabaxiv, and double-digit animal health growth. GARDASIL sales fell 10% year-over-year amid reduced China shipments and still-elevated partner inventories, though sales grew strongly across most other regions. Merck’s Phase 3 pipeline has nearly tripled over three years to more than 20 assets, positioning the company for a five-year launch slate comparable to the past decade with multiple blockbuster-potential programs. The WinRever launch in pulmonary arterial hypertension continues to gain momentum with over 3,700 new patient prescriptions, coverage for ~60% of lives, and first EU patients treated in Germany. Key late-stage clinical milestones include positive Phase III RSV antibody clasrofimab data in infants and an expanded ACIP recommendation for the 21-valent pneumococcal vaccine Cabaxiv in adults 50–64. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallMerck & Co., Inc. Q3 202400:00 / 00:00Speed:1x1.25x1.5x2xThere are 14 speakers on the call. Operator00:00:00Thank you for standing by. Welcome to the Merck and Company Q3 Sales and Earnings Conference Call. At this time, all participants are in a listen only mode until the question and answer session of today's conference. This call is being recorded. If you have any objections, you may disconnect at this time. Operator00:00:21I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin. Speaker 100:00:29Thank you, Shirley, and good morning, everyone. Welcome to Merck's Q3 2024 conference call. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer Caroline Litchfield, Chief Financial Officer and Doctor. Dean Lee, President of Merck Research Labs. Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition related charges, restructuring costs and certain other items that we have excluded these from our non GAAP results. Speaker 100:00:54There is a reconciliation in our press release. I will also remind you that some of the statements that we make today may be considered forward looking statements within the meaning of the Safe Harbor provision of U. S. Private Securities Litigation Reform Act of 1995. Such statements are made based on the current beliefs of Merck's management and are subject to significant risks and uncertainties. Speaker 100:01:13If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward looking statements. Our SEC filings, including Item 1A in the 2023 10 ks identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward looking statements made this morning. Merck undertakes no obligation to publicly update any forward looking statements. During today's call, a slide presentation will accompany our speakers' prepared remarks. These slides, along with the earnings release, today's prepared remarks and our SEC filings are all posted to the Investor Relations section of Merck's website. Speaker 100:01:51With that, I'd like to turn the call over to Rob. Speaker 200:01:54Thanks, Peter. Good morning and thank you for joining today's call. At Merck, we're confronting some of the world's most challenging unmet medical needs with innovative science and differentiated solutions, and we're delivering on our key strategic priorities. The strong progress we're making across our business increases the confidence I have in our ability to achieve long term success and create sustainable value for both patients and shareholders. We're launching important new products to solve for unmet medical needs and which have significant commercial potential. Speaker 200:02:31We're advancing novel clinical programs across a pipeline of diversified therapeutic areas and modalities. And we're adding to our internal research and development efforts through value creating business development transactions. As a result, Merck is moving toward a future with a much more diversified portfolio. Our Phase 3 pipeline has nearly tripled over the past 3 plus years to more than 20 unique assets. This will fuel a substantial set of new medicine and vaccine launches over the next 5 years, in fact, approximately equal to what we've launched over the past 10 years, and we believe the majority have blockbuster plus potential. Speaker 200:03:12We've improved long term visibility and are intensely focused on assuring strong clinical execution across our diversified set of pipeline opportunities and future growth drivers. As always, we remain science driven and patient focused as we work to bring these medicines and vaccines to those who need them most. Turning to our Q3 results, commercial execution is a top priority and we're highly focused on delivering in the near term. The strength of our overall portfolio puts us on track to achieve strong full year growth. For the quarter, revenues increased 4% or 7% on a constant currency basis. Speaker 200:03:53Our results benefited from increased usage of KEYTRUDA globally, contributions from new launches, including WinRiver and Cabaxiv and strong growth in our animal health business. I'm pleased with the launch performance of WinRiver, which is consistent with our high expectations and remain confident in the long term opportunity it represents for patients and for Merck. As anticipated, results also reflect the decline in GARDASIL sales year over year. Notably, however, we achieved strong double digit growth for GARDASIL in almost every major region outside of China. In China, consistent with the expectations we discussed on our prior earnings call, we shipped less to our commercialization partner, Jirfei, and we expect 4th quarter shipments will be at a similar level to the 3rd quarter. Speaker 200:04:46Overall, channel inventories of GARDASIL have decreased, which is directionally encouraging, while inventory at Jirfe remains above historical levels. We are highly focused on this market and are making progress with Jirfe to increase promotional resources and patient education efforts. We expect these efforts to translate to increased patient activation and demand, but as we've said, this will take time. Taking a step back, we're proud of the role that GARDASIL is playing in helping prevent certain HPV related cancers. There's a wide range of long term growth opportunities around the world due to the tremendous remaining need to protect more individuals with less than 10% of the global eligible population vaccinated and meaningful opportunities to improve vaccination completion rates, gender neutral vaccination rates, mid adult coverage and access in low and middle income markets. Speaker 200:05:44This includes in China where there is an attractive long term opportunity given the significant number of females yet to be immunized and the potential approval for males next year. We're highly focused on using our scale and strong capabilities to drive education and awareness of the benefits of HPV vaccination and to reach and protect more patients globally. As such, we remain confident in our goal of achieving greater than $11,000,000,000 of sales by 2,030. Turning to our research efforts, we achieved important clinical and business development milestones this quarter. Starting with our clinical advancements in vaccines, we presented positive Phase IIbIII results for clasrofimab, our investigational monoclonal antibody for the prevention of RSV in infants. Speaker 200:06:36Based on its differentiated profile and robust clinical data, we believe this opportunity is underappreciated. We're moving swiftly to make this important prevention option available in the U. S. During the 'twenty five'twenty six RSV season. In pneumococcal, ACIP voted to expand vaccination recommendations for cat vaxxiv to include adults ages 50 to 64. Speaker 200:07:02We're pleased to bring cat vaxxiv's effectiveness in protecting against invasive pneumococcal disease to this new cohort of patients and this recommendation reinforces our confidence in its blockbuster commercial potential. In oncology, it's been 10 years since Keytruda's first US approval and we remain highly focused on advancing standard of care and maintaining durable leadership in oncology. At ESMO, we presented overall survival and long term follow-up data for KEYTRUDA and data also were shared from our innovative ADCs underscoring our commitment to building a broad and diverse oncology pipeline. In infectious diseases, we shared Phase 2 data from our collaboration with Gilead for the combination of once weekly oral ezlotrevir and Lenacaprevir for HIV treatment and treatment experienced adults. This data represents just a portion of our broad HIV development efforts to further advance the field. Speaker 200:08:05In immunology, we shared positive Phase 2 maintenance data for our investigational TL1A candidate to LISO KEVARD in ulcerative colitis and Crohn's disease that adds to positive prior clinical results. Both our HIV and immunology programs address patient populations with significant remaining unmet need despite available therapies. Our investments in these therapeutic areas reflect our belief in the opportunity to deliver additional value to patients and fortify our sustainable innovation engine for the long term. Regarding business development, we continue to leverage our scientific expertise to identify promising therapeutic targets that can further broaden and fortify our pipeline. This quarter, we acquired a novel investigational bispecific T cell engager from Curon with potential applications in both oncology and immunology, complementing our efforts in each of these areas of high unmet need. Speaker 200:09:04And we closed the acquisitions of I Bio and the Elanco Aqua business. In summary, we remain highly focused on strong commercial and operational execution to enable access to our medicines and vaccines. We're also continuing to make strategic investments in our pipeline that we're confident will lead to important innovations for patients and future growth drivers for our company. I want to again recognize the commitment and efforts of our team across the world. Based on our continued progress, I'm more confident in our longer term future today than I was a year ago and I believe that Merck is even better positioned to deliver value to patients, shareholders and to all of our stakeholders long into the future. Speaker 200:09:47With that, I'll turn the call over to Caroline. Speaker 300:09:51Thank you, Rob. Good morning. As Rob highlighted, we delivered another strong quarter. The fundamentals of our business remain healthy, fueled by robust global demand for our innovative portfolio. This strong performance reinforces the conviction we have in our science led strategy and in our outlook for continued growth. Speaker 300:10:14We remain confident in our ability to consistently deliver strong results in the short term, while we make disciplined investments in leading edge science, which positions us to generate lasting value for patients, customers and shareholders. Now turning to our Q3 results. Total company revenues were $16,700,000,000 an increase of 4% or 7% excluding the impact of foreign exchange. The following revenue comments will be on an ex exchange basis. Our human health business sustained its momentum with sales increasing 8%, primarily driven by oncology. Speaker 300:10:57Our Animal Health business also delivered strong performance with sales growth of 11%. Turning to the performance of our key brands. In oncology, sales of KEYTRUDA grew 21% to $7,400,000,000 Global growth was driven by increased uptake from earlier stage cancers and continued robust global demand from metastatic indications. In the U. S, KEYTRUDA grew across a broad range of tumor types. Speaker 300:11:29In the earlier stage setting, the largest driver was increased use in resectable non small cell lung cancer. KEYTRUDA's market leadership continues to grow as part of a treatment regimen in the perioperative setting, building on its existing leadership position as adjuvant therapy. In metastatic disease, we saw increased uptake in first line advanced urothelial cancer based on KEYNOTE A39. KEYTRUDA plus PADCEF continues its leadership in new patient starts, outpacing platinum chemotherapy based regimens. Outside the U. Speaker 300:12:08S, KEYTRUDA growth was driven by increased uptake in earlier stage cancers, including high risk early stage triple negative breast cancer, as well as continued demand from patients with metastatic disease. Inflation related price increases, consistent with market practice in Argentina, also contributed to growth. Lynparza Alliance revenue grew 13%, driven by increased global demand. LENVIMA Alliance revenue declined 4% due to the timing of shipments last year. WeliRig sales more than doubled to $139,000,000 driven by increased uptake in certain patients with previously treated advanced renal cell carcinoma in the U. Speaker 300:12:57S. In vaccines, GARDASIL sales were $2,300,000,000 a decrease of 10%, driven by a decline in China. In the U. S, sales benefited from CDC purchasing patterns as well as price and demand. Outside the U. Speaker 300:13:17S, sales increased by double digits in almost every region, driven by robust demand. In pneumococcal, VEX NUVAX sales increased 13% to $239,000,000 driven by ongoing launches in international markets. We are also excited by the recent launch of COPVXIV, which is off to an encouraging start. In cardiovascular, the launch of WinRiver continues to gain momentum with global sales of $149,000,000 In the U. S, we have seen steady progress in adding new patients. Speaker 