Posaconazole

RAHWAY, N.J.--( BUSINESS WIRE )--Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2024. “ Our business is demonstrating strong momentum as we exit the first half of the year,” said Robert M. Davis, chairman and chief executive officer, Merck. “ Through excellent scientific, commercial and operational execution, we’re achieving significant milestones for our company and for patients, including the launch of WINREVAIR. I am proud of our dedicated teams around the world that are working tirelessly to advance our deep pipeline as we continue delivering innovation that solves unmet medical needs.” Financial Summary $ in millions, except EPS amounts Second Quarter 2024 2023 Change Change Ex- Exchange Sales $16,112 $15,035 7% 11% GAAP net income (loss) 1 5,455 (5,975) N/M N/M Non-GAAP net income (loss) that excludes certain items 1,2* 5,809 (5,220) N/M N/M GAAP EPS 2.14 (2.35) N/M N/M Non-GAAP EPS that excludes certain items 2* 2.28 (2.06) N/M N/M *Refer to table on page 7. N/M – Not meaningful For the second quarter of 2024, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $2.14 and non-GAAP EPS was $2.28. GAAP and non-GAAP loss per share for the second quarter of 2023 include a charge of $4.02 per share for the acquisition of Prometheus Biosciences, Inc. (Prometheus). Non-GAAP EPS in both periods excludes acquisition- and divestiture-related costs, costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the second quarter of 2024 also excludes a tax benefit due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year. Year-to-date results can be found in the attached tables. Second-Quarter Sales Performance The following table reflects sales of the company’s top products and significant performance drivers. Second Quarter $ in millions 2024 2023 Change Change Ex-Exchange Commentary Total Sales $16,112 $15,035 7% 11% Approximately 2 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market. Pharmaceutical 14,408 13,457 7% 11% Increase driven by growth in oncology, cardiovascular and vaccines, partially offset by declines in diabetes and virology. KEYTRUDA 7,270 6,271 16% 21% Growth driven by increased global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC) and renal cell carcinoma, as well as non-small cell lung cancer in the U.S., and continued strong global demand from metastatic indications. Approximately 4 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases. GARDASIL/GARDASIL 9 2,478 2,458 1% 4% Growth primarily due to higher sales in the U.S. driven by higher pricing, demand and public-sector buying patterns, as well as higher demand in certain ex-U.S. markets. Growth was largely offset by lower sales in China due to timing of shipments compared with prior year. JANUVIA/JANUMET 629 864 -27% -23% Decline primarily due to lower pricing and demand in the U.S., as well as ongoing generic competition in many international markets, particularly in Europe and the Asia Pacific region. PROQUAD, M-M-R II and VARIVAX 617 582 6% 7% Growth largely from higher pricing and demand in the U.S. BRIDION 455 502 -9% -8% Decline primarily due to generic competition in certain ex-U.S. markets, particularly in Europe and the Asia Pacific region, partially offset by higher demand in the U.S. Lynparza* 317 310 2% 4% Growth due to higher demand in the U.S. and certain international markets, particularly in China and Europe. Lenvima* 249 242 3% 4% Growth primarily from higher demand in the U.S. VAXNEUVANCE 189 168 13% 16% Growth largely driven by continued uptake from launches in Japan and Europe, partially offset by lower demand and public-sector buying patterns in the U.S. PREVYMIS 188 143 31% 35% Growth primarily due to higher global demand, particularly in the U.S., China and Europe. ROTATEQ 163 131 25% 26% Growth primarily due to timing of shipments to China and public-sector buying patterns in the U.S., partially offset by lower demand in the U.S. WELIREG 126 50 150% 150% Growth primarily driven by higher demand in the U.S., largely attributable to launch of a new indication. LAGEVRIO 110 203 -46% -42% Decline due to lower demand and pricing in certain markets in the Asia Pacific region, partially offset by higher demand in Japan and the U.S. WINREVAIR 70 - - - Represents sales in the U.S. following approval in March 2024. About 40% of sales were attributable to doses administered to patients and remainder was due to distributors building inventory in support of increasing demand. Animal Health 1,482 1,456 2% 6% Growth primarily driven by higher pricing in both Livestock and Companion Animal product portfolios, as well as higher demand for Livestock products, partially offset by a decline in Companion Animal distributor inventory. Approximately 3 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases. Livestock 837 807 4% 11% Growth primarily driven by higher demand for ruminant and poultry products, as well as higher pricing across product portfolio. Companion Animal 645 649 -1% 1% Sales were relatively flat compared with prior year reflecting lower distributor inventory, largely offset by higher pricing across product portfolio. Sales of BRAVECTO were $331 million and $326 million in current and prior-year quarters, respectively, which represented growth of 2%, or 3% excluding impact of foreign exchange. Other Revenues** 222 122 82% 53% Growth primarily due to