Merck

Q2 2024 Earnings
July 30, 2024
Agenda

Strategy and Business/Financial Research Question & Answer

Business Update Results and Outlook Update Session

Rob Davis Caroline Litchfield Dr. Dean Li

Chairman and Chief Chief Financial Officer President, Merck
Executive Officer Research Laboratories

2
Forward-looking statement of Merck & Co., Inc.,
Rahway, N.J., USA

This presentation 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).

3
Strategy and
Business Update
Rob Davis
Chairman and Chief Executive Officer
Delivered on our key strategic priorities in Q2 2024

Advanced the pipeline to meet

patient unmet need

Executed on strategic business

development to augment pipeline

Achieved strong commercial and

financial performance

Created long-term value for patients

and shareholders

5
Significant progress over the past three years

Expanded and evolved our pipeline to drive future innovations

for patients

Reached more people globally with our medicines and vaccines

Drove innovation and productivity through integration of data,

digital and analytics

6
 Strong Q2 sales1 and earnings performance

Q2 Worldwide Sales Full Year Sales 70,000

GUIDANCE RANGE 60,000

$16.1B
$59.3B $60.1B $63.4B - $64.4B
$5.37 +22% +1% +5% - +7% 50,000

40,000

+7%
30,000

20,000
+11% ex-Exchange 2022 2023 2024

Q2 Non-GAAP EPS3 Full Year Non-GAAP EPS2

$2.28 $7.48

$1.51
GUIDANCE RANGE
$7.94 - $8.04

2022 2023 2024

1. Results from continuing operations attributable to Merck & Co., Inc. 2. Merck does not exclude charges for certain upfront payments related to collaborations and licensing agreements, or
charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions from its non-GAAP results. Second quarter of 2023 includes $4.02 per share of such charges. 7
Full year non-GAAP outlook for 2024 and full year reported results for 2023 and 2022 include $0.77, $6.21 and $0.22 per share of such charges, respectively. 3. GAAP EPS $2.14.
Advancing our broad pipeline

Cardiometabolic Vaccines Oncology

Diverse Portfolio
& Pipeline
Successful initial Recent FDA approval Presented data for
launch following U.S. and unanimous ACIP multiple novel
approval, and received recommendation in candidates at ASCO
positive CHMP opinion certain adult populations

8
Business/Financial
Results and Outlook
Caroline Litchfield
Chief Financial Officer
Strong Q2 worldwide sales growth

Merck
WORLDWIDE SALES1,2 Human Health Animal Health

$16.1B +7% growth

$14.4B
+7% growth
+11% ex-exchange3
$1.5B
+2% growth
+6% ex-exchange3

+11% ex-exchange3

1. Results attributable to Merck & Co., Inc. 2. Worldwide Sales includes Other Revenue.
3. ~2 percentage points of the negative impact of foreign exchange for Worldwide Sales and Human Health, and ~3 percentage points of the negative impact of foreign exchange 10
for Animal Health, was due to devaluation of the Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market.
Oncology: KEYTRUDA continues to drive excellent growth

• KEYTRUDA sales of $7.3B increased 21%1

year-over-year, driven by uptake in earlier
stage cancers and continued strong global
demand from metastatic indications
– In the U.S., increase reflects uptake from KN-671 $5.3B
and KN-091 in NSCLC, as well as uptake from +30%
KN-A39 in advanced urothelial cancer $7.3B
+21%
– Ex-U.S. growth reflects continued uptake in $4.2B
$6.3B
earlier stage cancers, including high-risk early- +20%
stage TNBC and adjuvant RCC, as well as demand +21%
from metastatic indications $5.3B
$3.4B
+30%
+31%

2Q22 2Q23 2Q24

Growth rates exclude the impact of foreign exchange. 11
1. ~4 percentage point 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.
Oncology: Strong performance across broad portfolio

$310M $317M
$275M +4%
+15%
• Lynparza1 sales grew 4%, driven primarily by +17%
higher demand in the U.S. and certain
international markets
2Q22 2Q23 2Q24
• Lenvima2 sales grew 4%, driven primarily by
higher demand in the U.S. $231M $242M $249M
+33% +6% +4%
• WELIREG sales more than doubled, driven
by increased uptake in certain patients with
previously treated advanced RCC 2Q22 2Q23 2Q24

$50M $126M
$181M
+89% +150%
$151M$27M
+15%
+57%
2Q22 2Q23 2Q24
Growth rates exclude the impact of foreign exchange. 12
1. In collaboration with AstraZeneca 2. In collaboration with Eisai
Vaccines: Growth driven by GARDASIL and VAXNEUVANCE