300:13:57During the quarter, approximately 1700 new patients received a prescription, bringing the total number of new patient prescriptions to more than 3,700 since launch. Based on our experience to date, approximately 80% of those patients will receive commercial product. Given this and the approximate 1 month time frame to complete the steps to commence therapy, more than 2,600 new commercial patients have started treatment since launch. We are seeing physicians prescribe WinRiver to more of their patients and new physicians prescribe the product. Through the end of September, nearly 800 physicians have written at least one prescription with most prescribers coming from either large academic centers or larger private practices. Speaker 300:14:51Physicians are continuing to prioritize the sickest patients who have already been receiving multiple PAH therapies. We are also making important progress in enabling access. We have achieved coverage for approximately 60% of lives, nearly doubling the amount from last quarter. Many payers have established coverage policies consistent with the label or STELLAR study criteria. Outside the U. Speaker 300:15:20S, initial feedback from scientific leaders has been positive following the recent EU approval. We are pleased that the first patients in Germany have received a prescription for WinRiver. We look forward to securing reimbursement in other European countries, which typically takes 12 months, as well as launching in other international markets. In summary, we are excited with the continued progress of the launch and look forward to positively impacting more patients with pulmonary arterial hypertension. Our animal health business delivered strong growth with sales increasing 11%. Speaker 300:16:02Companion animal sales grew 17%, driven by uptake from new product launches, including the long acting BRAVEXTA injectable in certain international markets as well as price. Livestock sales grew 7%, reflecting higher demand for poultry and swine products, the inclusion of sales from the recently acquired Aqua portfolio from Elanco, which closed in mid July and price. I will now walk you through the remainder of our P and L, and my comments will be on a non GAAP basis. Gross margin was 80.5%, an increase of 3.5 percentage points, driven by reduced royalty rates for KEYTRUDA and GARDASIL, as well as favorable product mix. Operating expenses increased to $8,500,000,000 including $2,200,000,000 of charges related to the acquisition of I Bio and a promising candidate from Curon. Speaker 300:17:03Excluding these charges, operating expenses grew 9%, reflecting strategic investments in support of our innovative early and late phase pipeline and key growth drivers. Other income was $193,000,000 which includes a payment of $170,000,000 from Daiichi Sankyo related to the collaboration for our T cell engager. Our tax rate of 21.9 percent includes an unfavorable impact from the Ibio and Curon transactions. Taken together, earnings per share were $1.57 Now turning to our 2024 non GAAP guidance. The continued operational strength of our business has enabled us to narrow our full year revenue guidance. Speaker 300:17:56We now expect revenue to be between $63,600,000,000 $64,100,000,000 This guidance range represents strong year over year growth of 6% to 7%, including an approximate 3 percentage point negative impact from foreign exchange using mid October rates. Our gross margin assumption remains approximately 81%. We expect operating expenses to be between $27,800,000,000 $28,300,000,000 which now includes the $750,000,000 one time charge related to the asset acquisition from Curon. As a reminder, our guidance does not assume additional significant potential business development transactions. Other expense is now expected to be approximately $100,000,000 including the benefit of the $170,000,000 payment from Daiichi. Speaker 300:18:57Our full year tax rate is expected to be between 16% 17%, which includes an unfavorable impact related to the Curon transaction. We assume approximately 2,540,000,000 shares outstanding. Taken together, we expect EPS of $7.72 to $7.77 This range includes a negative impact from foreign exchange of approximately $0.30 using mid October rates. Recall, our prior guidance range was $7.94 to $8.04 including the one time charge of $750,000,000 or $0.29 per share related to the asset acquisition from Curon and the $170,000,000 or $0.05 per share benefit from the payment from Daiichi, our prior guidance range would have been $7.70 to $7.80 with a midpoint of $7.75 Therefore, our current guidance midpoint is unchanged. Now turning to capital allocation, where our strategy remains the same. Speaker 300:20:13We will prioritize investments in our business to drive near and long term growth. We will continue to invest in our key growth drivers and expansive pipeline of novel candidates, each of which has significant potential to address important unmet medical needs. We remain committed to our dividend with the goal of continuing to increase it over time. Adding compelling science through business development remains a priority, and we are well positioned to pursue additional value enhancing transactions. We will continue to execute a modest level of share repurchase. Speaker 300:20:54To conclude, as we finish the year, we are confident in the momentum of our business, underpinned by robust global demand for our innovative medicines and vaccines, Our unwavering dedication to leverage compelling science to save and improve the lives of the patients we serve has put us in a position of financial and operational strength. Our commitment to bring forward important innovation will enable us to deliver value to patients, customers and shareholders well into the future. With that, I would now like to turn the call over to Dean. Speaker 400:21:32Thank you, Caroline. We have continued to execute on our strategy of diversifying in oncology and expanding into new therapeutic areas, while also investing in novel modalities and technologies. The 3rd quarter was marked by several important clinical regulatory milestones. I will first cover infectious diseases and oncology and conclude with updates on the broader portfolio. As Rob noted, last week, ACIP voted to update the adult age based pneumococcal vaccination guidelines and recommend the use of Cabaxyp, our 21 valent pneumococcal conjugate vaccine for individuals 50 years and older. Speaker 400:22:16Cabaxyp is specifically designed to cover serotypes responsible for the majority of invasive pneumococcal disease and includes serotypes responsible for approximately 84% of cases of IPD in adults 50 older based on national level CDC data from 2018 to 2022. Building on our company's proud legacy in infectious diseases, detailed findings from a pivotal Phase IIbIII clinical trial evaluating clasrolimab, our investigational respiratory syncytial virus preventative monoclonal antibody for the protection of infants entering their 1st RSV season were presented at ID Week. Clazolizumab administered as a single dose immunization to healthy preterm and full term infants regardless of weight, met all trial endpoints with consistent results through both 5 month and 6 month time points. The incidence of adverse events and serious AEs were comparable between treatment and placebo groups with no treatment or RSV related death. As shown in the summary tables in the data press release, clasrolimab immunization is being studied across mild, moderate and severe RSV disease endpoints. Speaker 400:23:47Importantly, clasroblumab significantly reduced the incidence of RSV, the primary endpoint, and hospitalizations associated with RSV infections through 5 months by more than 84%, the secondary endpoint. It was also observed that clozaromab reduced RSV lower respiratory infections by more than 90% through 5 months, the tertiary endpoint. Positive results were also presented from an interim analysis in a separate Phase III study evaluating the safety and efficacy of clozrobomab versus palizizumab in infants and children at increased risk for severe RSV disease. If approved, clozrobomab will be the first and only immunization designed to provide infants with direct, rapid and durable protection for the full 6 months RSV season with the convenience of one dose regardless of weight or month of birth. Also at ID Week, positive data were presented from the Phase II study of the combination of ezlotrevir and lenacapavir, Gilead's HIV-one capsid inhibitor, as a once weekly oral treatment option for people living with HIV. Speaker 400:25:10The 48 week results build on the positive 24 week data previously presented. These findings reinforce the strength of our HIV pipeline as we evaluate multiple promising candidates in preventative and treatment settings. Next, to oncology. KEYTRUDA continues to raise the bar in treating earlier stages of disease. In the earlier stage setting, KEYTRUDA is the only PD-one or PD L1 to date to receive FDA approvals for 9 indications and is the only one to demonstrate a significant overall survival benefit in 4 earlier stage settings: non small cell lung cancer, renal cell carcinoma, cervical cancer and triple negative breast cancer. Speaker 400:26:03And as Caroline spoke to, we continue to see strong patient impact. KEYTRUDA based regimens have demonstrated positive results across 13 pivotal trials in 8 tumor types. We look forward to building on the data in the earlier stage setting. We recently announced positive top line results for the KEYNOTE-six eighty nine trial, evaluating KEYTRUDA as a perioperative treatment for patients newly diagnosed with Stage III or IVA resected locally advanced head and neck squamous cell carcinoma. The trial met its primary endpoint of event free survival and demonstrated an improvement in major pathological response, a key secondary endpoint. Speaker 400:26:50This is the first positive trial show a statistically significant benefit of neoadjuvant +EDUPENT anti PD-one treatment for newly diagnosed patients with resected, locally advanced head and neck squamous cell carcinoma in 20 years. Results will be submitted to regulatory authorities and, if approved, would mark the 10th indication of a KEYTRUDA based regimen for the treatment of earlier stage cancer. On the regulatory front, we received FDA approval for KEYTRUDA in combination with pemetrexate and platinum chemotherapy for the first line treatment of adult patients with unresectable advanced or metastatic malignant pleural mesothelioma based on results from the KEYNOTE-four eighty three study. This brings the number of distinct FDA approved indications for KEYTRUDA to 41. The European Commission approved 3 KEYTRUDA based regimens, which include, in combination with Pfizer's PACCEV, Anectin-four targeting antibody drug conjugate for the first line treatment of adult patients with unresectable or metastatic urothelial carcinoma based on the KEYNOTE A-thirty nine study. Speaker 400:28:07In combination with carboplatinum and paclitaxel for the first line treatment of primary advanced or recurrent endometrial carcinoma and in combination with chemoradiotherapy for the treatment of FIGO-twenty 14 Stage III to IVA locally advanced cervical cancer in adults who have not received prior definitive therapy based on KEYNOTE-868. KEYTRUDA was also approved by the Japanese Ministry of Health for 3 indications. In combination with Pfizer's, PADCEV, a Nekten-four targeting antibody drug conjugate for the first line treatment of adult patients with radically unresectable urothelial carcinoma based on the KEYNOTE A-thirty nine study. For patients with radically unresectable urothelial carcinoma who are not eligible for any platinum containing chemotherapy based on KEYNOTE 52 as well as in combination with chemotherapy as neoadjuvant treatment, then continued as monotherapy as an adjuvant therapy for patients with non small cell lung cancer based on findings from KEYNOTE-six seventy one. At the European Society For Medical Oncology Congress, 3 presentations for KEYTRUDA were showcased during presidential symposium sessions. Speaker 400:29:31These include overall survival data from the KEYNOTE-five twenty two trial in high risk early stage triple negative breast cancer, overall survival data from the KEYNOTE A18 trial in patients with newly diagnosed high risk locally advanced cervical cancer and 10 year follow-up overall survival data from the KEYNOTE-six trial showing the long term benefit over ipilimumab in patients with advanced melanoma. And finally, in oncology, we continue to advance our increasingly diverse pipeline, including our efforts to evaluate the potential of new combination regimens to improve patient outcomes. Earlier this month, we announced a clinical development collaboration with Exelixis for their investigational tyrosine kinase inhibitor, zanzolitinib, which will be evaluated in combination with KEYTRUDA for the treatment of patients with head and neck squamous cell carcinoma and with Welerig for the treatment of patients with renal cell carcinoma. In collaboration with Daiichi Sankyo, we initiated ID8 Lung02, a Phase III trial evaluating nifinatumab dorixtecan, a B7 H3 directed antibody drug conjugate for the treatment of patients with relapsed small cell lung cancer. We also expanded our agreement to evaluate the combination of IDXD with MK-six thousand and seventy, an