higher royalty income and favorable impact of revenue hedging activities. *Alliance revenue for this product represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. **Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue hedging activities. Second-Quarter Expense, EPS and Related Information The table below presents selected expense information. $ in millions GAAP Acquisition- and Divestiture- Related Costs 3 Restructuring Costs (Income) Loss From Investments in Equity Securities Non- GAAP 2 Second Quarter 2024 Cost of sales $3,745 $606 $66 $- $3,073 Selling, general and administrative 2,739 24 31 - 2,684 Research and development 3,500 20 - - 3,480 Restructuring costs 80 - 80 - - Other (income) expense, net 42 (17) - (49) 108 Second Quarter 2023 Cost of sales $4,024 $467 $32 $- $3,525 Selling, general and administrative 2,702 25 52 - 2,625 Research and development 13,321 9 1 - 13,311 Restructuring costs 151 - 151 - - Other (income) expense, net 172 (3) - 194 (19) GAAP Expense, EPS and Related Information Gross margin was 76.8% for the second quarter of 2024 compared with 73.2% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9), partially offset by higher amortization of intangible assets. Selling, general and administrative (SG&A) expenses were $2.7 billion in the second quarter of 2024, an increase of 1% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange and lower restructuring costs. Research and development (R&D) expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs. Other (income) expense, net, was $42 million of expense in the second quarter of 2024 compared with $172 million of expense in the second quarter of 2023. The decrease was primarily due to income from investments in equity securities in 2024 compared with losses in 2023, partially offset by higher net interest expense in 2024. The effective tax rate of 9.1% for the second quarter of 2024 includes a 4.3 percentage point favorable impact due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year. GAAP EPS was $2.14 for the second quarter of 2024 compared with GAAP loss per share of $2.35 for the second quarter of 2023. GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus. Non-GAAP Expense, EPS and Related Information Non-GAAP gross margin was 80.9% for the second quarter of 2024 compared with 76.6% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9). Non-GAAP SG&A expenses were $2.7 billion in the second quarter of 2024, an increase of 2% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange. Non-GAAP R&D expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs. Non-GAAP other (income) expense, net, was $108 million of expense in the second quarter of 2024 compared with $19 million of income in the second quarter of 2023, primarily due to higher net interest expense. The non-GAAP effective tax rate was 14.1% for the second quarter of 2024. Non-GAAP EPS was $2.28 for the second quarter of 2024 compared with non-GAAP loss per share of $2.06 for the second quarter of 2023. Non-GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus. A reconciliation of GAAP to non-GAAP net income (loss) and EPS is provided in the table that follows. Second Quarter $ in millions, except EPS amounts 2024 2023 EPS GAAP EPS $2.14 $(2.35) Difference 0.14 0.29 Non-GAAP EPS that excludes items listed below 2 $2.28 $(2.06) Net Income (Loss) GAAP net income (loss) 1 $5,455 $(5,975) Difference 354 755 Non-GAAP net income (loss) that excludes items listed below 1,2 $5,809 $(5,220) Excluded Items: Acquisition- and divestiture-related costs 3 $633 $498 Restructuring costs 177 236 (Income) loss from investments in equity securities (49) 194 Decrease to net income/increase to net loss before taxes 761 928 Income tax (benefit) expense 4 (407) (173) Decrease to net income/increase to net loss $354 $755 Pipeline and Portfolio Highlights In the second quarter, Merck demonstrated further progress in its strong and diverse pipeline, achieving multiple regulatory and clinical milestones. In vaccines, Merck recently received approval from the U.S. Food and Drug Administration (FDA) for CAPVAXIVE, now the first pneumococcal conjugate vaccine specifically designed to address the serotypes responsible for approximately 85% of invasive pneumococcal disease cases in adults age 65 and older, based on the U.S. Centers for Disease Control and Prevention (CDC) data from 2018-2021. The CDC’s Advisory Committee on Immunization Practices (ACIP) unanimously voted to recommend CAPVAXIVE for adults age 65 and older who have not received a pneumococcal conjugate vaccine or whose vaccination history is unknown, for adults 19 to 64 with certain risk conditions, and for adults 19 and older who have started their pneumococcal vaccine series with PCV13. Additionally, shared clinical decision-making is recommended for a supplemental dose of CAPVAXIVE for adults over 65 who completed their vaccine series with both PCV13 and PPSV23. The company also recently announced positive topline results from its Phase 2b/3 trial of clesrovimab (MK-1654), an investigational respiratory syncytial virus (RSV) preventative monoclonal antibody for infants, which met all primary safety and efficacy endpoints. In cardiometabolic disease, Merck continued to make progress in its launch of WINREVAIR in the U.S. As of the end of June, more than 1,000 patients have received