$1.7B
• GARDASIL sales of $2.5B increased 4% +40%
year-over-year $2.5B $2.5B
+53% +4%
– In the U.S., sales benefitted from price,
demand and favorable CDC purchasing $1.7B
patterns +40%
– Ex-U.S., sales were driven by higher demand
across several markets, partially offset by 2Q22 2Q23 2Q24
timing of shipments in China
$1.7B
+40%
• VAXNEUVANCE grew to $189M, driven
by ongoing launches in ex-U.S. markets
$189M
$168M
+16%
$12M

2Q22 2Q23 2Q24

Growth rates exclude the impact of foreign exchange. 13

Cardiovascular: Successful initial launch of WINREVAIR

• >2,000 patients prescribed in the quarter

Patients
• Across all prescriptions, ~75-80% of patients receive commercial product
• >1,000 patients started treatment in the quarter, largely reflecting
prescriptions written in April and May
• Takes ~1 month on average for patients to start therapy
$2.5B
+4%
$1.9B

Prescribers
• >500 physicians have written at least one prescription $1.7B
+27%
• Many prescribers are looking to gain experience with the product as they
+40%
prioritize patients who are in greatest need of additional therapy
• Most prescribers are from large academic centers or larger private practices
Sales of $70M1

• Many payors established coverage policies consistent with the label and
Payors

STELLAR criteria
• Other payors are in the process of developing policies

14
1. ~40% of sales were attributed to doses administered to patients, with the remainder due to distributors building inventory in support of increasing demand.
Animal Health: Growth driven by livestock

• Animal Health sales increased 6%1 to $1.5B

– Livestock sales grew 11%, driven by higher
demand for poultry and ruminant products, as
well as price
– Companion Animal growth reflects price, $1.5B $1.5B $1.5B
partially offset by reduction in distributor +5% +2% +6%
inventory

2Q22 2Q23 2Q24

Growth rates exclude the impact of foreign exchange. 15

1. ~3 percentage point 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.
Q2 2024 non-GAAP financial results summary1
$ in billions, except EPS amounts
Change
Q2 2024 Q2 2023 Change
Ex-FX

Sales $16.1 $15.0 +7% +11%

Non-GAAP Gross Margin 80.9% 76.6% +4.3pts +4.3pts

Non-GAAP Operating
Expenses
$6.2 $15.9 -61% -61%

Non-GAAP Tax Rate 14.1% -18.4% +32.5pts N/A

Non-GAAP Earnings /
(Loss) Per Share2,3
$2.28 ($2.06) N/M N/M

1. 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 16
to the earnings release. 2. Q2 2023 includes a charge of $10.2 billion, or $4.02 negative EPS impact, for the acquisition of Prometheus Biosciences. 3. Q2 2024 GAAP EPS of $2.14.
Updated 2024 financial outlook

Prior Guidance Updated Guidance Key Assumptions

• Assumes ~3 percentage point FX headwind

Revenue $63.1B to $64.3B $63.4B to $64.4B • Implies growth of 5% to 7%

Non-GAAP
Gross Margin Rate ~81.0% ~81.0%

• Includes incremental $1.5B of charges related to EyeBio

Non-GAAP
Operating Expenses1 $25.2B to $26.1B $26.8B to $27.6B acquisition and advancing assets, as well as investments in
progressing innovative pipeline

• Includes financing costs for the acquisitions of EyeBio and

Other (Income) / Expense ~$250M of expense ~$350M of expense Elanco’s aqua business

• Includes unfavorable impact from the non-tax deductible

Tax Rate ~14.5% to 15.5% ~15.5% to 16.5% upfront charge related to acquisition of EyeBio

Shares Outstanding ~2.55B ~2.54B • Assumes modest share repurchase

• Includes one-time ~$0.51 charge related to EyeBio

acquisition, as well as ~$0.09 to finance EyeBio and Elanco
Non-GAAP EPS $8.53 to $8.65 $7.94 to $8.04 aqua business acquisitions and advance the acquired assets
• Assumes more than $0.30 FX headwind in 2024

17
1. Guidance does not assume any additional significant potential business development transactions.
Key modeling considerations

CAPVAXIVE
• Received FDA approval and ACIP recommendation
• Commercial uptake will be enabled by milestones such as MMWR publication, which typically lags
ACIP recommendation by a few months, as well as payor coverage and customer contracting