investigational delta like Ligand3 targeting T cell engager. Speaker 400:31:07Evidence from clinical studies for each candidate provides strong rationale for evaluating this combination regimen. Next, to our broader portfolio. As Caroline mentioned, we were pleased to receive approval from the European Commission for Winrevir, expanding the reach of this treatment option, which we believe has the potential to transform the treatment journey for patients suffering from pulmonary arterial hypertension. In immunology, 50 week efficacy and safety data for Thule, Soqui, Bark, our investigational humanized monoclonal antibody directed tumor necrosis factor like cytokine 1a from the Phase II ARTEMIS UC and APOLLO CD studies in ulcerative colitis and Crohn's disease were presented at the United European Gastroenterology Week Congress. The results reinforce the potential of Tuliso KeyBART to help patients achieve long term clinical remission. Speaker 400:32:11The Phase III trials continue to actively enroll patients. Finally, in ophthalmology, soon after completing our acquisition of iBio, we initiated the Phase IIbIII Brunella trial for MK3000, an investigational tetravalent tri specific antibody that acts as an agonist of the wingless related integration site signaling pathway being evaluated for the treatment of diabetic macular edema. We are executing on our one pipeline approach, augmenting and complementing our internal programs through business development. Recently, we completed the acquisition of CN201, a novel CD3, CD19 T cell engager now known as MK-ten forty five from Curon Biopharmaceutical. MK-ten forty five has shown to significantly deplete B cell levels with potential applications in B cell malignancies and autoimmune diseases. Speaker 400:33:17As with our previous acquisitions, we plan to seamlessly advance clinical development with rigor and speed. In closing, during the quarter, we saw a regular cadence of late phase pipeline advancements, including regulatory milestones and data readouts. We continue to make progress across therapeutic areas, and I look forward to providing further updates on our programs in 2025. And now, I turn the call back to Peter. Speaker 100:33:48Thank you, Dean. Shirley, we're now ready for Q and A. If the analysts today could limit themselves to one question, it would be appreciated so we can get as many analysts on the call as possible. Thank you very much. Operator00:34:21Our first question comes from Trung Nguyen with UBS. Your line is open. You may ask your question. Speaker 500:34:28Thanks for taking my question. Just on GARDASIL, given the inventory levels remain elevated, you've noted this declining demand. How should we think about dynamics as we head into 2020 5 given that increase in promotional activity, but that's balanced by the inventory work down? Will you take time or do you have any color on when we'll see an inflection to that return in growth? Thank you. Speaker 200:34:55Great. Thanks for the question. Obviously, we're very focused on GARDASIL in China, but maybe just to step back for a second, we continue to be very proud of the contribution that GARDASIL is making for patients and people around the world to really address and hopefully eliminate long term cervical cancer as well as other HPV related cancer. So that important work will continue. And importantly, as we commented in our prepared remarks, while China did decline and I'll speak to China in a second, overall, we saw strong double digit growth in really nearly every other region around the world, which is showing the progress we're making and which is why we continue to have such confidence in the long term potential for this. Speaker 200:35:40But as it relates to China specifically and as we think about 2025, I don't want to give specific guidance because obviously we're still working through our 2025 plan. But what I would say is we do expect to continue to see a decline in shipments into China into 2025. And as we had highlighted before, this is happening a little bit earlier than we originally expected, but we had always expected that over time as we work through the bolus, we would see the female opportunity decline and then hopefully seeing growth come with bringing the male opportunity, which we would expect to see with approval, assuming it comes next year. So that's how we see it progressing. So as we think about 2025, we see China really in the $2,000,000,000 to $3,000,000,000 range as far as an opportunity for 2025 and for the next several years with the opportunity in males really being the growth driver. Speaker 200:36:38And at that level, we would expect for overall Merck that you're going to continue to see based on the portfolio we have solid growth. So I think that's just important to kind of frame where we're seeing things, but understanding we're focused on this, we're bringing our efforts to drive demand and we're going to make progress. We are making progress, but it's going to take some time. Speaker 100:37:00Great. Thanks, Trung. Next question please, Shirley. Operator00:37:03Thank you. Our next question comes from Vamil Divan with Guggenheim Securities. Your line is open. You may ask your question. Speaker 600:37:10Hi, good morning. This is Edward on for Vamil from Guggenheim. Just on WENRIVER, what are you seeing in terms of safety since it's been rolled out commercially? Any sense of how many patients are in the low dose versus the high dose? And then an estimate of what percent of patients need to have their dose reduced or stopped due to the safety issues? Speaker 600:37:31Thank you. Speaker 200:37:33Yes. I'll maybe let Dean start and Speaker 400:37:35jump in. From the safety issue, we haven't had any profound or important signals at all in relationship to the patients that we've been serving. So that has not been an issue to date in the patients that have gotten WENRIVER. But more broadly? Speaker 200:37:54Yes. So just to give you a sense of what we're seeing in the marketplace, as we said in the prepared comments, we are seeing the sickest patients being predominantly about 80% of the patients we have today. So those would be people on triple therapy. And as we're looking at the kits being used, we're still predominantly seeing use of single vials, not double vials, as we're still bringing a lot of people on to therapy. Remember that when a patient starts therapy, they start on a single vial and then they would transition either to maintaining on single or going to double depending on their weight over time. Speaker 200:38:33So we expect to see as we saw with STELLAR that you would end up with about 2 thirds of patients would be on the single vial and about 1 third of patients on the double vial. Right now, that's a little bit more skewed towards single, but we expect it still to get there over time. And importantly, on your broader question, Dean gave one sense about where we see safety. I think the best real world statement around safety, we're seeing very strong adherence and really seeing less discontinuations than we expected. So the anecdotal information we're getting from the marketplace as far as the real world experience, I would say, has said that safety is not an issue. Speaker 100:39:16Great. Shirley, next question please. Operator00:39:19Thank you. Our next question comes from Louise Chen with Cantor. You may ask your question. Speaker 700:39:24Hi. Thanks for taking my question. I wanted to ask you about your outlook for 2025, what are the major puts and takes and when do you plan to give that guidance? Thank you. Speaker 100:39:33Yes, I'll turn it over Speaker 200:39:34to Carolyn for that. Speaker 300:39:35So Louise, we plan to give our guidance with the Q4 earnings as we ordinarily do. But if I give you a sense of the overall pushes and pulls, if I start with 2024, it's been a really strong year for our company. As we've noted, we expect to deliver 6% to 7% growth, while we're investing in and really driving our pipeline and have delivered strong underlying operating margin improvement. As we look to 2025, we expect solid growth for our business. And the key opportunities that we have is the continued impact for KEYTRUDA, especially in earlier stage cancers, but the tumor types we would call out would be early stage non small cell lung cancer. Speaker 300:40:23We've got great opportunity in women's cancers, including early stage triple negative breast, but also endometrial and cervical cancer, and of course bladder cancer is a real opportunity for growth. We are confident where we are with Weligreg and the opportunities there to continue to see strong performance and impact for patients. And of course, we have the recent and upcoming launches that includes WinRiver where we have high expectations for growth. It includes where we expect to get a majority share over time and it also includes the opportunity for the launch of clazorozumab in RSV ahead of the 'twenty five, 'twenty six season. And as we noted, animal health is a strong contributor to growth, and we expect that to continue into next year. Speaker 300:41:19We have a few headwinds. One is the expiration of our agreement with J and J for the immunology products REMICADE and SYMPHONY. And as Rob noted, we do expect sales of GARDASIL in China to decline in 2025 compared with 2024. However, all of that said, we're very confident in the opportunity to drive solid growth for our business in 2025, while we invest fully behind our expansive pipeline, investing the commercial activities to ensure excellence in the marketplace and expect to deliver operating margin expansion. Speaker 100:42:01Thanks, Louise. Next question please. Operator00:42:04Thank you. Our next question comes from Chris Shibutani with Goldman Sachs. Your line is open. You may ask your question. Speaker 800:42:10Thank you very much. The capital allocation opportunity is something that you have been very consistent about providing us updates. Given some of the push flows in the business, in particular vulnerability with Gardasil, I think you have capacity and you have also mentioned interest in certain areas, I would note, with obesity. Can you update us on where you are with your appetite, scale, therapeutic area? Anything that would give us insight into your ability to use that as a lever to help perhaps offset some of this uncertainty tied to Gartisil? Speaker 800:42:40Thank you. Speaker 200:42:41Yes. No, Chris, thanks for the question. Obviously, I feel very good about the business development we've done, including some of the transactions that Dean just highlighted in the prepared remarks, and we're going to continue to look to do more. So while we feel good about where we are and actually as I made a comment in the prepared remarks, we have more Phase 3 assets now than we had with more than tripled it from where we were 3 years ago and with more than 20. So we have a lot there, but we need to add more and we're looking across all therapeutic areas. Speaker 200:43:15Our approach remains where it's always been, which is we start with the science and where we see a scientific opportunity that addresses an unmet need and where we think Merck can strategically play, if we see that align with value, we will act. As it relates to obesity, our goal and strategy there continues to be focusing on the 2nd and third generation opportunities in that space. We've talked in the past thinking more of a focus on oral opportunities and those can be in combination focused and those can be in combination focused on outcomes that go beyond just obesity, but to actually medical outcomes. So we continue to look, but we're going to be disciplined. And if we don't see something where we think it makes sense from a value perspective and a strategy, we won't move. Speaker 200:44:03Beyond that, I would say, you should continue to see us look in areas of oncology, immunology and broader cardiometabolic. All the places where we're playing today are areas where we continue to look for opportunities down the road. From a capacity perspective, just to be clear, we continue to think we have capacity frankly to do pretty much anything of any size, but our focus area continues to be mainly in that $1,000,000,000 to $15,000,000,000 range. Great. Thanks, Chris. Speaker 200:44:28Next question, please. Operator00:44:30Thank you. Our next question comes from Dana Graybosch with Leerink Partners. Your line is open. Speaker 300:44:36Yes. Can you talk a little Speaker 900:44:38bit more about the pneumococcal opportunity? What do you think is the incremental market size from the expansion down to age 50? And is there anything you're looking for in the MMWR language when they publish that recommendation that would drive more or less share to Cabazzi versus the competitors? Speaker 200:44:59Yes, maybe Dean you want to start and we can jump in. Speaker 400:45:01Yes, I mean I think it was interesting to watch the ACIP, they're balancing how to make the best recommendations. And we should just remember we have a 21 valent vaccine that gives 85% adult protection that was very clear and there is a competitor who has a 20 valent that has a 54% adult protection. And I think that was very clear at the ACIP. And I would just remind myself that previously when they thought about doing the 50 to 64 just with the 20 valent there was a decision not to proceed. And I really do think the health economic data and the data that we show for the 21 valent, given it's 85% versus 54% is what drove them to finally move and address a really important need, which is the health equity issues in relationship to a pneumococcal vaccination by lowering it to 50% to 64% and lowering it for everyone. Speaker 400:46:06But in terms of the dynamics in the market. Speaker 300:46:08So in terms of the commercial opportunity we have, given the strength of the data that Dean has just shared, we feel very confident in our opportunity. And to remind in terms of the number of patients in the United States, there's around 120,000,000 people over the age of 50. 