Merck & Co., Inc. (NYSE:MRK) Q4 2022 Earnings Call Transcript

Caroline Litchfield: Thank you for the question. So the guidance that we provided for 2023 is underpinned by very strong revenue growth of 7% to 10% when you exclude the impact of LAGEVRIO as foreign exchange. The drivers of that growth are our key pillars of Oncology, where we expect continued impact to patients and growth driven the portfolio of indications we have in KEYTRUDA, Lynparza and Lenvima. Vaccines, as you rightly note, driven by an acceleration expected in the growth of GARDASIL as we have new supply coming on line, as well as an acceleration in our VAXNEUVANCE performance, especially given the strong data we have for the pediatric setting. And we expect continued growth strong growth in our Animal Health business.

There are some headwinds against that that we have talked about with LAGEVRIO with foreign exchange and with an increased level of pricing expected, especially in Europe with the changes we have seen in U.K. and also in Germany. But, overall, very confident in the underlying growth of our business anchored to Oncology, Vaccines and Animal Health. Dean?

Dr. Dean Li: Yeah. So, again, March 6th, clinical trial data for sotatercept will be more fully discussed. I think it will be very impactful data and I have no indication at this point that we will need a readout from any other trial from a clinical standpoint to support our filing to the FDA for 10%.

Rob Davis: Thank you, Terence. Next question please, Kelly.

Operator: Our next question comes from Colin Bristow from UBS. Colin, your line is open.

Colin Bristow: Hey. Good morning and thanks for taking the questions. I guess I will piggyback on a couple of the others. On TIGIT, we have obviously seen some competitive data recently and then we have some Phase 3 competitor readout this year. Just what is your level of enthusiasm for this class currently and just what underpins that in terms of the data we have seen? And then just second on GARDASIL, are you able to give any more granularity on the timing and levels of additional supply that will be coming online with respect to the new manufacturing facility? Thank you.

Dr. Dean Li: Yeah. Well, thank you for that question. In relationship to TIGIT, I mean, we are very confident on our molecule. As I have said, we have nine ongoing five Phase 3 trials. Pushing the boundaries of what pembro can do or PD-1 can do with another IO agent has been something that’s very important for the field. And the way that I can simply answer your question about the confidence the molecule is, we just opened an additional KEYVIBE study, a Phase 3 study in the earlier stages of cancer for this IO-IO combination.

Caroline Litchfield: And for GARDASIL, we — as you know, we have driven productivity in the existing manufacturing facilities we have and we have two new facilities coming online over the course of 2023, 2024. So it will be a progressive ramp, but I will reiterate we are expecting an acceleration in our growth during 2023.

Rob Davis: Great. Thank you, Colin. Next question please, Kelly.

Operator: Our next question comes from Umer Raffat from Evercore. Umer, your line is open.

Umer Raffat: Hi, guys. Thanks for taking my question. There was a story in New York Times last week, which mentioned Merck has a patent state of 180 patents on KEYTRUDA, and I am curious, since your 10-K only points to the earliest patent expiry date of 2028. Can you speak to the types of patents encompassed in this 180 patent estate and is it reasonable to assume that your true patent estate on KEYTRUDA goes well past 2035? Thank you.