GARDASIL
• Benefitted from extremely strong demand of GARDASIL in China over the past few years
• In 2Q there was a significant step down in shipments from Zhifei to points of vaccination compared
to prior quarters, resulting in higher inventory levels at Zhifei
• If shipments from Zhifei do not increase, it is likely that we will ship less than our full year 2024
contracted doses1 by the end of this year
• Opportunity in China remains very attractive as there are >120M females in the addressable
population living in Tier 1-5 cities have not yet received an HPV vaccination

WINREVAIR
• Received CHMP opinion and anticipate EMA approval in the coming months
• Reimbursement should occur in 2025 in most major markets, but expect Germany will receive
reimbursement and launch this year

18
1. Contracted doses in 2024 are less than the doses that were shipped in 2023
Remain committed to balanced capital allocation strategy
Q2 Spend ($ in billions)

Capital allocation order of priority

Continue to invest in the

pipeline and business while
augmenting the pipeline
$3.0
with value-enhancing
business development
$2.0

$0.7
$0.2 $0.3

After-Tax R&D 2 CapEx Dividends Business Share Repurchase

Paid Development
(ex-divestitures)
1. Reflects quarter spend
2. Reflects R&D excluding Business Development 19
Research Update
Dr. Dean Li
President, Merck Research Laboratories
Important progress across our immunization programs

Pneumococcal RSV

• Received FDA approval for CAPVAXIVE, a 21-valent • Announced positive topline results from Phase 2b/3
pneumococcal conjugate vaccine for adults, as well as trial evaluating clesrovimab, an investigational RSV
unanimous ACIP recommendation for certain adult preventative monoclonal antibody for infants
populations
• Study met primary efficacy and safety endpoints, as
• First approved pneumococcal conjugate vaccine well as secondary endpoint regarding RSV-associated
specifically designed to cover serotypes responsible for hospitalization
~85% of incidence of invasive pneumococcal disease in • Potential to provide a single, fixed-dose option to help
individuals 65 years and older1 protect healthy and high-risk infants from birth
through their first full RSV season
• Currently under review by EMA

21
1. According to CDC data from 2018-2021
Executing upon our oncology development strategy

Immuno-oncology Precision Molecular Tissue Targeting

Targeting

Boost anti-tumor immune Impact pathways that can drive Increase cancer cell sensitivity
responses cancer growth with ADCs and immune-
engagers

22
Continuing to harness the power of immuno-oncology

Recent KEYTRUDA Updates

• KEYNOTE-868: FDA approved KEYTRUDA in

combination with chemotherapy for treatment of
primary advanced or recurrent endometrial cancer
regardless of mismatch repair status
• KEYNOTE-522: Announced study demonstrated OS
Earlier Stage: Total: benefit in patients with high-risk early-stage TNBC
• KEYNOTE-811: Announced study met OS dual primary
9 approvals1 in distinct 40 approvals1 in distinct endpoint for treatment of 1L HER2-positive advanced
indications indications gastric or GEJ adenocarcinoma

4 studies with OS benefit 25 studies with OS benefit • KEYNOTE-483: FDA granted priority review for
KEYTRUDA in combination with chemotherapy for 1L
treatment of unresectable advanced or metastatic
malignant pleural mesothelioma (PDUFA September 25,
2024)

23
1. Represents approvals in the U.S.
Updates across precision and tissue targeting

Precision Molecular Targeting Tissue Targeting

• Exercised option to advance opevesostat1, an oral • Received positive CHMP opinion for KEYTRUDA
nonsteroidal CYP11A1 inhibitor in combination with Padcev for 1L treatment of
patients with unresectable or metastatic
• Two ongoing Phase 3 trials, OMAHA-1 and urothelial carcinoma based on KN-A39/EV-3022
OMAHA-2, evaluating opevesostat1 in
combination with hormone replacement therapy • FDA issued a Complete Response Letter for BLA
for treatment of certain patients with metastatic for patritumab deruxtecan3 for treatment of
prostate cancer certain adult patients with locally advanced or
metastatic EGFR-mutated NSCLC previously
treated with two or more systemic therapies

24
1. In collaboration with Orion 2. Trial conducted in collaboration with Seagen (now Pfizer) and Astellas 3. In collaboration with Daiichi Sankyo
Important developments across our diverse pipeline

