Cladribine

Tailwind thanks to robust global growth trends in all three business sectors Life Science to be back on course as company’s growth engine Healthcare with ambition for mid-single-digit long-term growth Age of artificial intelligence (AI) drives medium-term growth upgrade for Electronics Acquisitions remain an integral component of company strategy Merck KGaA, Darmstadt, Germany, a leading science and technology company, is looking confidently toward the future. At today’s Capital Markets Day, the company shared its expectation of profitable and financially strong growth in the coming years. After the transitional year of 2023, Merck KGaA, Darmstadt, Germany, considers the medium-term growth opportunities in its markets to be intact. With its three business sectors, the company is in a strong strategic position to partake in these opportunities. In Electronics, which develops solutions for the semiconductor and display industries, the Group even expects business performance to accelerate in the next few years. This is thanks in particular to the trend toward artificial intelligence. “We committed to return to growth in 2024 and this is materializing already,” said Belén Garijo, Chair of the Executive Board and CEO of Merck KGaA, Darmstadt, Germany. “Furthermore, we are well positioned to deliver sustainable growth through innovation and our high-performing global talent.” Innovations as growth drivers Merck KGaA, Darmstadt, Germany, relies on its diversified business model to spark discovery and elevate humanity in accordance with its new company vision. In its Life Science business sector, the company sees the globally growing later-stage pipeline of complex molecules and novel modalities, among other things, as key growth drivers. Novel modalities include new therapies such as viral vector-based cell and gene therapies, antibody-drug conjugates (ADCs), and mRNA applications. The company has in-depth knowledge and offers a broad portfolio of products and services in these areas. ADCs are experiencing remarkable growth, for example. The Group has significantly increased its ADC and highly potent active pharmaceutical ingredient (HPAPI) capacities in recent years. In Healthcare, Merck KGaA, Darmstadt, Germany, takes up leading positions in therapeutic areas within its Fertility and Cardiovascular, Metabolic & Endocrinology franchises, leveraging the company’s broad geographical footprint. Innovations in Oncology and Neurology & Immunology will continue to drive long-term growth. In June 2024, the company started a Phase III trial with cladribine capsules to treat the neurological disease myasthenia gravis. With enpatoran, developed for lupus erythematosus, it expects the full Phase II readout in early 2025. For pimicotinib [1] for the treatment of benign tumors of the joints, the Phase III readout is expected later this year. In addition, the company is executing its early-stage oncology development strategy, which it outlined in its R&D update call earlier this year . In the Electronics business sector, Merck KGaA, Darmstadt, Germany, has deliberately focused on solutions for the semiconductor and display industries. The company supports its customers in developing ever smaller, more powerful, and more efficient chips, among other things. In doing so, it helps to meet global demand for AI applications and modern semiconductors. For example, with the intended acquisition of Unity-SC , the Group will expand its portfolio with high-precision metrology instruments to optimize the quality and production yield and thus also the manufacturing costs of chips for its customers. Merck KGaA, Darmstadt, Germany, is also recording growing sales from sustainable solutions. For example, the company has increased its portfolio of more sustainable products in Life Science by an average of 30% annually since 2020. For example, Milli-Q ® systems for the purification of lab water that contain the ERA ™ technology can save up to 50% in water usage compared with other systems. The company’s innovative power drives organic growth. At the same time, the strong market position and stringent cost management of Merck KGaA, Darmstadt, Germany, ensure good profitability. It intends to normalize its current capital expenditure (capex) of approximately € 1.6 billion to € 1.8 billion per year at a slightly lower level once again from 2026 onwards. In previous years, the company had significantly increased its capex to prepare for medium- and long-term growth trends by expanding capacities in research and development as well as production, for example. Having reached these goals, Merck KGaA, Darmstadt, Germany, now expects less capital-intensive growth, which will facilitate stronger cash flow development. Strategic acquisitions Acquisitions also remain an integral component of the strategy of Merck KGaA, Darmstadt, Germany. On July 31, 2024, it acquired Mirus Bio . The U.S. life science company specializes in transfection reagents, which help introduce genetic material into cells and play a key role in the production of viral vectors for cell and gene therapies. Also in July 2024, Merck KGaA, Darmstadt, Germany, announced the acquisition of Unity-SC . For larger future transactions, the company is focusing on the Life Science business sector. The company will additionally intensify the in-licensing of drug candidates in Healthcare. Belén Garijo said: “M&A remains a key priority for us. And we remain disciplined and patient in our approach in order to maximize the strategic impact of any acquisitions. Our guiding principle is and always has been: The right target, at the right time, for the right price.” Medium-term ambitions: Growth trends in the markets remain intact At Capital Markets Day 2024, Merck KGaA, Darmstadt, Germany, slightly adjusted the mid-term growth ambitions for its three business sectors. The company is confident that the growth opportunities in its markets remain intact after the transitional year of 2023. It expects the following average annual organic sales growth rates: Life Science: 7% to 9% (previously: 7% to 10%) and therefore still above the market average. The main reason for the refined ambition is the updated view on China’s mid-term growth prospects. Healthcare: slight growth (previously: growth in the mid-single-digit percentage range). This is due to the recently announced pipeline setbacks. In the long term, the company intends to return to growth in the mid-single-digit