WINREVAIR. The company also announced that the European Union’s (EU) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion for WINREVAIR. If approved by the European Commission, WINREVAIR will be the first activin signaling inhibitor therapy for pulmonary arterial hypertension (PAH, World Health Organization [WHO] Group 1) to be approved in Europe, offering a new treatment option for certain adults with this rare, progressive disease. Additional worldwide regulatory filings for WINREVAIR are underway. In oncology, Merck received FDA approval for KEYTRUDA in combination with chemotherapy, followed by KEYTRUDA as a single agent, for the treatment of certain patients with endometrial carcinoma. This marks the 40 th indication for KEYTRUDA in the U.S., reinforcing its importance as a foundational therapy for certain types of cancer. At the 2024 American Society of Clinical Oncology Annual Meeting, new data were presented on four approved oncology medicines and four pipeline candidates in more than 25 types of cancer. In collaboration with Moderna, Inc., Merck announced encouraging three-year follow-up data for V940 (mRNA-4157) in combination with KEYTRUDA for the adjuvant treatment of patients with high-risk stage III and IV melanoma following complete resection. In addition, new Phase 3 data from a study conducted in China and independently led by Kelun-Biotech evaluating sacituzumab tirumotecan (MK-2870/SKB264), an investigational anti-TROP2 antibody-drug conjugate being developed by Merck in collaboration with Kelun-Biotech, were presented in previously treated patients with locally recurrent or metastatic TNBC. Merck Animal Health launched the 12-month injectable formulation of BRAVECTO for use in dogs in a number of markets in Europe for the treatment and persistent killing of fleas (Ctenocephalides felis and Ctenocephalides canis) and ticks (Rhipicephalus sanguineus, Ixodes ricinus, Ixodes hexagonus, and Dermacentor reticulatus). In addition, in July 2024, Merck completed the acquisition of the aqua business of Elanco Animal Health Incorporated. In July 2024, Merck also completed the acquisition of Eyebiotech Limited (EyeBio), which includes the lead candidate Restoret™/MK-3000 that is being evaluated for the treatment of patients with certain retinal diseases, including diabetic macular edema and neovascular age-related macular degeneration, as well as preclinical candidates. And, Merck and Orion Corporation announced the mutual exercise of an option to convert the companies’ ongoing co-development and co-commercialization agreement for opevesostat (MK-5684/ODM-208), an investigational CYP11A1 inhibitor, and other candidates, into an exclusive global license for Merck. Notable recent news releases on Merck’s pipeline and portfolio are provided in the table that follows. Oncology FDA Approved KEYTRUDA Plus Carboplatin and Paclitaxel as Treatment for Adult Patients With Primary Advanced or Recurrent Endometrial Carcinoma, Based on Results From Phase 3 NRG-GY018/KEYNOTE-868 Trial (Read Announcement) FDA Granted Priority Review to Merck’s Application for KEYTRUDA Plus Chemotherapy as First-Line Treatment of Patients With Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma, Based on Results From Phase 3 KEYNOTE-483 Trial; FDA Set Prescription Drug User Fee Act (PDUFA) Date of Sept. 25, 2024 (Read Announcement) Merck Received Positive EU CHMP Opinion for KEYTRUDA Plus Padcev as First-Line Treatment for Patients With Unresectable or Metastatic Urothelial Carcinoma, Based on Results From Phase 3 KEYNOTE-A39/EV-302 Trial (Read Announcement) Moderna and Merck Announced Three-Year Data for mRNA-4157 (V940) in Combination With KEYTRUDA Demonstrated Sustained Improvement in Recurrence-Free Survival and Distant Metastasis-Free Survival Versus KEYTRUDA in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection (Read Announcement) Merck Announced Phase 3 KEYNOTE-522 Trial Met Its Overall Survival (OS) Endpoint in Patients With High-Risk Early-Stage TNBC (Read Announcement) Merck Announced Phase 3 KEYNOTE-811 Trial Met Dual Primary Endpoint of OS as First-Line Treatment in Patients With HER2-Positive Advanced Gastric or Gastroesophageal Junction Adenocarcinoma (Read Announcement) Patritumab Deruxtecan Biologics License Application Submission Received Complete Response Letter From FDA Due to Inspection Findings at Third-Party Manufacturer (Read Announcement) Vaccines FDA Approved CAPVAXIVE for Prevention of Invasive Pneumococcal Disease and Pneumococcal Pneumonia in Adults, Based on Results From Four Phase 3 Trials (Read Announcement) CDC’s ACIP Unanimously Recommended CAPVAXIVE for Pneumococcal Vaccination in Appropriate Adults (Read Announcement) Merck Announced Topline Results From Phase 2b/3 Trial of Clesrovimab (MK-1654), an Investigational RSV Preventative Monoclonal Antibody for Infants, Met All Primary Safety and Efficacy Endpoints (Read Announcement) Cardiometabolic Merck Received Positive EU CHMP Opinion for WINREVAIR (sotatercept) in PAH (Read Announcement) Full-Year 2024 Financial Outlook The following table summarizes the company’s full-year financial outlook. Full Year 2024 Updated Prior Sales * $63.4 to $64.4 billion $63.1 to $64.3 billion Non-GAAP Gross margin 2 Approximately 81% Approximately 81% Non-GAAP Operating expenses 2** $26.8 to $27.6 billion $25.2 to $26.1 billion