Cardiometabolic Ophthalmology

• Received positive CHMP opinion for WINREVAIR • Completed acquisition of EyeBio

for treatment of PAH
• Restoret™/MK-3000 is an investigational,
• Anticipate European Commission decision on potentially first-in-class tetravalent tri-specific
marketing authorization application in 3Q 2024 Wnt antibody for treatment of diabetic
macular edema and neovascular age-related
macular degeneration
Restoret™/MK-30001:

25
Q&A
Rob Davis
Chairman & Chief Executive Officer

Caroline Litchfield
Chief Financial Officer

Dr. Dean Li
President, Merck Research Laboratories

Peter Dannenbaum
Senior Vice President, Investor Relations
Appendix

27
Q2 2024 GAAP financial results summary
$ in billions, EPS amounts

Q2 2024 Q2 2023 Change Change Ex-FX

Sales $16.1 $15.0 +7% +11%

Operating Expenses1 $6.2 $16.0 -61% -60%

Tax Rate 9.1% -11.9% -21.0pts N/A

GAAP Earnings /
$2.14 ($2.35) N/M N/M
(Loss) per Share1

28
1. 2Q23 GAAP results include $10.2 billion charge or $4.02 per share for the acquisition of Prometheus Biosciences
 Capital allocation: Trailing twelve months

Over the past 12 months

Order of priority
$12
Well-positioned balance sheet
$11.4
$9 with capacity to fund
Billions

$6 $7.6
$7.0
additional value-enhancing
business development
opportunities
$3
$3.5 $1.2
$0
After-Tax R&D 1 CapEx Dividends Paid Business Share
Development 2 Repurchase
(ex-divestitures)

Capital investments Commitment to the dividend

2024 to 2028

~ 16B
$
Over 5 years, including expanding
manufacturing capacity for Oncology, Vaccines,
and Animal Health. Includes >$9B in the U.S. E

1. Reflects R&D excluding Business Development

2. Includes BD payments reflected in operating cash flow 29
Driving value for patients and shareholders by progressing our pipeline

Key regulatory milestones since the last earnings call: Key data & clinical advancements since the last earnings call:

• In the U.S.: • Presented data across broad oncology portfolio at ASCO,

o FDA accepted for priority review the sBLA for KEYTRUDA in combination including for KEYTRUDA (KN-966, KN-859, KN-A39, KN-671,
with chemotherapy as first-line treatment of patients with unresectable KN-224, KN-629), mRNA-4157/V9402 (INT), vibostolimab
advanced or metastatic malignant pleural mesothelioma based on (anti-TIGIT), sacituzumab tirumotecan3 (TROP2 ADC), and
IND.227/KN-483 patritumab deruxtecan4 (HER3 ADC)
o FDA approved KEYTRUDA in combination with chemotherapy, followed by • Announced Phase 2b/3 trial evaluating clesrovimab (MK-1654)
KEYTRUDA as a single agent, for the treatment of adult patients with met its primary safety and efficacy endpoints, including
primary advanced or recurrent endometrial carcinoma based on NRG- reducing medically attended lower respiratory infections
GY018/KN-868 (MALRI) caused by RSV through Day 150
o FDA approved CAPVAXIVE for the prevention of invasive pneumococcal
disease and pneumococcal pneumonia in adults, and CDC’s ACIP • Announced Phase 3 KEYNOTE-811 and KEYNOTE-522 trials for
unanimously voted to recommend CAPVAXIVE as an option for certain KEYTRUDA met overall survival endpoints
adults • Advanced our broad pipeline, initiating Phase 3 trials across
• In the EU: multiple candidates including sacituzumab tirumotecan3 (MK-
o Received positive CHMP opinion for KEYTRUDA in combination with 2870, TROP2 ADC), enlicitide decanoate (MK-0616, PCSK9
Padcev for the first-line treatment of adult patients with unresectable or inhibitor), and tulisokibart (MK-7240, TL1A inhibitor)
metastatic urothelial carcinoma based on KN-A39/EV-3021
o Received positive CHMP opinion for WINREVAIR, in combination with
other PAH therapies, for the treatment of PAH in adult patients with
WHO FC II to III

1. Trial conducted in collaboration with Seagen (now Pfizer) and Astellas 2. In collaboration with Moderna
3. In collaboration with Kelun-Biotech 4. In collaboration with Daiichi Sankyo 30
Broad and innovative pipeline to address significant unmet medical needs
Phase 2 Phase 3 Under regulatory review