60,000,000 of those are in the 50 to 64 age group, which now given the ACIP recommendation provides a tremendous opportunity for us to activate that patient cohort to go and get this vaccine, as well as the group that sit above the age of 65 given the strength of our data. So we are ready, we have supply and we're looking forward to ensuring that we can protect as many people as possible. Speaker 100:46:57Great. Thanks Dana. Next question please Shirley. Operator00:47:02Thank you. Our next question comes from Chris Schott with JPMorgan. You may ask your question. Speaker 1000:47:07Great. Thanks very much. Just another one on GARDASIL. Rob, I believe you said kind of $2,000,000,000 to $3,000,000,000 per year opportunity for China over the next few years. Just a couple of quick ones there. Speaker 1000:47:18First, what does that compare to where China is going to shake out for Merck this year? And is that $2,000,000,000 to $3,000,000,000 number what was reflected in the $11,000,000,000 longer term target? Thanks so much. Speaker 200:47:30Yes. So to give you just a sense of where we are and we don't normally give product level guidance, but are specifics at a quarterly basis, but given the importance and focus on GARDASIL, just to give you a sense of where we were China GARDASIL in the Q3, it's about approximately $500,000,000 in the Q3. And as we said, we would expect to ship about the same amount into the Q4. So you should expect that the Q4 itself would also be in that $500,000,000 range. And so that kind of gives you a sense of where we are. Speaker 200:48:07So as you look forward to 2025, obviously as we think in 2025 and over the next several years, if you're running in that $2,000,000,000 to $3,000,000,000 range, that's why we made the comment that with that and given the other opportunities we see around the world, we remain confident in our ability to get to the $11,000,000,000 by 2,030. So we are contemplating that $2,000,000,000 to $3,000,000,000 over the next several years in China as the contribution that it would make to get us to where we need, understanding also that long term, we do expect to be able to have the potential for growth driven by the mail opportunity in China and then obviously continuing to drive more broadly around the rest of the world. Speaker 100:48:55Great. Thanks, Chris. Next question please. Operator00:48:57Thank you. Our next question comes from Terence Flynn with Morgan Stanley. You may ask your question. Speaker 1100:49:03Great. Thanks so much. Maybe just one question and one clarification. Just on the GARDASIL side, Rob, that's the $2,000,000,000 to $3,000,000,000 includes the mails or it does not include the mails? Sorry, it was a little unclear based on the last response. Speaker 1100:49:18And then obviously, next gen IO remains a big focus for both Merck and the industry. I know Dean you talked a lot about some of the efforts Merck has made on this front. Would just be curious to get your perspective on the PD-one, PD L1 VEGF bispecifics. Obviously there's some data emerging out of China there. Just any thoughts on that data and where that might fit from a competitive landscape perspective or if that's a target Merck has considered at all? Speaker 1100:49:45Thank you. Speaker 200:49:46Yes. So I'll take the first part of that question, Terence. So the answer is yes. The $2,000,000,000 to $3,000,000,000 over the next several years does include mail, but we have the opportunity as you look longer term to drive growth with that opportunity. That was really the point we were trying to make. Speaker 400:50:04In relation to your question in relationship to the vascular endothelial growth factor pathway, it is an important axis. I just there's been a lot of data in that. It's not just the most recent data. Merck has made a substantial investment in that pathway. Our collaborations with Eisai and Exelixis is along that pathway. Speaker 400:50:24It's PD-one, in this case with VEGF RTK inhibitors. Other companies have taken their PD L1 and added to, for example, Avastin. And I would just emphasize, our interest in HIF-two alpha is also related to vascular endothelial growth factor. In relationship to the specific question about SUMMIT, that deep expertise that has developed in that VEGF, I think it's really important for all of us to watch carefully and we are watching carefully the ability to turn PFS into OS. The other issue is that in China, the health system is a little bit different as to how they treat individuals, but also the patients here are also different in terms of their responsiveness to VEGF. Speaker 400:51:07I would also emphasize that the experiment that was done in China is an experiment that we would unable to do, for example, in the United States. We would not be able to compare a new combo against KEYTRUDA monotherapy in the PD L1, 1 through 49 percent PD L1. That's something we would not be able to do because in that situation, the comparator is not monotherapy, but it's 189 KEYNOTE-one hundred and eighty nine. But broadly speaking, combos will be important, combos to deepen it, to go earlier stage will be important. I think vascular endothelial growth factor pathways are important. Speaker 400:51:50INT will be important. RAS will be important. ADCs will be important. And all of those readouts will come some before 2028, some around 2028 and some will happen after 2028. Operator00:52:05Our next question comes from Carter Gould with Barclays. Your line is open. Speaker 600:52:11Good morning. Thanks for taking the question. Appreciate all the Gardasil color. Maybe on WinRivera, can you comment on the impact of stocking in the quarter? And I'm trying to also kind of square, Rob, some of your comments around sort of the efforts to work through the sickest patients, kind of maybe help frame for us kind of how far you're along sort of that initial bolus of patients, those later line patients within the STELLAR label? Speaker 600:52:36Thank you. Speaker 300:52:38So, Carter, in the quarter, over 80% of the revenue is to support demand. And so a very small level of inventory build. And we'd expect inventory dollars to build over time given the growth that we expect in the product. In terms of the patients that are being prescribed the product, as Rob noted, a large portion, it's actually about 80% of the patients are on background triple therapy or in combination with the prostacyclin. So we're making really good progress in that segment. Speaker 300:53:13At the same time, a large number of the physicians have prescribed WinRevir now to patients that are not on a prostacyclin background therapy, which gives us confidence for the ability to move to the patients who are more dual therapy over time. And we remain confident in the opportunity in line with our high expectations to benefit patients and to drive significant commercial benefit for our company. Speaker 100:53:41Thanks Carter. Next question please Shirley. Operator00:53:44Thank you. Our next question comes from Umer Raffat with Evercore ISI. You may ask your question. Speaker 400:53:51Hi, guys. Thanks for taking my question. I have I wanted to focus on Gardasil just a little more. That was very helpful commentary, Rob. You mentioned $500,000,000 in sales in 3Q and 4Q to China, which obviously is $2,000,000,000 run rate. Speaker 400:54:03My question is, was that shipping to demand? Because if so, what that means is inventory sitting at your face is still something that would need to be worked down in 2025, as well as possible 9 Vaillant generic entry sorry, 9 Vaillant local competition entry in 2025 as well. How do you factor those two dynamics into thinking about the 2025 number of $2,000,000,000 to $3,000,000,000 in China? Thank you. Speaker 200:54:26Yes. So if you look at what's happening in the overall marketplace and just to give you a sense, from an inventory perspective, maybe starting there, if you look at overall inventory levels in China, they did come down and that's taking into account and this is for GARDASIL. GARDASIL at JERFE, which frankly remains high and grew slightly, but that was more than offset by reductions in the CDCs and the points of vaccination. So that's a good sign that we're seeing overall inventories coming down, which also would point to the fact that as we're looking at demand, which we're seeing stabilize, we think we're at a position now where as we're starting to talk about what we're shipping, our expectation is we are shipping below demand. So we have been working very constructively with Jirfe to think about this both as what we're doing in this year as frankly as well as we're continuing to have constructive dialogue around 2025. Speaker 200:55:26Our intention would be to balance the need to get product into the marketplace to meet the demand, at the same time allowing for Jirpay to bring down their inventories over time. So we're very thoughtful in how we're thinking about it and we've done that taking into account our expectations of both the female competitive launch that could come next year, but also the opportunity that a male approval early next year could allow us to have. So all of those factors are in as we think about that $2,000,000,000 to $3,000,000,000 number. Speaker 100:56:01Great. Thanks, Umer. Perhaps two more questions. Operator00:56:05Thank you. Our next question comes from Steve Scala with TD Speaker 1200:56:10Cowen. All things considered, is it still possible to see global GARDASIL growth in 2025? And Rob, you noted at the start that recovery in China will take time, but it sounds like you have good visibility now because you're giving this $2,000,000,000 to $3,000,000,000 guidance for GARDASIL in China. So I'm unclear what it is that we're waiting for? Thank you. Speaker 200:56:34Well, what we're talking about taking time is basically to work down the inventory and to then build demand over time so that we can continue to drive that market. What we're giving you is kind of what we see as the baseline of China. Our hope is that we'll do better and we're going to put the work in to do better and to continue to drive long term. I think that what I'm trying to make sure everyone hears is this isn't going to be solved next quarter. It's going to take us through probably 2025, but we're thoughtful on how we're doing it. Speaker 200:57:07We're working with Jirfe in a constructive manner to do it. So those are the elements are going to take time because we need to build the demand. We know the opportunity is there with 120 1,000,000 females still out there to go after and with potentially 200,000,000 males with the male opportunity. We have to activate that demand to make sure we can drive that business. So that's really what we're focusing on. Speaker 200:57:31As far as it relates to Gardasil for 2025, I don't think we really want to get into giving product line guidance right now. We were very specific to China because of the concerns that were there. And I wanted to make sure you know that we see solid overall growth for Merck because that's important to have context, but beyond that we normally wouldn't be giving guidance at this point Speaker 300:57:50in time. Speaker 100:57:51Great. Thanks, Steve. Last question please, Shirley. Operator00:57:55Thank you. And that comes from Mohit Bansal with Wells Fargo. You may ask your question. Speaker 400:58:01Great. Thank you very much for taking my question. Speaker 1300:58:04My question is regarding V-nine forty in lung cancer. I see that you have started Phase 3 trials. Could you please help us understand what kind of data you have seen in earlier stages, which makes you move into Phase 3? I don't think we have seen a lot of data from our side here. Thank you. Speaker 400:58:24Yes. So this is Dean. I would just emphasize, and I was trying to sort of lay the foundation during the prepared remarks. I would just recognize that in earlier stage, we have 9 approvals and 4 with OS. That basis allows us to drive curative setting combos in a way that is advantageous for the patient and also often uniquely ability for us. Speaker 400:58:50And the specific study that you're, I think, referring to is the announcement with our partners Moderna of going in lung cancer. Specifically, that one is built around KEYNOTE-six seventy one, which has an OS benefit and is approved. But the interesting thing is in the sort of neoadjuvant or perioperative followed by surgery, there becomes a situation where we can discern who has a pathological complete response and who doesn't have a pathological complete response. And that patient population that does not have a pathological complete response, there is the need and our ability to provide other combinations in that space And that is where we're driving the INT in that situation in lung cancer. Speaker 100:59:42Great. Thanks, Mohit, and thank you all for your good questions today. And as always, we're available for follow ups. Please reach out when you want. Take care. Speaker 100:59:50Thank you very much. Operator00:59:52Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your line at this time.Read morePowered by Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Merck & Co., Inc. Earnings Headlines5 Regular Payout High-Yield VIG Dividends to Outpace the FedJuly 30 at 3:11 PM | 247wallst.comStock Traders Purchase High Volume of Merck & Co., Inc. 