percentage range, also supported by external innovation. Electronics: 5% to 9%, a significant uplift from the previous 3% to 6%. This is largely driven by Electronics becoming a pure play in the areas of Semiconductor and Display Solutions and enabling the trend toward artificial intelligence. The company benefits here from its unique position as a supplier of semiconductor solutions that meet the high demands of chips for AI applications. Company confirms guidance for fiscal 2024 For fiscal 2024, Merck KGaA, Darmstadt, Germany, confirms its guidance and the return to profitable growth : Sales: between € 20.7 billion and € 22.1 billion (organic growth: +2% to +5%). EBITDA pre: between € 5.8 billion and € 6.4 billion (organic growth: +4% to +10%). EPS pre: € 8.20 to € 9.30. [1] Sponsor: Abbisko Therapeutics Co. Ltd.; Merck KGaA, Darmstadt, Germany, holds an exclusive license to commercialize pimicotinib in China, Hong Kong, Macau, and Taiwan, with an option for the rest of the world. About Merck KGaA, Darmstadt, Germany Merck KGaA, Darmstadt, Germany, a leading science and technology company, operates across life science, healthcare and electronics. Around 63,000 employees work to make a positive difference to millions of people’s lives every day by creating more joyful and sustainable ways to live. From providing products and services that accelerate drug development and manufacturing as well as discovering unique ways to treat the most challenging diseases to enabling the intelligence of devices – the company is everywhere. In 2023, Merck KGaA, Darmstadt, Germany, generated sales of € 21 billion in 65 countries. The company holds the global rights to the name and trademark “Merck” internationally. The only exceptions are the United States and Canada, where the business sectors of Merck KGaA, Darmstadt, Germany, operate as MilliporeSigma in life science, EMD Serono in healthcare and EMD Electronics in electronics. Since its founding in 1668, scientific exploration and responsible entrepreneurship have been key to the company’s technological and scientific advances. To this day, the founding family remains the majority owner of the publicly listed company. All Merck KGaA, Darmstadt, Germany, press releases are distributed by e-mail at the same time they become available on the EMD Group website. In case you are a resident of the USA or Canada, please go to www.emdgroup.com/subscribe to register for your online, change your selection or discontinue this service.

The FDA has signed off on Genentech's subcutaneous version of multiple sclerosis blockbuster Ocrevus, which will give patients a convenient alternative to the treatment's original infused formulation. When Roche's Genentech gained approval for Ocrevus in 2017, the first-in-class infused drug quickly became the best-selling treatment in a crowded multiple sclerosis (MS) market. Three years later, Novartis’ next-in-class Kesimpta stole some of Ocrevus’ thunder, offering a convenience edge with its once-monthly, at-home prefilled injection. Now, Genentech has responded with a new formulation as the FDA has endorsed a subcutaneous version of Ocrevus. While it can’t match the at-home convenience of Kesimpta, subcutaneous Ocrevus Zunovo, with its twice-a-year, under-the-skin dosing regimen, provides an attractive option.“This is something than can be provided in clinics and doesn’t require people to go to an infusion center,” David Jones, Genentech’s medical director for MS, said in an interview. “This will expand access to individuals who may not be able to access Ocrevus now, especially for reasons like geography or rural setting, individuals that might have challenges with their healthcare provider.”Ocrevus Zunovo can be injected in 10 minutes, compared to the two-plus hours needed for an infusion of the drug. For patients who experience side effects, the intravenous infusion can take up to four hours. Oddly enough, on Thursday, Genentech also earned an FDA nod for a subcutaneous formulation of another of its key products as cancer drug Tecentriq Hybreza got a thumbs-up.Setting up Ocrevus Zunovo’s approval was a phase 3 study that showed its noninferiority to its original version as measured by the level of drug in the blood 12 weeks after administration. The injected formulation also matched the performance of the infused treatment in controlling magnetic resonance imaging lesion activity in the brain over 12 weeks.A later look at the OCARINA II study showed that 97% of patients on subcutaneous Ocrevus experienced no relapses for up to 48 weeks after injection. The subcutaneous treatment also suppressed brain lesions by 97%. Most patients had no T1 gadolinium-enhancing lesions or worsening T2 lesions, which are markers of active inflammation and burden of disease. Ocrevus Zunovo requires more medicine, at 920 mg per dosing, versus 600 mg for an infusion, which is “not really surprising because not all of the drug is going to be absorbed,” Jones said. Ocrevus is designed to target CD20-positive B cells, which are responsible for inflammatory damage to nerve cells in MS.Ocrevus Zunovo was developed using Halozyme Therapeutics’ Enhanze drug delivery technology, which employs an enzyme to allow large molecules like Ocrevus to be given under the skin.The hookup between the companies is well established as it paved the way for the Tecentriq Hybreza FDA nod as well as approvals for subcutaneous versions of Genentech’s blood cancer drug Rituxan Hycela and injectable cancer treatments Herceptin Hylecta and Phesgo. Ocrevus is currently Roche’s top-selling product, with 2023 sales reaching 6.38 billion Swiss francs ($7 billion), which was good for 13% growth over 2022 at constant exchange rates. Ocrevus holds about a 24% MS patient share across the U.S. and five largest European markets.Meanwhile, Kesimpta doubled sales in 2023 to $2.17 billion. The drug has secured new-to-brand share leadership in seven of the 10 major markets outside of the U.S., according to a Novartis report in January.The two CD20 antibodies are among the most expensive MS treatments. While Ocrevus carries a list price of $79,000 annually, Kesimpta goes for $83,000 per year before rebates and discounts.Another force in the MS market is Merck KGaA’s DMD treatment Mavenclad, which generated sales of $1.1 billion last year. Former MS blockbusters that have lost their market exclusivity in the last few years include Teva’s Copaxone, Sanofi’s Aubagio and Novartis’ Gilenya.