Non-GAAP Other (income) expense, net 2 Approximately $350 million expense Approximately $250 million expense Non-GAAP Effective tax rate 2 15.5% to 16.5% 14.5% to 15.5% Non-GAAP EPS 2*** $7.94 to $8.04 $8.53 to $8.65 Share count (assuming dilution) Approximately 2.54 billion Approximately 2.55 billion *The company does not have any non-GAAP adjustments to sales. **Includes one-time R&D charges of $656 million for Harpoon Therapeutics, Inc. (Harpoon) acquisition and $1.3 billion for EyeBio acquisition. Outlook does not assume any additional significant potential business development transactions. ***Includes one-time charges totaling $0.77 per share for the Harpoon and EyeBio acquisitions. Merck has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are inherently difficult to forecast and could have a significant impact on the company’s future GAAP results. Merck continues to experience strong global demand for key growth products, particularly in oncology, and despite impacts related to the lower sell out of GARDASIL from Zhifei Biological Products Co., Ltd. (the company’s distributor and commercialization partner in China) into the points of vaccination in the market during the quarter, Merck is raising and narrowing its full-year sales outlook. Merck now expects its full-year sales to be between $63.4 billion and $64.4 billion, including a negative impact of foreign exchange of approximately 3 percentage points, at mid-July 2024 exchange rates. Approximately 2 percentage points of the negative impact of foreign exchange is due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market. Merck now expects its full-year non-GAAP effective income tax rate to be between 15.5% and 16.5%, which includes an unfavorable impact related to the one-time charge for the acquisition of EyeBio, which is not tax deductible. Merck now expects its full-year non-GAAP EPS to be between $7.94 and $8.04, including one-time charges of $0.26 and $0.51 per share for the acquisitions of Harpoon and EyeBio, respectively. The outlook includes a negative impact of foreign exchange of more than $0.30 per share. The negative impact of foreign exchange is primarily due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market. This revised non-GAAP EPS range reflects the following items, which were not previously included in the outlook: A charge of $1.3 billion, or $0.51 per share, for the acquisition of EyeBio. Estimated 2024 expense of approximately $0.09 per share to be incurred to finance the EyeBio and Elanco aqua business acquisitions and to advance the acquired assets. Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions. Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, income and losses from investments in equity securities, as well as a tax benefit in 2024 due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year. Earnings Conference Call Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Tuesday, July 30, at 9 a.m. ET via this weblink . A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures, and slides highlighting the results, will be available at www.merck.com . All participants may join the call by dialing (800) 779-0641 (U.S. and Canada Toll-Free) or (517) 308-9147 and using the access code 4761229. About Merck At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on X (formerly Twitter) , Facebook , Instagram , YouTube and LinkedIn . Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA This news release of Merck & Co., Inc., Rahway, N.J., USA (the “company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site ( www.sec.gov ). Appendix Generic product names are provided below. Pharmaceutical BRIDION (sugammadex) CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) GARDASIL ( Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant ) GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) JANUMET (sitagliptin and metformin HCl) JANUVIA (sitagliptin) KEYTRUDA (pembrolizumab) LAGEVRIO (molnupiravir) Lenvima (lenvatinib) Lynparza ( olaparib) M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live) PREVYMIS ( letermovir ) PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live) ROTATEQ (Rotavirus Vaccine, Live, Oral, Pentavalent) VARIVAX (Varicella Virus Vaccine Live) VAXNEUVANCE ( Pneumococcal 15-valent Conjugate Vaccine ) WELIREG ( belzutifan ) WINREVAIR (sotatercept-csrk) Animal Health BRAVECTO (fluralaner) _________________________ 1 Net income (loss) attributable to Merck & Co., Inc. 2 Merck is providing certain 2024 and 2023 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release. 3 Reflects expenses related to acquisitions of businesses, including the amortization of intangible assets, intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations and licensing arrangements. 