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There are 14 speakers on the call. Operator00:00:00Thank you for standing by. Welcome to the Merck and Company Q3 Sales and Earnings Conference Call. At this time, all participants are in a listen only mode until the question and answer session of today's conference. This call is being recorded. If you have any objections, you may disconnect at this time. Operator00:00:21I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin. Speaker 100:00:29Thank you, Shirley, and good morning, everyone. Welcome to Merck's Q3 2024 conference call. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer Caroline Litchfield, Chief Financial Officer and Doctor. Dean Lee, President of Merck Research Labs. Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition related charges, restructuring costs and certain other items that we have excluded these from our non GAAP results. Speaker 100:00:54There is a reconciliation in our press release. I will also remind you that some of the statements that we make today may be considered forward looking statements within the meaning of the Safe Harbor provision of U. S. Private Securities Litigation Reform Act of 1995. Such statements are made based on the current beliefs of Merck's management and are subject to significant risks and uncertainties. Speaker 100:01:13If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward looking statements. Our SEC filings, including Item 1A in the 2023 10 ks identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward looking statements made this morning. Merck undertakes no obligation to publicly update any forward looking statements. During today's call, a slide presentation will accompany our speakers' prepared remarks. These slides, along with the earnings release, today's prepared remarks and our SEC filings are all posted to the Investor Relations section of Merck's website. Speaker 100:01:51With that, I'd like to turn the call over to Rob. Speaker 200:01:54Thanks, Peter. Good morning and thank you for joining today's call. At Merck, we're confronting some of the world's most challenging unmet medical needs with innovative science and differentiated solutions, and we're delivering on our key strategic priorities. The strong progress we're making across our business increases the confidence I have in our ability to achieve long term success and create sustainable value for both patients and shareholders. We're launching important new products to solve for unmet medical needs and which have significant commercial potential. Speaker 200:02:31We're advancing novel clinical programs across a pipeline of diversified therapeutic areas and modalities. And we're adding to our internal research and development efforts through value creating business development transactions. As a result, Merck is moving toward a future with a much more diversified portfolio. Our Phase 3 pipeline has nearly tripled over the past 3 plus years to more than 20 unique assets. This will fuel a substantial set of new medicine and vaccine launches over the next 5 years, in fact, approximately equal to what we've launched over the past 10 years, and we believe the majority have blockbuster plus potential. Speaker 200:03:12We've improved long term visibility and are intensely focused on assuring strong clinical execution across our diversified set of pipeline opportunities and future growth drivers. As always, we remain science driven and patient focused as we work to bring these medicines and vaccines to those who need them most. Turning to our Q3 results, commercial execution is a top priority and we're highly focused on delivering in the near term. The strength of our overall portfolio puts us on track to achieve strong full year growth. For the quarter, revenues increased 4% or 7% on a constant currency basis. Speaker 200:03:53Our results benefited from increased usage of KEYTRUDA globally, contributions from new launches, including WinRiver and Cabaxiv and strong growth in our animal health business. I'm pleased with the launch performance of WinRiver, which is consistent with our high expectations and remain confident in the long term opportunity it represents for patients and for Merck. As anticipated, results also reflect the decline in GARDASIL sales year over year. Notably, however, we achieved strong double digit growth for GARDASIL in almost every major region outside of China. In China, consistent with the expectations we discussed on our prior earnings call, we shipped less to our commercialization partner, Jirfei, and we expect 4th quarter shipments will be at a similar level to the 3rd quarter. Speaker 200:04:46Overall, channel inventories of GARDASIL have decreased, which is directionally encouraging, while inventory at Jirfe remains above historical levels. We are highly focused on this market and are making progress with Jirfe to increase promotional resources and patient education efforts. We expect these efforts to translate to increased patient activation and demand, but as we've said, this will take time. Taking a step back, we're proud of the role that GARDASIL is playing in helping prevent certain HPV related cancers. There's a wide range of long term growth opportunities around the world due to the tremendous remaining need to protect more individuals with less than 10% of the global eligible population vaccinated and meaningful opportunities to improve vaccination completion rates, gender neutral vaccination rates, mid adult coverage and access in low and middle income markets. Speaker 200:05:44This includes in China where there is an attractive long term opportunity given the significant number of females yet to be immunized and the potential approval for males next year. We're highly focused on using our scale and strong capabilities to drive education and awareness of the benefits of HPV vaccination and to reach and protect more patients globally. As such, we remain confident in our goal of achieving greater than $11,000,000,000 of sales by 2,030. Turning to our research efforts, we achieved important clinical and business development milestones this quarter. Starting with our clinical advancements in vaccines, we presented positive Phase IIbIII results for clasrofimab, our investigational monoclonal antibody for the prevention of RSV in infants. Speaker 200:06:36Based on its differentiated profile and robust clinical data, we believe this opportunity is underappreciated. We're moving swiftly to make this important prevention option available in the U. S. During the 'twenty five'twenty six RSV season. In pneumococcal, ACIP voted to expand vaccination recommendations for cat vaxxiv to include adults ages 50 to 64. Speaker 200:07:02We're pleased to bring cat vaxxiv's effectiveness in protecting against invasive pneumococcal disease to this new cohort of patients and this recommendation reinforces our confidence in its blockbuster commercial potential. In oncology, it's been 10 years since Keytruda's first US approval and we remain highly focused on advancing standard of care and maintaining durable leadership in oncology. At ESMO, we presented overall survival and long term follow-up data for KEYTRUDA and data also were shared from our innovative ADCs underscoring our commitment to building a broad and diverse oncology pipeline. In infectious diseases, we shared Phase 2 data from our collaboration with Gilead for the combination of once weekly oral ezlotrevir and Lenacaprevir for HIV treatment and treatment experienced adults. This data represents just a portion of our broad HIV development efforts to further advance the field. Speaker 200:08:05In immunology, we shared positive Phase 2 maintenance data for our investigational TL1A candidate to LISO KEVARD in ulcerative colitis and Crohn's disease that adds to positive prior clinical results. Both our HIV and immunology programs address patient populations with significant remaining unmet need despite available therapies. Our investments in these therapeutic areas reflect our belief in the opportunity to deliver additional value to patients and fortify our sustainable innovation engine for the long term. Regarding business development, we continue to leverage our scientific expertise to identify promising therapeutic targets that can further broaden and fortify our pipeline. This quarter, we acquired a novel investigational bispecific T cell engager from Curon with potential applications in both oncology and immunology, complementing our efforts in each of these areas of high unmet need. Speaker 200:09:04And we closed the acquisitions of I Bio and the Elanco Aqua business. In summary, we remain highly focused on strong commercial and operational execution to enable access to our medicines and vaccines. We're also continuing to make strategic investments in our pipeline that we're confident will lead to important innovations for patients and future growth drivers for our company. I want to again recognize the commitment and efforts of our team across the world. Based on our continued progress, I'm more confident in our longer term future today than I was a year ago and I believe that Merck is even better positioned to deliver value to patients, shareholders and to all of our stakeholders long into the future. Speaker 200:09:47With that, I'll turn the call over to Caroline. Speaker 300:09:51Thank you, Rob. Good morning. As Rob highlighted, we delivered another strong quarter. The fundamentals of our business remain healthy, fueled by robust global demand for our innovative portfolio. This strong performance reinforces the conviction we have in our science led strategy and in our outlook for continued growth. Speaker 300:10:14We remain confident in our ability to consistently deliver strong results in the short term, while we make disciplined investments in leading edge science, which positions us to generate lasting value for patients, customers and shareholders. Now turning to our Q3 results. Total company revenues were $16,700,000,000 an increase of 4% or 7% excluding the impact of foreign exchange. The following revenue comments will be on an ex exchange basis. Our human health business sustained its momentum with sales increasing 8%, primarily driven by oncology. Speaker 300:10:57Our Animal Health business also delivered strong performance with sales growth of 11%. Turning to the performance of our key brands. In oncology, sales of KEYTRUDA grew 21% to $7,400,000,000 Global growth was driven by increased uptake from earlier stage cancers and continued robust global demand from metastatic indications. In the U. S, KEYTRUDA grew across a broad range of tumor types. Speaker 300:11:29In the earlier stage setting, the largest driver was increased use in resectable non small cell lung cancer. KEYTRUDA's market leadership continues to grow as part of a treatment regimen in the perioperative setting, building on its existing leadership position as adjuvant therapy. In metastatic disease, we saw increased uptake in first line advanced urothelial cancer based on KEYNOTE A39. KEYTRUDA plus PADCEF continues its leadership in new patient starts, outpacing platinum chemotherapy based regimens. Outside the U. Speaker 300:12:08S, KEYTRUDA growth was driven by increased uptake in earlier stage cancers, including high risk early stage triple negative breast cancer, as well as continued demand from patients with metastatic disease. Inflation related price increases, consistent with market practice in Argentina, also contributed to growth. Lynparza Alliance revenue grew 13%, driven by increased global demand. LENVIMA Alliance revenue declined 4% due to the timing of shipments last year. WeliRig sales more than doubled to $139,000,000 driven by increased uptake in certain patients with previously treated advanced renal cell carcinoma in the U. Speaker 300:12:57S. In vaccines, GARDASIL sales were $2,300,000,000 a decrease of 10%, driven by a decline in China. In the U. S, sales benefited from CDC purchasing patterns as well as price and demand. Outside the U. Speaker 300:13:17S, sales increased by double digits in almost every region, driven by robust demand. In pneumococcal, VEX NUVAX sales increased 13% to $239,000,000 driven by ongoing launches in international markets. We are also excited by the recent launch of COPVXIV, which is off to an encouraging start. In cardiovascular, the launch of WinRiver continues to gain momentum with global sales of $149,000,000 In the U. S, we have seen steady progress in adding new patients. Speaker 300:13:57During the quarter, approximately 1700 new patients received a prescription, bringing the total number of new patient prescriptions to more than 3,700 since launch. Based on our experience to date, approximately 80% of those patients will receive commercial product. Given this and the approximate 1 month time frame