Merck & Co., Inc. Q3 FY2025 earnings call

• Continued progress using science to save and improve lives, strong pipeline with ~80 Phase III trials. • Pipeline advancements, approvals, new product launches. • In oncology: FDA approved subcutaneous pembrolizumab, CHMP positive opinion; presented oncology data at ESMO. • In vaccines: CAPVAXIVE approved in Japan, ENFLONSIA launched. • In immunology: Initiated Phase IIb trials for tulisokibart. • In cardiovascular: Positive results from CORALreef Lipids trial. • In pulmonary: Full results from HYPERION study reinforce WINREVAIR potential, FDA approval for WINREVAIR supplemental BLA. • Completed acquisition of Verona Pharma

Total company revenues were $17.3 billion, an increase of 4% or 3% excluding foreign exchange impact. Oncology: KEYTRUDA sales increased 8% to $8.1 billion, broader oncology portfolio strong with WELIREG sales up 41% to $196 million. Vaccines: GARDASIL sales $1.7 billion, down 25%; CAPVAXIVE sales $244 million, VAXNEUVANCE sales down 7%, ENFLONSIA sales $79 million. Cardiovascular: WINREVAIR global sales $360 million. Animal Health: Sales increased 7%, livestock sales up 14%, companion animal sales down 3%

2025 non-GAAP guidance: full year revenue between $64.5 billion and $65 billion (1%-2% growth excluding ~0.5% foreign exchange negative impact); gross margin assumption ~82%; operating expenses between $25.9 billion and $26.4 billion; other expense between $400 million and $500 million; tax rate 14%-15%; EPS guidance $8.93 to $8.98. KEYTRUDA U.S. fourth quarter growth negatively impacted by ~$200 million timing of wholesaler purchases; ENFLONSIA initial purchases were stocking ahead of expected usage. Expect acceleration in operating expense growth in 2026 driven by R&D and SG&A investments

Q: On BD, updated framing on what's being looked for.

A: Business development focus on key therapeutic areas, $1B - $15B deal size range, science drives, not done yet.

Q: Pipeline on TLL1 immunology.

A: Focus in GI, expanding to rheumatology and dermatology, Phase III for ulcerative colitis and Crohn's disease important.

Q: KEYTRUDA early-stage sales.

A: 10 approved indications, drivers include cervical, RCC, TNBC, non-small cell lung cancer, over half of growth.

Q: ENFLONSIA launch.

A: Initial stocking, feedback good, expect impact this season and 2026.

Q: MFN.

A: Aligned with administration goals, in continuing discussions, optimistic on constructive outcome.

Q: CADENCE trial.

A: Primary completion this year, top line to be put out once known.

Q: GARDASIL.

A: Important product, U.S. growth impacted by eligible population and ACIP recommendation, outside U.S. lap China and Japan impacts, expect modest growth.

Q: KEYTRUDA QLEX conversion.

A: Early in launch, expected 30%-40% patient adoption in 18-24 months, commercial strategy in place.

Q: EyeBio Phase III BRUNELLO.

A: Excited about MK-3000, leading cause of vision loss in diabetes, large commercial opportunity