4 Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments, as well as a $259 million benefit in the second quarter of 2024, due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year. MERCK & CO., INC. CONSOLIDATED STATEMENT OF OPERATIONS - GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 1 GAAP % Change GAAP % Change 2Q24 2Q23 June YTD 2024 June YTD 2023 Sales $ 16,112 $ 15,035 7 % $ 31,887 $ 29,522 8 % Costs, Expenses and Other Cost of sales 3,745 4,024 -7 % 7,285 7,951 -8 % Selling, general and administrative 2,739 2,702 1 % 5,221 5,182 1 % Research and development 3,500 13,321 -74 % 7,492 17,597 -57 % Restructuring costs 80 151 -47 % 202 218 -7 % Other (income) expense, net 42 172 -76 % 12 259 -95 % Income (Loss) Before Taxes 6,006 (5,335 ) * 11,675 (1,685 ) * Income Tax Provision 545 637 1,447 1,462 Net Income (Loss) 5,461 (5,972 ) * 10,228 (3,147 ) * Less: Net Income Attributable to Noncontrolling Interests 6 3 11 7 Net Income (Loss) Attributable to Merck & Co., Inc. $ 5,455 $ (5,975 ) * $ 10,217 $ (3,154 ) * Earnings (Loss) per Common Share Assuming Dilution (1) $ 2.14 $ (2.35 ) * $ 4.02 $ (1.24 ) * Average Shares Outstanding Assuming Dilution (1) 2,544 2,539 2,544 2,539 Tax Rate 9.1 % -11.9 % 12.4 % -86.8 % * 100% or greater (1) Because the company recorded a net loss in the second quarter and first six months of 2023, no potential dilutive common shares were used in the computation of loss per common share assuming dilution as the effect would have been anti-dilutive. MERCK & CO., INC. THREE AND SIX MONTHS ENDED JUNE 30, 2024 GAAP TO NON-GAAP RECONCILIATION (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 2a GAAP Acquisition and Divestiture-Related Costs (1) Restructuring Costs (2) (Income) Loss from Investments in Equity Securities Certain Other Items Adjustment Subtotal Non-GAAP Second Quarter Cost of sales $ 3,745 606 66 672 $ 3,073 Selling, general and administrative 2,739 24 31 55 2,684 Research and development 3,500 20 20 3,480 Restructuring costs 80 80 80 – Other (income) expense, net 42 (17 ) (49 ) (66 ) 108 Income Before Taxes 6,006 (633 ) (177 ) 49 (761 ) 6,767 Income Tax Provision (Benefit) 545 (129 ) (3) (30 ) (3) 11 (3) (259 ) (4) (407 ) 952 Net Income 5,461 (504 ) (147 ) 38 259 (354 ) 5,815 Net Income Attributable to Merck & Co., Inc. 5,455 (504 ) (147 ) 38 259 (354 ) 5,809 Earnings per Common Share Assuming Dilution $ 2.14 (0.20 ) (0.06 ) 0.02 0.10 (0.14 ) $ 2.28 Tax Rate 9.1 % 14.1 % June YTD Cost of sales $ 7,285 1,069 182 1,251 $ 6,034 Selling, general and administrative 5,221 45 36 81 5,140 Research and development 7,492 36 2 38 7,454 Restructuring costs 202 202 202 – Other (income) expense, net 12 (21 ) (165 ) (186 ) 198 Income Before Taxes 11,675 (1,129 ) (422 ) 165 (1,386 ) 13,061 Income Tax Provision (Benefit) 1,447 (221 ) (3) (72 ) (3) 36 (3) (259 ) (4) (516 ) 1,963 Net Income 10,228 (908 ) (350 ) 129 259 (870 ) 11,098 Net Income Attributable to Merck & Co., Inc. 10,217 (908 ) (350 ) 129 259 (870 ) 11,087 Earnings per Common Share Assuming Dilution $ 4.02 (0.35 ) (0.14 ) 0.05 0.10 (0.34 ) $ 4.36 Tax Rate 12.4 % 15.0 % Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses primarily reflect the amortization of intangible assets. Amounts included in other (income) expense, net, primarily reflect royalty income related to the prior termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs. (3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Represents a benefit due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year. MERCK & CO., INC. FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table 3 2024 2023 2Q June YTD 1Q 2Q June YTD 1Q 2Q June YTD 3Q 4Q Full Year Nom % Ex-Exch % Nom % Ex-Exch % TOTAL SALES (1) $15,775 $16,112 $31,887 $14,487 $15,035 $29,522 $15,962 $14,630 $60,115 7 11 8 11 PHARMACEUTICAL 14,006 14,408 28,415 12,721 13,457 26,179 14,263 13,141 53,583 7 11 9 12 Oncology Keytruda 6,947 7,270 14,217 5,795 6,271 12,065 6,338 6,608 25,011 16 21 18 22 Alliance Revenue – Lynparza (2) 292 317 609 275 310 585 299 315 1,199 2 4 4 6 Alliance Revenue – Lenvima (2) 255 249 504 232 242 474 260 226 960 3 4 6 7 Welireg 85 126 211 42 50 92 54 72 218 150 150 128 128 Alliance Revenue – Reblozyl (3) 71 90 161 43 47 90 52 70 212 92 92 80 80 Vaccines (4) Gardasil/Gardasil 9 2,249 2,478 4,727 1,972 2,458 4,430 2,585 1,871 8,886 1 4 7 10 ProQuad/M-M-R II/Varivax 570 617 1,187 528 582 1,109 713 545 2,368 6 7 7 7 Vaxneuvance 219 189 408 106 168 274 214 176 665 13 16 49 51 RotaTeq 216 163 379 297 131 428 156 185 769 25 26 -11 -10 Pneumovax 23 61 59 120 96 92 188 140 85 412 -36 -32 -36 -32 Hospital Acute Care Bridion 440 455 895 487 502 989 424 429 1,842 -9 -8 -9 -8 Prevymis 174 188 362 129 143 273 157 175 605 31 35 33 37 Dificid 73 92 165 65 76 141 74 87 302 20 20 16 16 Zerbaxa 56 62 118 50 54 104 53 61 218 14 18 13 16 Noxafil 56 45 101 60 55 116 51 46 213 -20 -9 -13 -2 Cardiovascular Alliance Revenue - Adempas/Verquvo (5) 98 106 203 99 68 167 92 108 367 56 56 22 22 Adempas (6) 70 72 142 59 65 125 65 66 255 11 15 14 17 Winrevair 70 70 - - - - Virology Lagevrio 350 110 460 392 203 595 640 193 1,428 -46 -42 -23 -18 Isentress/Isentress HD 111 89 200 123 136 259 119 105 483 -35 -31 -23 -19 Delstrigo 56 60 116 44 50 94 54 54 201 19 23 23 26 Pifeltro 42 39 81 34 38 72 37 33 142 3 4 13 13 Neuroscience Belsomra 46 53 99 56 63 119 58 54 231 -16 -8 -17 -10 Immunology Simponi 184 172 356 180 180 359 179 171 710 -4 -2 -1 -1 Remicade 39 35 74 51 48 99 45 43 187 -27 -20 -25 -21 Diabetes (7) Januvia 419 405 824 551 511 1,062 581 547 2,189 -21 -16 -22 -19 Janumet 251 224 475 329 354 683 255 240 1,177 -37 -32 -30 -26 Other Pharmaceutical (8) 576 573 1,151 626 560 1,187 568 576 2,333 2 6 -3 -1 ANIMAL HEALTH 1,511 1,482 2,993 1,491 1,456 2,947 1,400 1,278 5,625 2 6 2 5 Livestock 850 837 1,686 849 807 1,656 874 808 3,337 4 11 2 7 Companion Animal 661 645 1,307 642 649 1,291 526 470 2,288 -1 1 1 3 Other Revenues (9) 258 222 479 275 122 