to complete the steps to commence therapy, more than 2,600 new commercial patients have started treatment since launch. We are seeing physicians prescribe WinRiver to more of their patients and new physicians prescribe the product. Through the end of September, nearly 800 physicians have written at least one prescription with most prescribers coming from either large academic centers or larger private practices. Speaker 300:14:51Physicians are continuing to prioritize the sickest patients who have already been receiving multiple PAH therapies. We are also making important progress in enabling access. We have achieved coverage for approximately 60% of lives, nearly doubling the amount from last quarter. Many payers have established coverage policies consistent with the label or STELLAR study criteria. Outside the U. Speaker 300:15:20S, initial feedback from scientific leaders has been positive following the recent EU approval. We are pleased that the first patients in Germany have received a prescription for WinRiver. We look forward to securing reimbursement in other European countries, which typically takes 12 months, as well as launching in other international markets. In summary, we are excited with the continued progress of the launch and look forward to positively impacting more patients with pulmonary arterial hypertension. Our animal health business delivered strong growth with sales increasing 11%. Speaker 300:16:02Companion animal sales grew 17%, driven by uptake from new product launches, including the long acting BRAVEXTA injectable in certain international markets as well as price. Livestock sales grew 7%, reflecting higher demand for poultry and swine products, the inclusion of sales from the recently acquired Aqua portfolio from Elanco, which closed in mid July and price. I will now walk you through the remainder of our P and L, and my comments will be on a non GAAP basis. Gross margin was 80.5%, an increase of 3.5 percentage points, driven by reduced royalty rates for KEYTRUDA and GARDASIL, as well as favorable product mix. Operating expenses increased to $8,500,000,000 including $2,200,000,000 of charges related to the acquisition of I Bio and a promising candidate from Curon. Speaker 300:17:03Excluding these charges, operating expenses grew 9%, reflecting strategic investments in support of our innovative early and late phase pipeline and key growth drivers. Other income was $193,000,000 which includes a payment of $170,000,000 from Daiichi Sankyo related to the collaboration for our T cell engager. Our tax rate of 21.9 percent includes an unfavorable impact from the Ibio and Curon transactions. Taken together, earnings per share were $1.57 Now turning to our 2024 non GAAP guidance. The continued operational strength of our business has enabled us to narrow our full year revenue guidance. Speaker 300:17:56We now expect revenue to be between $63,600,000,000 $64,100,000,000 This guidance range represents strong year over year growth of 6% to 7%, including an approximate 3 percentage point negative impact from foreign exchange using mid October rates. Our gross margin assumption remains approximately 81%. We expect operating expenses to be between $27,800,000,000 $28,300,000,000 which now includes the $750,000,000 one time charge related to the asset acquisition from Curon. As a reminder, our guidance does not assume additional significant potential business development transactions. Other expense is now expected to be approximately $100,000,000 including the benefit of the $170,000,000 payment from Daiichi. Speaker 300:18:57Our full year tax rate is expected to be between 16% 17%, which includes an unfavorable impact related to the Curon transaction. We assume approximately 2,540,000,000 shares outstanding. Taken together, we expect EPS of $7.72 to $7.77 This range includes a negative impact from foreign exchange of approximately $0.30 using mid October rates. Recall, our prior guidance range was $7.94 to $8.04 including the one time charge of $750,000,000 or $0.29 per share related to the asset acquisition from Curon and the $170,000,000 or $0.05 per share benefit from the payment from Daiichi, our prior guidance range would have been $7.70 to $7.80 with a midpoint of $7.75 Therefore, our current guidance midpoint is unchanged. Now turning to capital allocation, where our strategy remains the same. Speaker 300:20:13We will prioritize investments in our business to drive near and long term growth. We will continue to invest in our key growth drivers and expansive pipeline of novel candidates, each of which has significant potential to address important unmet medical needs. We remain committed to our dividend with the goal of continuing to increase it over time. Adding compelling science through business development remains a priority, and we are well positioned to pursue additional value enhancing transactions. We will continue to execute a modest level of share repurchase. Speaker 300:20:54To conclude, as we finish the year, we are confident in the momentum of our business, underpinned by robust global demand for our innovative medicines and vaccines, Our unwavering dedication to leverage compelling science to save and improve the lives of the patients we serve has put us in a position of financial and operational strength. Our commitment to bring forward important innovation will enable us to deliver value to patients, customers and shareholders well into the future. With that, I would now like to turn the call over to Dean. Speaker 400:21:32Thank you, Caroline. We have continued to execute on our strategy of diversifying in oncology and expanding into new therapeutic areas, while also investing in novel modalities and technologies. The 3rd quarter was marked by several important clinical regulatory milestones. I will first cover infectious diseases and oncology and conclude with updates on the broader portfolio. As Rob noted, last week, ACIP voted to update the adult age based pneumococcal vaccination guidelines and recommend the use of Cabaxyp, our 21 valent pneumococcal conjugate vaccine for individuals 50 years and older. Speaker 400:22:16Cabaxyp is specifically designed to cover serotypes responsible for the majority of invasive pneumococcal disease and includes serotypes responsible for approximately 84% of cases of IPD in adults 50 older based on national level CDC data from 2018 to 2022. Building on our company's proud legacy in infectious diseases, detailed findings from a pivotal Phase IIbIII clinical trial evaluating clasrolimab, our investigational respiratory syncytial virus preventative monoclonal antibody for the protection of infants entering their 1st RSV season were presented at ID Week. Clazolizumab administered as a single dose immunization to healthy preterm and full term infants regardless of weight, met all trial endpoints with consistent results through both 5 month and 6 month time points. The incidence of adverse events and serious AEs were comparable between treatment and placebo groups with no treatment or RSV related death. As shown in the summary tables in the data press release, clasrolimab immunization is being studied across mild, moderate and severe RSV disease endpoints. Speaker 400:23:47Importantly, clasroblumab significantly reduced the incidence of RSV, the primary endpoint, and hospitalizations associated with RSV infections through 5 months by more than 84%, the secondary endpoint. It was also observed that clozaromab reduced RSV lower respiratory infections by more than 90% through 5 months, the tertiary endpoint. Positive results were also presented from an interim analysis in a separate Phase III study evaluating the safety and efficacy of clozrobomab versus palizizumab in infants and children at increased risk for severe RSV disease. If approved, clozrobomab will be the first and only immunization designed to provide infants with direct, rapid and durable protection for the full 6 months RSV season with the convenience of one dose regardless of weight or month of birth. Also at ID Week, positive data were presented from the Phase II study of the combination of ezlotrevir and lenacapavir, Gilead's HIV-one capsid inhibitor, as a once weekly oral treatment option for people living with HIV. Speaker 400:25:10The 48 week results build on the positive 24 week data previously presented. These findings reinforce the strength of our HIV pipeline as we evaluate multiple promising candidates in preventative and treatment settings. Next, to oncology. KEYTRUDA continues to raise the bar in treating earlier stages of disease. In the earlier stage setting, KEYTRUDA is the only PD-one or PD L1 to date to receive FDA approvals for 9 indications and is the only one to demonstrate a significant overall survival benefit in 4 earlier stage settings: non small cell lung cancer, renal cell carcinoma, cervical cancer and triple negative breast cancer. Speaker 400:26:03And as Caroline spoke to, we continue to see strong patient impact. KEYTRUDA based regimens have demonstrated positive results across 13 pivotal trials in 8 tumor types. We look forward to building on the data in the earlier stage setting. We recently announced positive top line results for the KEYNOTE-six eighty nine trial, evaluating KEYTRUDA as a perioperative treatment for patients newly diagnosed with Stage III or IVA resected locally advanced head and neck squamous cell carcinoma. The trial met its primary endpoint of event free survival and demonstrated an improvement in major pathological response, a key secondary endpoint. Speaker 400:26:50This is the first positive trial show a statistically significant benefit of neoadjuvant +EDUPENT anti PD-one treatment for newly diagnosed patients with resected, locally advanced head and neck squamous cell carcinoma in 20 years. Results will be submitted to regulatory authorities and, if approved, would mark the 10th indication of a KEYTRUDA based regimen for the treatment of earlier stage cancer. On the regulatory front, we received FDA approval for KEYTRUDA in combination with pemetrexate and platinum chemotherapy for the first line treatment of adult patients with unresectable advanced or metastatic malignant pleural mesothelioma based on results from the KEYNOTE-four eighty three study. This brings the number of distinct FDA approved indications for KEYTRUDA to 41. The European Commission approved 3 KEYTRUDA based regimens, which include, in combination with Pfizer's PACCEV, Anectin-four targeting antibody drug conjugate for the first line treatment of adult patients with unresectable or metastatic urothelial carcinoma based on the KEYNOTE A-thirty nine study. Speaker 400:28:07In combination with carboplatinum and paclitaxel for the first line treatment of primary advanced or recurrent endometrial carcinoma and in combination with chemoradiotherapy for the treatment of FIGO-twenty 14 Stage III to IVA locally advanced cervical cancer in adults who have not received prior definitive therapy based on KEYNOTE-868. KEYTRUDA was also approved by the Japanese Ministry of Health for 3 indications. In combination with Pfizer's, PADCEV, a Nekten-four targeting antibody drug conjugate for the first line treatment of adult patients with radically unresectable urothelial carcinoma based on the KEYNOTE A-thirty nine study. For patients with radically unresectable urothelial carcinoma who are not eligible for any platinum containing chemotherapy based on KEYNOTE 52 as well as in combination with chemotherapy as neoadjuvant treatment, then continued as monotherapy as an adjuvant therapy for patients with non small cell lung cancer based on findings from KEYNOTE-six seventy one. At the European Society For Medical Oncology Congress, 3 presentations for KEYTRUDA were showcased during presidential symposium sessions. Speaker 400:29:31These include overall survival data from the KEYNOTE-five twenty two trial in high risk early stage triple negative breast cancer, overall survival data from the KEYNOTE A18 trial in patients with newly diagnosed high risk locally advanced cervical cancer and 10 year follow-up overall survival data from the KEYNOTE-six trial showing the long term benefit over ipilimumab in patients with advanced melanoma. And finally, in oncology, we continue to advance our increasingly diverse pipeline, including our efforts to evaluate the potential of new combination regimens to improve patient outcomes. Earlier this month, we announced a clinical development collaboration with Exelixis for their investigational tyrosine kinase inhibitor, zanzolitinib, which will be evaluated in combination with KEYTRUDA for the treatment of patients with head and neck squamous cell carcinoma and with Welerig for the treatment of patients with renal cell carcinoma. In collaboration with Daiichi Sankyo, we initiated ID8 Lung02, a Phase III trial evaluating nifinatumab dorixtecan, a B7 H3 directed antibody drug conjugate for the treatment of patients with relapsed small cell lung cancer. We also expanded our agreement to evaluate the combination of IDXD with MK-six thousand and seventy, an investigational delta like Ligand3 targeting T cell engager. Speaker 400:31:07Evidence from clinical studies for each candidate provides strong rationale for evaluating this combination regimen. Next, to our broader portfolio. As Caroline mentioned, we were pleased to receive approval from the European Commission for