Oncology Oncology Oncology

MK-1022 (patritumab MK-2870 (sacituzumab MK-4280A WELIREG (MK-6482) MK-1022 (patritumab deruxtecan)6 MK-3475A (pembrolizumab KEYTRUDA (MK-3475)
deruxtecan)6 tirumotecan)7 (favezelimab+pembroliz Endometrial NSCLC (EU) +hyaluronidase) Resectable NSCLC (JPN)
Gastric Biliary umab) Esophageal MK-1026 (nemtabrutinib) NSCLC 1L Urothelial (EU, JPN)
HNSCC CRC Bladder HCC Hematological Malignancies Endometrial Carcinoma (EU, JPN)
Melanoma Neoplasm Malignant cSCC Prostate MK-4280A (favezelimab Cervical (EU, JPN)
Pancreatic Endometrial Rare Cancers MK-1084 +pembrolizumab) Mesothelioma (US, EU, JPN)
MK-1308 (quavonlimab) Esophageal NSCLC CRC
NSCLC KEYTRUDA (MK-3475) Melanoma MK-7684A MK-1022 (patritumab deruxtecan)6, 14
Advanced Solid Tumors (vibostolimab MK-1308A (quavonlimab Hematological Malignancies
RCC NSCLC (US)
MK-1308A Prostate +pembrolizumab) +pembrolizumab) MK-5684 (opevesostat)13
(quavonlimab MK-5890 (boserolimab) Bladder RCC Prostate WELIREG (MK-6482)
+pembrolizumab) MK-3475A (pembrolizumab + Neoplasm Malignant CRC
hyaluronidase) MK-2400 (ifinatamab deruxtecan)6 Certain VHL tumors (EU)
CRC Endometrial LYNPARZA (MK-7339)8 Advanced RCC (EU, JPN)
cSCC MK-5909 (raludotatug Melanoma SCLC NSCLC
MK-2140 (zilovertamab deruxtecan)6 Ovarian MK-2870 (sacituzumab tirumotecan)7 SCLC
vedotin) MK-4280
Ovarian Prostate Breast
Hematological (favezelimab) LENVIMA (MK-7902)9
Malignancies NSCLC LYNPARZA (MK-7339)8
RCC Cervical Esophageal General Medicine
Advanced Solid Tumors V94010 Gastric Gastric
Gefapixant (MK-7264)5
MK-2400 (ifinatamab Bladder Endometrial
LENVIMA (MK-7902)9 MK-7684A (vibostolimab Cough (US)
deruxtecan)6 cSCC NSCLC
Bladder HNSCC RCC +pembrolizumab)
CRC MK-3543 NSCLC Cardiometabolic
Endometrial (bomedemstat) SCLC WINREVAIR (MK-7962)
HNSCC Myeloproliferative Disorders
V94010 Pulmonary Arterial Hypertension (EU)
KEYTRUDA (MK-3475)
Vaccines Cardiometabolic Neuroscience Melanoma

V181 MK-2060
CSCC (EU)
Hepatocellular (EU)
NSCLC Vaccines
MK-81894
Dengue Virus Thrombosis Schizophrenia Ovarian CAPVAXIVE (V116)
SCLC Pneumococcal conjugate vaccine, adult (EU)
Infectious disease MK-5475 Immunology Immunization
PH-COPD
MK-8527 MK-6194 MK-1654 (clesrovimab)
HIV-1 prevention MK-6024 (efinopegdutide) Vitiligo
NASH Respiratory Syncytial Virus (RSV)
MK-8591B (islatravir+MK-8507)1 Ophthalmology
WINREVAIR (MK-7962)
HIV-1 infection
Pulmonary Hypertension due to Left Restoret™/MK-3000 Infectious disease
MK-8591D (islatravir+lenacapavir)2,11 Heart Disease Diabetic macular edema
MK-8591A (doravirine+islatravir)2 LAGEVRIO (MK-4482)3,12
HIV-1 infection HIV-1 Infection COVID-19 antiviral
1 On FDA clinical hold 2On FDA partial clinical hold for higher doses than those used in current clinical trials
3Available in the US under EUA 4Development is co-funded by Royalty Pharma 5FDA issued CRL in December 2023 Immunology Cardiometabolic
6In collaboration with Daiichi Sankyo 7In collaboration with Kelun-Biotech 8In collaboration with AstraZeneca 9In collaboration with Eisai
10In collaboration with Moderna 11In collaboration with Gilead 12Developed under an agreement with Ridgeback Bio 13In collaboration with Orion MK-7240 (tulisokibart) MK-0616 (enlicitide decanoate)
14FDA issued CRL in June 2024
Ulcerative Colitis Hypercholesterolemia As of July 30, 2024