Merck & Co., Inc. (NYSE:MRK) Q3 2023 Earnings Call Transcript

So that I think is a PDUFA date that’s coming up and that hopefully might be the 9th early-stage and I believe that PDUFA date is among like four that are coming up in the next six months in relationship to cancer. So Carticel gender neutral, but also cervical cancer being a critical driver and driving into earlier stage. Those are all things that play around what we are trying to do at Merck.

Rob Davis: Thanks for the question, Chris. We have time to take some additional questions and go past the hour. Julie, next question please.

Operator: Thank you. Our next question comes from Geoff Meacham with Bank of America. Your line is open.

Geoff Meacham: Hey, everyone. Thanks for the question. Question for Dean or even Rob on ADCs. So you guys have obviously done a number of deals, have partnered assets and clearly you think this approach is strategically important for Merck. So the question is how much of an investment is Merck making in building out a broader ADC platform in-house. I am just thinking beyond the partner programs, and especially, Dean, as you call out the IO paradigm is shifting earlier? Thank you.

Dr. Dean Li: Yeah. Thanks for that. I will grab that one. So we have been very lucky to partner with Kelun and Daiichi Sankyo and that advances our clinical programs at scale. We also clearly have collaborations with other ADC companies in relationship to KEYTRUDA. So we have a wall of data of understanding what we are hoping that the field might navigate towards. And like everyone has said there will be different antibodies, different antibodies structures to be able to change how one thinks about the tissue targeting component. There will be changes in terms of the linkers and for right now, there are probably two major payloads that people use microtubules based chemotherapy, as well as a TOPO1 based chemotherapy. I would just emphasize that there are only — there are not just two classes of chemotherapy out there for the last 30 years and each one has a reason why they are there.

So we have invested in an ADC platform that is separate, but we will build-off what is learn from our clinical programs both in the ones that we are doing with Daiichi Sankyo and Kelun, as well as those that we are doing when we are collaborating with others in relationship with KEYTRUDA. So we have built and we continue to build that expertise within the company and we hope to see those internal programs carrying its clinical head in the next couple of years.

Rob Davis: Thanks, Geoff. Next question please.

Operator: Thank you. Our next question comes from Steve Scala with TD Cowen. Your line is open.

Steve Scala: Thank you very much. What is VAXNEUVANCE’s share in pediatrics now and why hasn’t it seen an inflection in the U.S. sales in line with Merck’s prior comments that it held 30% share of the pediatric market with plans to grow from there. I mean, 30% share of a $6 billion market is a big number and it’s well-ahead of where current sales are landing. So any color would be appreciated? Thank you.

Rob Davis: Yeah. Steve, I will maybe jump on that and then others can jump in. But so your answer is we are in that low 30% share both in the public and private market. So that is what you are saying in the quarter. I think the U.S. roughly was about approaching $185 million to $200 million of total business or the products. So we are actually seeing growth pretty much consistent with what we expect and the share we got is pretty much what we expected. So we will have to think through how the disconnect in what you are seeing. But I can tell you, in fact, and we are doing exactly what we expected we would do.

Caroline Litchfield: This is Caroline. The only thing I’d add to that would be the performance we are also seeing outside of the U.S. So while we are early in our launch outside the U.S., we have gained 50% of the tenders in which we have participated and which being shares north of that one-third, so we are very confident in our ability to continue to drive VAXNEUVANCE and very much looking forward to augmenting our offering with V116 later next year.

Dr. Dean Li: Yeah. I would just add.

Rob Davis: Steve, let me just clarify one thing, because I think it’s important. I was just reflecting on your question just to clarify my comments. Its 30% is our exit share not overall of the year. So that’s an exit share, as we are seeing the business grow today.

Dr. Dean Li: Yeah. I wanted to just make a comment about VAXNEUVANCE in the setting of what Caroline said about V116. It’s essentially with VAXNEUVANCE and V16, what we are trying to do is to drive the precision medicine mindset to vaccine giving the right vaccine with the right set of serotypes to the right age group at the right time and we believe that that strategy is important for VAXNEUVANCE and to think about VAXNEUVANCE not just on its own, but in relationship to V116 and we have work cut out to us in relationship to a potential approval from the FDA, as well as we will have to speak to the ACIP, as we advance this concept of a precision medicine mindset to pneumococcal vaccination.

Rob Davis: Thanks, Steve. Next question please.

Operator: Thank you. Our next question comes from Evan Seigerman with BMO Capital Markets. Your line is open.

Evan Seigerman: Hi, all. Thank you so much for taking my question. I want to touch on MK-0616, so clearly prioritizing given the advancement into multiple Phase 3 trials. Maybe talk to me about the importance of an oral PCSK9. Given the dynamics we have seen in the injectable market with both the antibodies and other long-acting assets? Thank you so much.

Dr. Dean Li: Okay. I will take that was and I will give my homage to Helen Hubs and Jonathan Cohen at the UT Southwestern in Dallas Heart Study. That was really important data in relationship to showing PCSK9. And if you look at that patient population, that patient population is desperately in need of an oral potent LDL lowering cholesterol medicine and that’s what we are trying to provide. We are trying to democratize our pathway, such that people whether they are in the rural and the inner city or globally, can get this. And so I would just emphasize the other point, which is cardiovascular disease atherosclerotic disease is still the number one killer in the United States and the developed countries and lowering LDL is known to be important.

We used to talk about resistant or refractory, but my experience is that the level of LDL that you are going to have to drive to that increasingly the guidelines are taking is to is forget about whether you are refractory or resistant to stand, it will be very hard with one agents to get your LDL below 70 or below 55 in some patient populations. That patient population, you want to treat you want to have that treatment readily available with no cold-chain and no requirement to go into a hospital system to get it. That’s what we are trying to do and hopefully our data will support such a move.

Rob Davis: Great. Thanks Evan. Maybe final question please, Julie.

Operator: Thank you. Our next question comes from Mohit Bansal. Your line is open. With Wells Fargo.

Mohit Bansal: Great. Thank you very much and thanks for squeezing me in. I just wanted to touch upon among EGFR mutant patients, how are you thinking about a TROP2 ADC versus a HER3 ADC, because if you look at your data or even EV’s data, it seems like TROP2 seem to be working quite well among those AGA mutations, so how are you thinking about these two ADCs in that same indication?