Winrevir, expanding the reach of this treatment option, which we believe has the potential to transform the treatment journey for patients suffering from pulmonary arterial hypertension. In immunology, 50 week efficacy and safety data for Thule, Soqui, Bark, our investigational humanized monoclonal antibody directed tumor necrosis factor like cytokine 1a from the Phase II ARTEMIS UC and APOLLO CD studies in ulcerative colitis and Crohn's disease were presented at the United European Gastroenterology Week Congress. The results reinforce the potential of Tuliso KeyBART to help patients achieve long term clinical remission. Speaker 400:32:11The Phase III trials continue to actively enroll patients. Finally, in ophthalmology, soon after completing our acquisition of iBio, we initiated the Phase IIbIII Brunella trial for MK3000, an investigational tetravalent tri specific antibody that acts as an agonist of the wingless related integration site signaling pathway being evaluated for the treatment of diabetic macular edema. We are executing on our one pipeline approach, augmenting and complementing our internal programs through business development. Recently, we completed the acquisition of CN201, a novel CD3, CD19 T cell engager now known as MK-ten forty five from Curon Biopharmaceutical. MK-ten forty five has shown to significantly deplete B cell levels with potential applications in B cell malignancies and autoimmune diseases. Speaker 400:33:17As with our previous acquisitions, we plan to seamlessly advance clinical development with rigor and speed. In closing, during the quarter, we saw a regular cadence of late phase pipeline advancements, including regulatory milestones and data readouts. We continue to make progress across therapeutic areas, and I look forward to providing further updates on our programs in 2025. And now, I turn the call back to Peter. Speaker 100:33:48Thank you, Dean. Shirley, we're now ready for Q and A. If the analysts today could limit themselves to one question, it would be appreciated so we can get as many analysts on the call as possible. Thank you very much. Operator00:34:21Our first question comes from Trung Nguyen with UBS. Your line is open. You may ask your question. Speaker 500:34:28Thanks for taking my question. Just on GARDASIL, given the inventory levels remain elevated, you've noted this declining demand. How should we think about dynamics as we head into 2020 5 given that increase in promotional activity, but that's balanced by the inventory work down? Will you take time or do you have any color on when we'll see an inflection to that return in growth? Thank you. Speaker 200:34:55Great. Thanks for the question. Obviously, we're very focused on GARDASIL in China, but maybe just to step back for a second, we continue to be very proud of the contribution that GARDASIL is making for patients and people around the world to really address and hopefully eliminate long term cervical cancer as well as other HPV related cancer. So that important work will continue. And importantly, as we commented in our prepared remarks, while China did decline and I'll speak to China in a second, overall, we saw strong double digit growth in really nearly every other region around the world, which is showing the progress we're making and which is why we continue to have such confidence in the long term potential for this. Speaker 200:35:40But as it relates to China specifically and as we think about 2025, I don't want to give specific guidance because obviously we're still working through our 2025 plan. But what I would say is we do expect to continue to see a decline in shipments into China into 2025. And as we had highlighted before, this is happening a little bit earlier than we originally expected, but we had always expected that over time as we work through the bolus, we would see the female opportunity decline and then hopefully seeing growth come with bringing the male opportunity, which we would expect to see with approval, assuming it comes next year. So that's how we see it progressing. So as we think about 2025, we see China really in the $2,000,000,000 to $3,000,000,000 range as far as an opportunity for 2025 and for the next several years with the opportunity in males really being the growth driver. Speaker 200:36:38And at that level, we would expect for overall Merck that you're going to continue to see based on the portfolio we have solid growth. So I think that's just important to kind of frame where we're seeing things, but understanding we're focused on this, we're bringing our efforts to drive demand and we're going to make progress. We are making progress, but it's going to take some time. Speaker 100:37:00Great. Thanks, Trung. Next question please, Shirley. Operator00:37:03Thank you. Our next question comes from Vamil Divan with Guggenheim Securities. Your line is open. You may ask your question. Speaker 600:37:10Hi, good morning. This is Edward on for Vamil from Guggenheim. Just on WENRIVER, what are you seeing in terms of safety since it's been rolled out commercially? Any sense of how many patients are in the low dose versus the high dose? And then an estimate of what percent of patients need to have their dose reduced or stopped due to the safety issues? Speaker 600:37:31Thank you. Speaker 200:37:33Yes. I'll maybe let Dean start and Speaker 400:37:35jump in. From the safety issue, we haven't had any profound or important signals at all in relationship to the patients that we've been serving. So that has not been an issue to date in the patients that have gotten WENRIVER. But more broadly? Speaker 200:37:54Yes. So just to give you a sense of what we're seeing in the marketplace, as we said in the prepared comments, we are seeing the sickest patients being predominantly about 80% of the patients we have today. So those would be people on triple therapy. And as we're looking at the kits being used, we're still predominantly seeing use of single vials, not double vials, as we're still bringing a lot of people on to therapy. Remember that when a patient starts therapy, they start on a single vial and then they would transition either to maintaining on single or going to double depending on their weight over time. Speaker 200:38:33So we expect to see as we saw with STELLAR that you would end up with about 2 thirds of patients would be on the single vial and about 1 third of patients on the double vial. Right now, that's a little bit more skewed towards single, but we expect it still to get there over time. And importantly, on your broader question, Dean gave one sense about where we see safety. I think the best real world statement around safety, we're seeing very strong adherence and really seeing less discontinuations than we expected. So the anecdotal information we're getting from the marketplace as far as the real world experience, I would say, has said that safety is not an issue. Speaker 100:39:16Great. Shirley, next question please. Operator00:39:19Thank you. Our next question comes from Louise Chen with Cantor. You may ask your question. Speaker 700:39:24Hi. Thanks for taking my question. I wanted to ask you about your outlook for 2025, what are the major puts and takes and when do you plan to give that guidance? Thank you. Speaker 100:39:33Yes, I'll turn it over Speaker 200:39:34to Carolyn for that. Speaker 300:39:35So Louise, we plan to give our guidance with the Q4 earnings as we ordinarily do. But if I give you a sense of the overall pushes and pulls, if I start with 2024, it's been a really strong year for our company. As we've noted, we expect to deliver 6% to 7% growth, while we're investing in and really driving our pipeline and have delivered strong underlying operating margin improvement. As we look to 2025, we expect solid growth for our business. And the key opportunities that we have is the continued impact for KEYTRUDA, especially in earlier stage cancers, but the tumor types we would call out would be early stage non small cell lung cancer. Speaker 300:40:23We've got great opportunity in women's cancers, including early stage triple negative breast, but also endometrial and cervical cancer, and of course bladder cancer is a real opportunity for growth. We are confident where we are with Weligreg and the opportunities there to continue to see strong performance and impact for patients. And of course, we have the recent and upcoming launches that includes WinRiver where we have high expectations for growth. It includes where we expect to get a majority share over time and it also includes the opportunity for the launch of clazorozumab in RSV ahead of the 'twenty five, 'twenty six season. And as we noted, animal health is a strong contributor to growth, and we expect that to continue into next year. Speaker 300:41:19We have a few headwinds. One is the expiration of our agreement with J and J for the immunology products REMICADE and SYMPHONY. And as Rob noted, we do expect sales of GARDASIL in China to decline in 2025 compared with 2024. However, all of that said, we're very confident in the opportunity to drive solid growth for our business in 2025, while we invest fully behind our expansive pipeline, investing the commercial activities to ensure excellence in the marketplace and expect to deliver operating margin expansion. Speaker 100:42:01Thanks, Louise. Next question please. Operator00:42:04Thank you. Our next question comes from Chris Shibutani with Goldman Sachs. Your line is open. You may ask your question. Speaker 800:42:10Thank you very much. The capital allocation opportunity is something that you have been very consistent about providing us updates. Given some of the push flows in the business, in particular vulnerability with Gardasil, I think you have capacity and you have also mentioned interest in certain areas, I would note, with obesity. Can you update us on where you are with your appetite, scale, therapeutic area? Anything that would give us insight into your ability to use that as a lever to help perhaps offset some of this uncertainty tied to Gartisil? Speaker 800:42:40Thank you. Speaker 200:42:41Yes. No, Chris, thanks for the question. Obviously, I feel very good about the business development we've done, including some of the transactions that Dean just highlighted in the prepared remarks, and we're going to continue to look to do more. So while we feel good about where we are and actually as I made a comment in the prepared remarks, we have more Phase 3 assets now than we had with more than tripled it from where we were 3 years ago and with more than 20. So we have a lot there, but we need to add more and we're looking across all therapeutic areas. Speaker 200:43:15Our approach remains where it's always been, which is we start with the science and where we see a scientific opportunity that addresses an unmet need and where we think Merck can strategically play, if we see that align with value, we will act. As it relates to obesity, our goal and strategy there continues to be focusing on the 2nd and third generation opportunities in that space. We've talked in the past thinking more of a focus on oral opportunities and those can be in combination focused and those can be in combination focused on outcomes that go beyond just obesity, but to actually medical outcomes. So we continue to look, but we're going to be disciplined. And if we don't see something where we think it makes sense from a value perspective and a strategy, we won't move. Speaker 200:44:03Beyond that, I would say, you should continue to see us look in areas of oncology, immunology and broader cardiometabolic. All the places where we're playing today are areas where we continue to look for opportunities down the road. From a capacity perspective, just to be clear, we continue to think we have capacity frankly to do pretty much anything of any size, but our focus area continues to be mainly in that $1,000,000,000 to $15,000,000,000 range. Great. Thanks, Chris. Speaker 200:44:28Next question, please. Operator00:44:30Thank you. Our next question comes from Dana Graybosch with Leerink Partners. Your line is open. Speaker 300:44:36Yes. Can you talk a little Speaker 900:44:38bit more about the pneumococcal opportunity? What do you think is the incremental market size from the expansion down to age 50? And is there anything you're looking for in the MMWR language when they publish that recommendation that would drive more or less share to Cabazzi versus the competitors? Speaker 200:44:59Yes, maybe Dean you want to start and we can jump in. Speaker 400:45:01Yes, I mean I think it was interesting to watch the ACIP, they're balancing how to make the best recommendations. And we should just remember we have a 21 valent vaccine that gives 85% adult protection that was very clear and there is a competitor who has a 20 valent that has a 54% adult protection. And I think that was very clear at the ACIP. And I would just remind myself that previously when they thought about doing the 50 to 64 just with the 20 valent there was a decision not to proceed. And I really do think the health economic data and the data that we show for the 21 valent, given it's 85% versus 54% is what drove them to finally move and address a really important need, which is the health equity issues in relationship to a pneumococcal vaccination by lowering it to 50% to 64% and lowering it for everyone. Speaker 400:46:06But in terms of the dynamics in the market. Speaker 300:46:08So in terms of the commercial opportunity we have, given the strength of the data that Dean has just shared, we feel very confident in our opportunity. And to remind in terms of the number of patients in the United States, there's around 120,000,000 people over the age of 50. 60,000,000 of those are in the 50 to 64 age group, which now given the ACIP recommendation provides a tremendous opportunity for us to activate that patient cohort to go and get this vaccine, as well as the group that sit above the age of 65 given the strength of our data. So we are ready, we have supply and we're looking forward to ensuring that we can protect as many people as possible. Speaker 100:46:57Great. Thanks Dana. Next question please Shirley. Operator00:47:02Thank you. Our next question comes from Chris Schott with JPMorgan. You may ask your question. Speaker 1000:47:07Great. Thanks very much. Just another one on GARDASIL. Rob, I believe you said kind of $2,000,000,000 to $3,000,000,000 per year opportunity for China over the next few years. Just a couple of quick ones there. Speaker 1000:47:18First, what does that compare to where China is going to shake out for Merck this year? And is that $2,000,000,000 to $3,000,000,000 number what was reflected in the $11,000,000,000 longer term target? Thanks so much. Speaker 200:47:30Yes. So to give you just a sense of where we are and we don't normally give product level guidance, but are specifics at a quarterly basis, but given the importance and focus on GARDASIL, just to give you a sense of where we were China GARDASIL in the Q3, it's about approximately $500,000,000 in the Q3. And as we said, we would expect to ship about the same amount into the Q4. So you should expect that the Q4 itself would also be in that $500,000,000 range. And so that kind of gives you a sense of where we are. Speaker 200:48:07So as you look forward to 2025, obviously as we think in 2025 and over the next several years, if you're running in that $2,000,000,000 to $3,000,000,000 range, that's why we made the comment that with that and given the other opportunities we see around the world, we remain confident in our ability to get to the $11,000,000,000 by 2,030. So we are contemplating that $2,000,000,000 to $3,000,000,000 over the next several years in China as the contribution that it would make to get us to where we need, understanding also that long term, we do expect to be able to have the potential for growth driven by the mail opportunity in China and then obviously continuing to drive more broadly around the rest of the world. Speaker 100:48:55Great. Thanks, Chris. Next question please. Operator00:48:57Thank you. Our next question comes from Terence Flynn with Morgan Stanley. You may ask your question. Speaker 1100:49:03Great. Thanks so much. Maybe just one question and one clarification. Just on the GARDASIL side, Rob, that's the $2,000,000,000 to $3,000,000,000 includes the mails or it does not include the mails? Sorry, it was a little unclear based on the last response. Speaker 1100:49:18And then obviously, next gen IO remains a big focus for both Merck and the industry. I know Dean you talked a lot about some of the efforts Merck has made on this front. Would just be curious to get your perspective on the PD-one, PD L1 VEGF bispecifics. Obviously there's some data emerging out of China there. Just any thoughts on that data and where that might fit from a competitive landscape perspective or if that's a target Merck has considered at all? Speaker 1100:49:45Thank you. Speaker 200:49:46Yes. So I'll take the first part of that question, Terence. So the answer is yes. The $2,000,000,000 to $3,000,000,000 over the next several years does include mail, but we have the opportunity as you look longer term to drive growth with that opportunity. That was really the point we were trying to make. Speaker 400:50:04In relation to your question in relationship to the vascular endothelial growth factor pathway, it is an important axis. I just there's been a lot of data in that. It's not just the most recent data. Merck has made a substantial investment in that pathway. Our collaborations with Eisai and Exelixis is along that pathway. Speaker 400:50:24It's PD-one, in this case with VEGF RTK inhibitors. Other companies have taken their PD L1 and added to, for example, Avastin. And I would just emphasize, our interest in HIF-two alpha is also related to vascular endothelial growth factor. In relationship to the specific question about SUMMIT, that deep expertise that has developed in that VEGF, I think it's really important for all of us to watch carefully and we are watching carefully the ability to turn PFS into OS. The other issue is that in China, the health system is a little bit different as to how they treat individuals, but also the patients here are also different in terms of their responsiveness to VEGF. Speaker 400:51:07I would also emphasize that the experiment that was done in China is an experiment that we would unable to do, for example, in the United States. We would not be able to compare a new combo against KEYTRUDA monotherapy in the PD L1, 1 through 49 percent PD L1. That's something we would not be able to do because in that situation, the comparator is not monotherapy, but it's 189 KEYNOTE-one hundred and eighty nine. But broadly speaking, combos will be important, combos to deepen it, to go earlier stage will be important. I think vascular endothelial growth factor pathways are important. Speaker 400:51:50INT will be important. RAS will be important. ADCs will be important. And all of those readouts will come some before 2028, some around 2028 and some will happen after 2028. Operator00:52:05Our next question comes from Carter Gould with Barclays. Your line is open. Speaker 600:52:11Good morning. Thanks for taking the question. Appreciate all the Gardasil color. Maybe on WinRivera, can you comment on the impact of stocking in the quarter? And I'm trying to also kind of square, Rob, some of your comments around sort of the efforts to work through the sickest patients, kind of maybe help frame for us kind of how far you're along sort of that initial bolus of patients, those later line patients within the STELLAR label? Speaker 600:52:36Thank you. Speaker 300:52:38So, Carter, in the quarter, over 80% of the revenue is to support demand. And so a very small level of inventory build. And we'd expect inventory dollars to build over time given the growth that we expect in the product. In terms of the patients that are being prescribed the product, as Rob noted, a large portion, it's actually about 80% of the patients are on background triple therapy or in combination with the prostacyclin. So we're making really good progress in that segment. Speaker 300:53:13At the same time, a large number of the physicians have prescribed WinRevir now to patients that are not on a prostacyclin background therapy, which gives us confidence for the ability to move to the patients who are more dual therapy over time. And we remain confident in the opportunity in line with our high expectations to benefit patients and to drive significant commercial benefit for our company. Speaker 100:53:41Thanks Carter. Next question please Shirley. Operator00:53:44Thank you. Our next question comes from Umer Raffat with Evercore ISI. You may ask your question. Speaker 400:53:51Hi, guys. Thanks for taking my question. I have I wanted to focus on Gardasil just a little more. That was very helpful commentary, Rob. You mentioned $500,000,000 in sales in 3Q and 4Q to China, which obviously is $2,000,000,000 run rate. Speaker 400:54:03My question is, was that shipping to demand? Because if so, what that means is inventory sitting at your face is still something that would need to be worked down in 2025, as well as possible 9 Vaillant generic entry sorry, 9 Vaillant local competition entry in 2025 as well. How do you factor those two dynamics into thinking about the 2025 number of $2,000,000,000 to $3,000,000,000 in China? Thank you. Speaker 200:54:26Yes. So if you look at what's happening in the overall marketplace and just to give you a sense, from an inventory perspective, maybe starting there, if you look at overall inventory levels in China, they did come down and that's taking into account and this is for GARDASIL. GARDASIL at JERFE, which frankly remains high and grew slightly, but that was more than offset by reductions in the CDCs and the points of vaccination. So that's a good sign that we're seeing overall inventories coming down, which also would point to the fact that as we're looking at demand, which we're seeing stabilize, we think we're at a position now where as we're starting to talk about what we're shipping, our expectation is we are shipping below demand. So we have been working very constructively with Jirfe to think about this both as what we're doing in this year as frankly as well as we're continuing to have constructive dialogue around 2025. Speaker 200:55:26Our intention would be to balance the need to get product into the marketplace to meet the demand, at the same time allowing for Jirpay to bring down their inventories over time. So we're very thoughtful in how we're thinking about it and we've done that taking into account our expectations of both the female competitive launch that could come next year, but also the opportunity that a male approval early next year could allow us to have. So all of those factors are in as we think about that $2,000,000,000 to $3,000,000,000 number. Speaker 100:56:01Great. Thanks, Umer. Perhaps two more questions. Operator00:56:05Thank you. Our next question comes from Steve Scala with TD Speaker 1200:56:10Cowen. All things considered, is it still possible to see global GARDASIL growth in 2025? And Rob, you noted at the start that recovery in China will take time, but it sounds like you have good visibility now because you're giving this $2,000,000,000 to $3,000,000,000 guidance for GARDASIL in China. So I'm unclear what it is that we're waiting for? Thank you. Speaker 200:56:34Well, what we're talking about taking time is basically to work down the inventory and to then build demand over time so that we can continue to drive that market. What we're giving you is kind of what we see as the baseline of China. Our hope is that we'll do better and we're going to put the work in to do better and to continue to drive long term. I think that what I'm trying to make sure everyone hears is this isn't going to be solved next quarter. It's going to take us through probably 2025, but we're thoughtful on how we're doing it. Speaker 200:57:07We're working with Jirfe in a constructive manner to do it. So those are the elements are going to take time because we need to build the demand. We know the opportunity is there with 120 1,000,000 females still out there to go after and with potentially 200,000,000 males with the male opportunity. We have to activate that demand to make sure we can drive that business. So that's really what we're focusing on. Speaker 200:57:31As far as it relates to Gardasil for 2025, I don't think we really want to get into giving product line guidance right now. We were very specific to China because of the concerns that were there. And I wanted to make sure you know that we see solid overall growth for Merck because that's important to have context, but beyond that we normally wouldn't be giving guidance at this point Speaker 300:57:50in time. Speaker 100:57:51Great. Thanks, Steve. Last question please, Shirley. Operator00:57:55Thank you. And that comes from Mohit Bansal with Wells Fargo. You may ask your question. Speaker 400:58:01Great. Thank you very much for taking my question. Speaker 1300:58:04My question is regarding V-nine forty in lung cancer. I see that you have started Phase 3 trials. Could you please help us understand what kind of data you have seen in earlier stages, which makes you move into Phase 3? I don't think we have seen a lot of data from our side here. Thank you. Speaker 400:58:24Yes. So this is Dean. I would just emphasize, and I was trying to sort of lay the foundation during the prepared remarks. I would just recognize that in earlier stage, we have 9 approvals and 4 with OS. That basis allows us to drive curative setting combos in a way that is advantageous for the patient and also often uniquely ability for us. Speaker 400:58:50And the specific study that you're, I think, referring to is the announcement with our partners Moderna of going in lung cancer. Specifically, that one is built around KEYNOTE-six seventy one, which has an OS benefit and is approved. But the interesting thing is in the sort of neoadjuvant or perioperative followed by surgery, there becomes a situation where we can discern who has a pathological complete response and who doesn't have a pathological complete response. And that patient population that does not have a pathological complete response, there is the need and our ability to provide other combinations in that space And that is where we're driving the INT in that situation in lung cancer. Speaker 100:59:42Great. Thanks, Mohit, and thank you all for your good questions today. And as always, we're available for follow ups. Please reach out when you want. Take care. Speaker 100:59:50Thank you very much. Operator00:59:52Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your line at this time.Read morePowered by