396 299 211 907 82 53 21 24 Sum of quarterly amounts may not equal year-to-date amounts due to rounding. (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Alliance Revenue represents royalties. (4) Total Vaccines sales were $3,424 million and $3,656 million in the first and second quarter of 2024, respectively, and $3,133 million and $3,557 million in the first and second quarter of 2023, respectively. (5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs. (6) Net product sales in Merck's marketing territories. (7) Total Diabetes sales were $745 million and $715 million in the first and second quarter of 2024, respectively, and $950 million and $951 million in the first and second quarter of 2023, respectively. (8) Includes Pharmaceutical products not individually shown above. (9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $61 million and $15 million in the first and second quarter of 2024, respectively, and $51 million and $3 million in the first and second quarter of 2023, respectively.

Results from a randomized, placebo-controlled study of TRIKAFTA® in people with cystic fibrosis with rare, non-F508del CFTR mutations showed statistically significant and clinically meaningful improvements in the primary and all secondary endpoints Interim results of largest real-world study of TRIKAFTA® showed sustained improvement in lung function at three years as well as lower rates of lung transplant and death in people with cystic fibrosis, compared to pre-TRIKAFTA® initiation BOSTON--(BUSINESS WIRE)-- Vertex Pharmaceuticals Incorporated (Nasdaq: VRTX) today announced that data on TRIKAFTA® (elexacaftor/tezacaftor/ivacaftor and ivacaftor), also known in the European Union and in the U.K. as KAFTRIO® (ivacaftor/tezacaftor/elexacaftor) in combination with ivacaftor, were presented at this year’s European Cystic Fibrosis Society’s (ECFS) 47th European Cystic Fibrosis Conference held June 5-8, 2024, in Glasgow, Scotland. Data from a randomized, double-blind, Phase 3 study (abstract WS06.04) demonstrated that people with CF who have rare, non-F508del mutations in the cystic fibrosis transmembrane conductance regulator (CFTR) gene responsive to TRIKAFTA® in vitro demonstrated clinical benefit from receiving TRIKAFTA®. Compared to placebo, lung function improved by 9.2 percentage points as measured by ppFEV1, CFTR function improved (as measured by mean sweat chloride concentration reductions of 28.3 mmol/L), and pulmonary exacerbations were reduced by 72% per year. Safety and tolerability were generally consistent with the established safety pro TRIKAFTA®. Vertex also presented the interim analysis (IA) of a registry-based study of real-world data collected from people with CF initiating TRIKAFTA® from 2019-20 in the U.S. and KAFTRIO® plus ivacaftor from 2020-21 in Germany (abstract WS01.04). The ongoing five-year post-authorization study is the largest real-world study of people with CF treated with TRIKAFTA®/KAFTRIO® to date, including more than 16,000 people with CF from the U.S. Cystic Fibrosis Foundation Patient Registry (CFFPR) and approximately 3,000 people with CF from the German CF Registry. The IA showed clinically meaningful, disease-modifying benefits for TRIKAFTA®/KAFTRIO®, including a 76% and 70% reduction in the cumulative annual rate of pulmonary exacerbations in the U.S. and in Germany, respectively, compared to the year prior to TRIKAFTA®/KATRIO® treatment. In addition, there was a 62% lower rate of death in the U.S. and 84% lower in Germany; and an 86% lower rate of lung transplant in the U.S. and 96% lower in Germany compared to the 2019 U.S. CFFPR and German CF Registry populations (pre-TRIKAFTA®/KAFTRIO®). No new safety concerns were identified. “The breadth of TRIKAFTA data presented at ECFS is further evidence of the significant potential of this disease-modifying medicine,” said Carmen Bozic, M.D., Executive Vice President, Global Medicines Development and Medical Affairs, and Chief Medical Officer at Vertex. “These studies demonstrate that TRIKAFTA is changing the course of CF treatment and the lives of those living with CF.” Additional Presentations Other Vertex presentations at the conference this year include: Abstract WS15.02, entitled “Real-World Effectiveness of Elexacaftor/Tezacaftor/Ivacaftor (ELX/TEZ/IVA) in People With Cystic Fibrosis and ELX/TEZ/IVA-Responsive, Non-F508del CFTR Genotypes” Abstract EPS10.08, entitled “LONGITUDE: An Observational Study of the Long-term Effectiveness of ELX/TEZ/IVA in People With CF Using Data From the UK CF Registry – Preliminary Results From the Subgroup Aged 6-11 Years” Abstract P096, entitled “Qualitative Interviews Confirming the Faithful Electronic Migration of the Preschool Pictorial Cystic Fibrosis Questionnaire-Revised (CFQ-R) and Parent Preschool CFQ-R” Abstract EPS6.05, entitled “Clinical Outcomes in Concurrent Elexacaftor/Tezacaftor/Ivacaftor (ELX/TEZ/IVA) Treated vs. Ineligible Cohorts in the US Cystic Fibrosis Foundation Patient Registry (CFFPR) During COVID-19” Abstract P063, entitled “ELX/TEZ/IVA has beneficial effects on clinical outcomes and quality of life in people with cystic fibrosis in the real-world TRAJECTORY study” Abstract P072, entitled “Real-World Impact of Elexacaftor/Tezacaftor/Ivacaftor (ELX/TEZ/IVA) in Italy: A Retrospective Study From a CF Center” About Cystic Fibrosis Cystic fibrosis (CF) is a rare, life-shortening genetic disease affecting more than 92,000 people globally. CF is a progressive, multi-organ disease that affects the lungs, liver, pancreas, GI tract, sinuses, sweat glands and reproductive tract. CF is caused by a defective and/or missing CFTR protein resulting from certain mutations in the CFTR gene. Children must inherit two defective CFTR genes — one from each parent — to have CF, and these mutations can be identified by a genetic test. While there are many different types of CFTR mutations that can cause the disease, the vast majority of people with CF have at least one F508del mutation. CFTR mutations lead to CF by causing CFTR protein to be defective or by leading to a shortage or absence of CFTR protein at the cell surface. The defective function and/or absence of CFTR protein results in poor flow of salt and water into and out of the cells in a number of organs. In the lungs, this leads to the buildup of abnormally thick, sticky mucus, chronic lung infections and progressive lung damage that eventually leads to death for many patients. The median age of death is in the 30s, but with treatment, projected survival is improving. Today Vertex CF medicines are treating over 65,000 people with CF across 60 countries on six continents. This represents 2/3 of the diagnosed people with CF eligible for CFTR modulator therapy. About TRIKAFTA® (elexacaftor/tezacaftor/ivacaftor and ivacaftor) In people with certain types of mutations in the CFTR gene, the CFTR protein is not processed or folded normally within the cell, and this can prevent the CFTR protein from reaching the cell surface and functioning properly. TRIKAFTA® (elexacaftor/tezacaftor/ivacaftor and ivacaftor) is an oral medicine designed to increase the quantity and function of the CFTR protein at the cell surface. Elexacaftor and tezacaftor work together to increase the amount of mature protein at the cell surface. Ivacaftor, which is known as a CFTR potentiator, is designed to facilitate the ability of CFTR proteins to transport salt and water across the cell membrane. The combined actions of elexacaftor, tezacaftor and ivacaftor help hydrate and clear mucus from the airways. TRIKAFTA U.S. INDICATIONS AND IMPORTANT SAFETY INFORMATION FOR INDICATIONS AND USAGE TRIKAFTA (elexacaftor/tezacaftor/ivacaftor and ivacaftor) is a prescription medicine used for the treatment of cystic fibrosis (CF) in patients aged 2 years and older who have at least one copy of the F508del mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene or another mutation that is responsive to treatment with TRIKAFTA. Patients should talk to their doctor to learn if they have an indicated CF gene mutation. It is not known if TRIKAFTA is safe and effective in children under 2 years of age. IMPORTANT SAFETY INFORMATION Before taking TRIKAFTA, patients should tell their doctor about all of their medical conditions, including if they: are allergic to TRIKAFTA or any ingredients in TRIKAFTA, have kidney problems, have or have had liver problems, are pregnant or plan to become pregnant because it is not known if TRIKAFTA will harm an unborn baby, or are breastfeeding or planning to breastfeed because it is not known if TRIKAFTA passes into breast milk. Patients should tell their doctor about all the medicines they take, including prescription and over-the-counter medicines, vitamins, and herbal supplements. TRIKAFTA may affect the way other medicines work, and other medicines may affect how TRIKAFTA works. The dose of TRIKAFTA may need to be adjusted when taken with certain medicines. Patients should ask their doctor or pharmacist for a list of these medicines if they are not sure. Patients should especially tell their doctor if they take: antibiotics such as rifampin or rifabutin; seizure medicines such as phenobarbital, carbamazepine, or phenytoin; St. John’s wort; antifungal medicines including ketoconazole, itraconazole, posaconazole, voriconazole, or fluconazole; antibiotics including telithromycin, clarithromycin, or erythromycin. Patients should avoid food or drink that contains grapefruit while taking TRIKAFTA. TRIKAFTA can cause serious side effects, including: Liver damage and worsening of liver function in patients with severe liver disease that can be serious and may require transplantation. Liver damage has also happened in patients without liver disease. High liver enzymes in the blood, which is a common side effect in patients treated with TRIKAFTA. These can be serious and may be a sign of liver injury. The patient’s doctor will do blood tests to check their liver before they start TRIKAFTA, every 3 months during the first year of taking TRIKAFTA, and every year while taking TRIKAFTA. Patients should call their doctor right away if they have any of the following symptoms of liver problems: pain or discomfort in the upper right stomach (abdominal) area; yellowing of the skin or the white part of the eyes; loss of appetite; nausea or vomiting; dark, amber-colored urine. Serious allergic reactions have happened to patients who are treated with TRIKAFTA. Call your healthcare provider or go to the emergency room right away if you have any symptoms of an allergic reaction. Symptoms of an allergic reaction may include: rash or hives; tightness of the chest or throat or difficulty breathing; swelling of the face, lips and/or tongue; difficulty swallowing; and light-headedness or dizziness. Abnormality of the eye lens (cataract) has been noted in some children and adolescents treated with TRIKAFTA. If the patient is a child or adolescent, their doctor should perform eye examinations before and during treatment with TRIKAFTA to look for cataracts. The most common side effects of TRIKAFTA include headache, upper respiratory tract infection (common cold) including stuffy and runny nose, stomach (abdominal) pain, diarrhea, rash, increase in liver enzymes, increase in a certain blood enzyme called creatine phosphokinase, flu (influenza), inflamed sinuses, and increase in blood bilirubin. Patients should tell their doctor if they have any side effect that bothers them or that does not go away. These are not all the possible side effects of TRIKAFTA. For more information, patients should ask their doctor or pharmacist. Please click here to see the full U.S. Prescribing Information for TRIKAFTA. About KAFTRIO® (ivacaftor/tezacaftor/elexacaftor) in Combination With Ivacaftor In people with certain types of mutations in the CFTR gene, the CFTR protein is not processed or folded normally within the cell, and this can prevent the CFTR protein from reaching the cell surface and functioning properly. KAFTRIO® (ivacaftor/tezacaftor/elexacaftor) in combination with ivacaftor is an oral medicine designed to increase the quantity and function of the CFTR protein at the cell surface. Elexacaftor and tezacaftor work together to increase the amount of mature protein at the cell surface by binding to different sites on the CFTR protein. Ivacaftor, which is known as a CFTR potentiator, is designed to facilitate the ability of CFTR proteins to transport salt and water across the cell membrane. The combined actions of ivacaftor, tezacaftor and elexacaftor help hydrate and clear mucus from the airways. KAFTRIO® (ivacaftor/tezacaftor/elexacaftor) in combination with ivacaftor is approved in the European Union and in the U.K. for the treatment of cystic fibrosis (CF) in patients aged 2 years and older who have at least one copy of the F508del mutation in the CFTR gene. For complete product information, please see the Summary of Product Characteristics that can be found on and on . About Vertex Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious diseases. The company has approved medicines that treat the underlying causes of multiple chronic, life-shortening genetic diseases — cystic fibrosis, sickle cell disease and transfusion-dependent beta thalassemia — and continues to advance clinical and research programs in these diseases. Vertex also has a robust clinical pipeline of investigational therapies across a range of modalities in other serious diseases where it has deep insight into causal human biology, including acute and neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy, autosomal dominant polycystic kidney disease, type 1 diabetes, myotonic dystrophy type 1 and alpha-1 antitrypsin deficiency. Vertex was founded in 1989 and has its global headquarters in Boston, with international headquarters in London. Additionally, the company has research and development sites and commercial offices in North America, Europe, Australia, Latin America and the Middle East. Vertex is consistently recognized as one of the industry's top places to work, including 14 consecutive years on Science magazine's Top Employers list and one of Fortune’s 100 Best Companies to Work For. For company updates and to learn more about Vertex's history of innovation, visit or follow us on LinkedIn, Facebook, Instagram, YouTube and Twitter/X. Special Note Regarding Forward-Looking Statements This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements by Carmen Bozic, M.D. in this press release, and statements regarding our expectations for the benefits of TRIKAFTA/KAFTRIO. While Vertex believes the forward-looking statements contained in this press release are accurate, these forward-looking statements represent the company's beliefs only as of the date of this press release and there are a number of risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied by such forward-looking statements. Those risks and uncertainties include, among other things, that data from the company’s studies may not be indicative of final clinical trial results, that data from the company's development programs may not support registration or further development of its compounds due to safety, efficacy, or other reasons, that data may not be available on the anticipated timeline, or at all, that our development programs may experience delays, and other risks listed under the heading “Risk Factors” in Vertex's most recent annual report and subsequent filings filed with the Securities and Exchange Commission at and available through the company's website at . You should not place undue reliance on these statements or the scientific data presented. Vertex disclaims any obligation to update the information contained in this press release as new information becomes available. (VRTX-GEN) View source version on businesswire.com: Contacts Vertex Pharmaceuticals Incorporated Investors: InvestorInfo@vrtx.com Media: mediainfo@vrtx.com or U.S.: 617-341-6992 or International: +44 20 3204 5275 Source: Vertex Pharmaceuticals Incorporated View this news release online at: