0001104659-22-111729.txt : 20221027 0001104659-22-111729.hdr.sgml : 20221027 20221027063810 ACCESSION NUMBER: 0001104659-22-111729 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 18 CONFORMED PERIOD OF REPORT: 20221026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20221027 DATE AS OF CHANGE: 20221027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Merck & Co., Inc. CENTRAL INDEX KEY: 0000310158 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 221918501 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06571 FILM NUMBER: 221334806 BUSINESS ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 BUSINESS PHONE: 908-740-4000 MAIL ADDRESS: STREET 1: 2000 GALLOPING HILL ROAD CITY: KENILWORTH STATE: NJ ZIP: 07033 FORMER COMPANY: FORMER CONFORMED NAME: Merck & Co. Inc. DATE OF NAME CHANGE: 20091103 FORMER COMPANY: FORMER CONFORMED NAME: SCHERING PLOUGH CORP DATE OF NAME CHANGE: 19920703 8-K 1 tm2227726d1_8k.htm FORM 8-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported) October 27, 2022 (October 26, 2022)

 

Merck & Co., Inc.

(Exact name of registrant as specified in its charter)

 

New Jersey

(State or other jurisdiction

of incorporation)

 

1-6571

(Commission

File Number)

 

22-1918501

(I.R.S Employer

Identification No.)

 

126 East Lincoln Avenue, Rahway, NJ

(Address of principal executive offices)

 

07065

(Zip Code)

 

(Registrant’s telephone number, including area code) (908) 740-4000

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class  Trading Symbol(s)  Name of each exchange on which registered
       
Common Stock ($0.50 par value)  MRK  New York Stock Exchange
0.500% Notes due 2024  MRK 24  New York Stock Exchange
1.875% Notes due 2026  MRK/26  New York Stock Exchange
2.500% Notes due 2034  MRK/34  New York Stock Exchange
1.375% Notes due 2036  MRK 36A  New York Stock Exchange

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

The following information, including the exhibits hereto, is being furnished pursuant to this Item 2.02.

 

Incorporated by reference is a press release issued by Merck & Co., Inc. (“Merck”) on October 27, 2022, regarding earnings for the third quarter of 2022, attached as Exhibit 99.1. Also incorporated by reference is certain supplemental information not included in the press release, attached as Exhibit 99.2.

 

This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangment of Certiain Officers.

 

(b) Merck announced that Kenneth C. Frazier, the Executive Chairman of Merck’s Board of Directors (the “Board”) will retire from the Board, effective November 30, 2022. 

 

In addition, on October 26, 2022, the Board unanimously elected Robert M. Davis, Merck’s current Chief Executive Officer and President as well as a Director on the Board to serve as Chairman of the Board, effective December 1, 2022.

 

On October 26, 2022, the Company issued a press release announcing the foregoing.  The press release is attached as Exhibit 99.3 and incorporated herein by reference.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)       Exhibits    

 

  Exhibit 99.1   Press release issued October 27, 2022, regarding earnings for the third quarter of 2022
       
  Exhibit 99.2   Certain supplemental information not included in the press release
       
  Exhibit 99.3   Press release issued October 26, 2022, regarding the appointment of the Chairman of the Board of Directors
       
  Exhibit 104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    Merck & Co., Inc.
   
   
Date: October 27, 2022 By: /s/ Kelly E. W. Grez
    Kelly E. W. Grez
    Corporate Secretary

 

 

EX-99.1 2 tm2227726d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

News Release

FOR IMMEDIATE RELEASE

 

Merck Announces Third-Quarter 2022 Financial Results

 

·Third-Quarter Results Reflect Sustained Strong Business Momentum Across Key Growth Drivers as Well as Investment and Progress in the Pipeline

 

·Third-Quarter 2022 Worldwide Sales Were $15.0 Billion, an Increase of 14% From Third-Quarter 2021; LAGEVRIO Sales Were $436 Million; Growth Excluding LAGEVRIO Was 10%; Growth Excluding LAGEVRIO and the Impact From Foreign Exchange Was 14%; Sales Growth Favorably Impacted by COVID-19 Recovery

 

oKEYTRUDA Sales Grew 20% to $5.4 Billion; Excluding the Impact From Foreign Exchange, Sales Grew 26%

 

oGARDASIL/GARDASIL 9 Sales Grew 15% to $2.3 Billion; Excluding the Impact From Foreign Exchange, Sales Grew 20%

 

·Third-Quarter 2022 GAAP EPS From Continuing Operations Was $1.28; Non-GAAP EPS Was $1.85; GAAP and Non-GAAP EPS Include $0.22 of Charges Related to Collaboration and Licensing Agreements with Moderna, Orna and Orion

 

·Announced Positive Top-line Results From Pivotal Phase 3 STELLAR Trial Evaluating the Safety and Efficacy of Sotatercept

 

·2022 Continuing Operations Financial Outlook:

 

oCompany Raises and Narrows Expected Full-Year 2022 Worldwide Sales To Be Between $58.5 Billion and $59.0 Billion, Reflecting Full-Year Growth of 20% to 21%, Growth of Approximately 12% Excluding LAGEVRIO; Outlook Includes Negative Impact From Foreign Exchange of Approximately 4%

 

oCompany Lowers Expected Full-Year 2022 GAAP EPS To Be Between $5.68 and $5.73

 

oCompany Raises and Narrows Expected Full-Year 2022 Non-GAAP EPS To Be Between $7.32 and $7.37, Including Negative Impact From Foreign Exchange of Approximately 4%

 

- 2 -

 

RAHWAY, N.J., Oct. 27, 2022 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2022.

 

“We continue to execute on our strategy, invest in leading-edge science and drive innovation as our colleagues deliver meaningful value for patients – which in turn provides value for our shareholders,” said Robert M. Davis, chief executive officer and president, Merck. “Our third quarter results demonstrate exceptional revenue and underlying earnings growth and sustained performance across our key growth drivers. Inspired by our purpose of saving and improving lives around the world, I am confident we are well-positioned to continue to deliver strong operational performance.”

 

Financial Summary

 

  Third Quarter 
$ in millions, except EPS amounts  2022   2021   Change   Change
Ex-Exchange
 
Sales  $14,959   $13,154    14%   18%
GAAP net income1   3,248    4,567    -29%   -25%
Non-GAAP net income that excludes certain items1,2*   4,703    4,525    4%   7%
GAAP EPS   1.28    1.80    -29%   -25%
Non-GAAP EPS that excludes certain items2*   1.85    1.78    4%   7%

 

*Refer to table on page 11.

 

Generally accepted accounting principles (GAAP) earnings per share (EPS) assuming dilution was $1.28 for the third quarter of 2022. Non-GAAP EPS of $1.85 for the third quarter of 2022 excludes acquisition- and divestiture-related costs and restructuring costs, as well as income and losses from investments in equity securities. In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting. Results for 2021 have been recast to conform to the new presentation. For more information, refer to the Form 8-K filed by the company on April 21, 2022.

 

Year-to-date results can be found in the attached tables.

 

 

1 Net income from continuing operations attributable to Merck & Co., Inc.

2 Merck is providing certain 2022 and 2021 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, senior management’s annual compensation is derived in part using a non-GAAP pre-tax 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 to this release. Non-GAAP results for 2021 have been recast to conform to presentation changes implemented in 2022.

 

- 3 -

 

Cardiovascular pipeline highlights

 

·Merck announced positive results from its pivotal Phase 3 STELLAR trial evaluating sotatercept, the company’s investigational activin receptor type IIA-Fc fusion protein, as an add-on to stable background therapy for the treatment of adults with pulmonary arterial hypertension. The trial met its primary efficacy outcome measure, demonstrating a statistically significant and clinically meaningful improvement in six-minute walk distance (6MWD) from baseline at 24 weeks, and eight out of nine secondary efficacy outcome measures, including the outcome measure of proportion of participants achieving multicomponent improvement [defined as improvement in 6MWD, improvement in N-terminal pro-B-type natriuretic peptide level, and either improvement in WHO Functional Class (FC) or maintenance of WHO FC II] and the outcome measure of time to death or the first occurrence of a clinical worsening event. The Cognitive/Emotional Impacts domain score of PAH-SYMPACT®, which was assessed as the ninth and final secondary outcome measure, did not achieve statistical significance. Results will be presented at an upcoming scientific congress.

 

·Merck received a Fast Track designation from the U.S. Food and Drug Administration (FDA) for MK-2060, an investigational anticoagulant therapy for the reduction in risk of major thrombotic cardiovascular events in patients with end-stage renal disease.

 

Oncology program highlights

 

·Merck announced clinical trial results for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy, and Lynparza (olaparib), an oral poly (ADP-ribose) PARP inhibitor being co-developed and co-commercialized with AstraZeneca, at the European Society for Medical Oncology Congress 2022, including:

 

oFive-year overall survival (OS) data from the pivotal Phase 3 KEYNOTE-189 trial (KEYTRUDA plus pemetrexed and either cisplatin or carboplatin) in patients with metastatic nonsquamous non-small cell lung cancer (NSCLC) and the Phase 3 KEYNOTE-407 trial (KEYTRUDA plus carboplatin-paclitaxel or nab-paclitaxel) in patients with metastatic squamous NSCLC.

 

oIn collaboration with Seagen and Astellas, the first presentation of data from Cohort K of the Phase 1b/2 EV-103/KEYNOTE-869 trial evaluating Padcev (enfortumab vedotin-ejfv) in combination with KEYTRUDA as first-line treatment for patients with cisplatin-ineligible unresectable locally advanced or metastatic urothelial cancer.

 

- 4 -

 

oSeven-year OS data from the Phase 3 SOLO-1 trial evaluating Lynparza as maintenance treatment in patients with advanced BRCA-mutated ovarian cancer, following first-line platinum-based chemotherapy, and final OS results from the Phase 3 PAOLA-1 trial evaluating Lynparza in combination with bevacizumab as maintenance treatment in patients with advanced ovarian cancer who were without evidence of disease after surgery or following response to platinum-based chemotherapy. The results of both trials were clinically meaningful in certain types of patients, but did not reach statistical significance.

 

·Merck announced that KEYTRUDA received four new approvals in Japan; KEYTRUDA is now approved in Japan for 23 uses in 11 different types of cancer, plus microsatellite instability-high (MSI-H) and tumor mutational burden-high solid tumors.

 

·Merck announced the following regulatory milestones for Lynparza:

 

oPriority review granted by the FDA for a supplemental New Drug Application for Lynparza in combination with abiraterone and prednisone or prednisolone for patients with metastatic castration-resistant prostate cancer (mCRPC), based on results from the Phase 3 PROpel trial. The Prescription Drug User Fee Act (PDUFA) date is in the fourth quarter of 2022.

 

oApproved in the European Union (EU) and Japan as adjuvant treatment for patients with germline BRCA-mutated, HER2-negative high-risk early breast cancer, based on results from the Phase 3 OlympiA trial.

 

oApproved in China as first-line maintenance treatment with bevacizumab for patients with homologous recombination deficient-positive advanced ovarian cancer, based on results from the Phase 3 PAOLA-1 trial.

 

·Merck provided updates on three Phase 3 trials: KEYNOTE-412, KEYNOTE-921 and LEAP-002.

 

Vaccines program highlights

 

·Merck announced European Commission approval of an expanded indication for VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine) to include active immunization for the prevention of invasive disease, pneumonia and acute otitis media caused by Streptococcus pneumoniae (S. pneumoniae) in infants, children and adolescents from 6 weeks to less than 18 years of age.

 

·Merck received approval from China’s National Medical Products Administration to expand the use of GARDASIL 9 [Human Papillomavirus (HPV) 9-valent Vaccine, Recombinant] for use in girls and women ages 9 to 45. The vaccine was previously approved for use in women ages 16 to 26.

 

- 5 -

 

Infectious diseases pipeline highlights

 

·Merck will initiate a new Phase 3 clinical program with islatravir for the treatment of people with HIV-1 infection. These new Phase 3 studies will evaluate a once-daily oral combination of doravirine 100 mg and islatravir (DOR/ISL) 0.25 mg.

 

·Merck and Gilead Sciences will resume the Phase 2 clinical trial evaluating an investigational oral once-weekly combination treatment regimen of islatravir and Gilead’s lenacapavir in adults with HIV-1 infection who are virologically suppressed.

 

·Merck and Ridgeback Biotherapeutics (Ridgeback) provided an update on a preliminary analysis of the University of Oxford’s open label prospective real-world evidence study, PANORAMIC, of LAGEVRIO (molnupiravir).

 

Business development highlights

 

·Merck and Moderna, Inc. (Moderna) announced that Merck has exercised its option to jointly develop and commercialize personalized cancer vaccine mRNA-4157/V940 pursuant to the terms of its existing collaboration and license agreement. mRNA-4157/V940 is currently being evaluated in combination with KEYTRUDA as adjuvant treatment for patients with high-risk melanoma in a Phase 2 clinical trial being conducted by Moderna.

 

·Merck and Orna Therapeutics (Orna) announced a collaboration agreement to discover, develop and commercialize multiple programs, including vaccines and therapeutics in the areas of infectious diseases and oncology. This collaboration will combine Merck’s expertise in nucleic acid biology, clinical development, and manufacturing with Orna’s circular RNA technology.

 

·Merck and Orion Corporation (Orion) formed a global development and commercialization agreement for Orion’s investigational candidate ODM-208/MK-5684 and other drugs targeting cytochrome P450 11A1 (CYP11A1), an enzyme important in steroid production. ODM-208/MK-5684 is an oral, non-steroidal inhibitor of CYP11A1 currently being evaluated in a Phase 2 clinical trial for the treatment of patients with mCRPC.

 

·Merck acquired Vence, an innovator in virtual fencing for rotational grazing and livestock management, which complements Merck Animal Health’s broad portfolio of veterinary pharmaceuticals, vaccines and animal intelligence solutions.

 

- 6 -

 

Environmental, Social and Governance (ESG) highlights

 

·Merck issued its 2021/2022 ESG Progress Report, highlighting the company’s performance and progress in ESG efforts across four main focus areas: Access to Health, Employees, Environmental Sustainability and Ethics & Values. These efforts come as part of a long-standing commitment to operating responsibly and creating value for patients and shareholders.

 

·Merck launched the Alliance for Equity in Cancer Care, an initiative to advance equity in cancer care in the U.S. by helping patients living in underserved communities receive timely access to high-quality, culturally responsive care.

 

·Merck was recognized on Fortune’s 2022 Change the World list for its work to make HPV vaccines broadly available in underserved countries through partnerships and manufacturing investments.

 

- 7 -

 

Third-quarter revenue performance

 

The following table reflects sales of the company’s top pharmaceutical products, as well as sales of Animal Health products.

 

   Third Quarter 
$ in millions   2022    2021    Change    Change
Ex-Exchange
 
Total Sales  $14,959   $13,154    14%   18%
Pharmaceutical   12,963    11,496    13%   19%
KEYTRUDA   5,426    4,534    20%   26%
GARDASIL / GARDASIL 9   2,294    1,993    15%   20%
JANUVIA / JANUMET   1,133    1,339    -15%   -9%
PROQUAD, M-M-R II and VARIVAX   668    661    1%   3%
LAGEVRIO   436    0    -    - 
BRIDION    423    369    15%   22%
Lynparza*   284    246    16%   23%
ROTATEQ   256    227    12%   16%
Lenvima*   202    188    7%   11%
SIMPONI   173    203    -15%   -2%
Animal Health   1,371    1,417    -3%   4%
Livestock   829    864    -4%   4%
Companion Animals   542    553    -2%   4%
Other Revenues**   625    241    ***    41%

 

 *Alliance revenue for this product represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. 

**Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including 

revenue-hedging activities. 

***>100%

 

Pharmaceutical revenue

 

Third-quarter pharmaceutical sales increased 13% to $13.0 billion. Pharmaceutical sales growth in the third quarter was 9% excluding LAGEVRIO sales and 15% excluding LAGEVRIO sales and the impact of foreign exchange, primarily driven by oncology, vaccines and hospital acute care products. The COVID-19 pandemic unfavorably affected sales in the third quarter of 2021 by approximately $350 million, which favorably impacted the growth rate in the third quarter of 2022.

 

Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 20% to $5.4 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from metastatic indications including certain types of NSCLC, renal cell carcinoma, head and neck squamous cell carcinoma, triple-negative breast cancer (TNBC) and MSI-H cancers, and increased uptake across recent earlier-stage launches including certain types of neoadjuvant/adjuvant TNBC in the U.S.

 

- 8 -

 

Growth in vaccines was primarily driven by higher combined sales of GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) and GARDASIL 9 vaccines to prevent certain cancers and other diseases caused by HPV. Third-quarter GARDASIL/GARDASIL 9 sales grew 15% to $2.3 billion, primarily driven by strong demand outside of the U.S., particularly in China, which also benefited from increased supply. Additionally, higher sales in the U.S. reflect public sector buying patterns. Growth in vaccines was partially offset by lower sales of PNEUMOVAX 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, which declined 53% to $131 million primarily reflecting lower U.S. demand as the market continues to shift toward newer adult pneumococcal conjugate vaccines.

 

Growth in hospital acute care reflects higher demand globally for BRIDION (sugammadex) injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults and pediatric patients ages 2 years and older undergoing surgery. Sales increased 15% to $423 million, primarily due to an increase in its share among neuromuscular blockade reversal agents and an increase in surgical procedures. Growth in hospital acute care also reflects higher sales of ZERBAXA (ceftolozane and tazobactam), a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of adults with certain bacterial infections. Sales of $43 million resulted from the phased resupply initiated in the fourth quarter of 2021, which has been completed in 2022.

 

Pharmaceutical sales growth was partially offset by lower combined sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI), which declined 15% to $1.1 billion, primarily reflecting lower demand and pricing in certain international markets as a result of generic competition, particularly in Europe, and lower demand in the U.S. The company lost market exclusivity for JANUVIA and JANUMET in China in July and in the EU in September, although JANUMET currently continues to have exclusivity in certain European markets.

 

Animal Health revenue

 

Animal Health sales totaled $1.4 billion for the third quarter of 2022, a decline of 3% compared with the third quarter of 2021. Excluding the unfavorable effect from foreign exchange, Animal Health sales grew 4% primarily reflecting higher pricing. Sales of livestock products also reflect higher demand for poultry products. Sales of companion animal products also reflect higher demand for the BRAVECTO (fluralaner) parasiticide line of products, partially offset by supply constraints for certain vaccines.

 

- 9 -

 

Third-quarter expense information

 

The tables below present selected expense information.

 

$ in millions
Third Quarter 2022
  GAAP   Acquisition-
and
Divestiture-
Related
Costs
3
   Restructuring
Costs
   (Income)
Loss from
Investments
in Equity
Securities
   Non-
GAAP
2
 
Cost of sales  $3,934   $446   $      54   $-   $3,434 
Selling, general and administrative   2,520    22    26    -    2,472 
Research and development   4,399    902    1    -    3,496 
Restructuring costs   94    -    94    -    - 
Other (income) expense, net   429    (26)   -    350    105 

 

                         
Third Quarter 2021                         
Cost of sales  $3,450   $346   $48   $-   $3,056 
Selling, general and administrative   2,336    61    5    -    2,270 
Research and development   2,445    48    8    -    2,389 
Restructuring costs   107    -    107    -    - 
Other (income) expense, net   (450)   (10)   -    (684)   244 

 

GAAP expense, EPS and related information

 

Gross margin was 73.7% for the third quarter of 2022 compared to 73.8% for the third quarter of 2021. The decrease primarily reflects the impacts of higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins, as well as higher acquisition- and divestiture-related costs. The gross margin decline was largely offset by the favorable effects of product mix and foreign exchange.

 

Selling, general and administrative (SG&A) expenses were $2.5 billion in the third quarter of 2022, an increase of 8% compared to the third quarter of 2021. The increase primarily reflects higher administrative costs, including compensation and benefit costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange.

 

Research and development (R&D) expenses were $4.4 billion in the third quarter of 2022 compared to $2.4 billion in the third quarter of 2021. The increase primarily reflects $887 million of intangible asset impairment charges related to the ArQule, Inc. acquisition, charges related to collaboration and licensing agreements with Moderna, Orna and Orion and higher clinical development spending.

 

 

3 Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions, intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs related to acquisitions and divestitures.

 

- 10 -

 

 

Other (income) expense, net, was $429 million of expense in the third quarter of 2022 compared to $450 million of income in the third quarter of 2021, primarily due to net unrealized losses from investments in equity securities in the third quarter of 2022, compared to net unrealized income from investments in equity securities in the third quarter of 2021. Other (income) expense, net, in the third quarter of 2022 also reflects lower pension costs compared to the third quarter of 2021.

 

The effective income tax rate was 9.2% for the third quarter of 2022 compared to 13.2% in the third quarter of 2021.

 

GAAP EPS was $1.28 for the third quarter of 2022 compared to $1.80 for the third quarter of 2021.

 

Non-GAAP expense, EPS and related information

 

Non-GAAP gross margin was 77.0% for the third quarter of 2022 compared to 76.8% for the third quarter of 2021. The increase in non-GAAP gross margin primarily reflects the favorable effects of product mix and foreign exchange, largely offset by the impacts of higher revenue from third-party manufacturing arrangements and sales of LAGEVRIO, both of which have lower gross margins.

 

Non-GAAP SG&A expenses were $2.5 billion in the third quarter of 2022, an increase of 9% compared to the third quarter of 2021. The increase primarily reflects higher administrative costs, including compensation and benefit costs, as well as higher promotional spending, partially offset by the favorable impact of foreign exchange.

 

Non-GAAP R&D expenses were $3.5 billion in the third quarter of 2022 compared to $2.4 billion in the third quarter of 2021. The increase primarily reflects charges related to collaboration and licensing agreements with Moderna, Orna and Orion and higher clinical development spending.

 

Non-GAAP other (income) expense, net, was $105 million of expense in the third quarter of 2022 compared to $244 million of expense in the third quarter of 2021, reflecting lower pension costs.

 

The non-GAAP effective income tax rate was 13.6% for the third quarter of 2022 compared to 12.8% in the third quarter of 2021.

 

- 11 -

 

Non-GAAP EPS was $1.85 for the third quarter of 2022 compared to $1.78 for the third quarter of 2021.

 

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

 

   Third Quarter 
$ in millions, except EPS amounts  2022   2021 
EPS          
GAAP EPS  $1.28   $1.80 
Difference   0.57    (0.02)
Non-GAAP EPS that excludes items listed below2  $1.85   $1.78 
           
Net Income          
GAAP net income1  $3,248   $4,567 
Difference   1,455    (42)
Non-GAAP net income that excludes items listed below1,2  $4,703   $4,525 
           
Decrease (Increase) in Net Income Due to Excluded Items:          
Acquisition- and divestiture-related costs3  $1,344   $445 
Restructuring costs   175    168 
Loss (income) from investments in equity securities   350    (684)
Net decrease (increase) in income before taxes   1,869    (71)
Estimated income tax (benefit) expense   (414)   29 
Decrease (increase) in net income  $1,455   $(42)

 

Financial outlook

 

Beginning in 2022, Merck no longer excludes expenses for upfront and milestone payments related to collaboration and licensing agreements, or charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions from its non-GAAP results. Historically, the company excluded these charges to the extent they were considered by the company to be significant to the results of a particular period. These changes were made to align with views expressed by the U.S. Securities and Exchange Commission. Prior periods have been recast to reflect this change. For 2021, non-GAAP results have been recast to include $1.7 billion of incremental R&D expense, resulting in revised full-year 2021 EPS of $5.37.

 

Full-year 2022 GAAP and non-GAAP results include $690 million of incremental R&D expense, recorded in the third quarter of 2022, for collaboration and licensing agreements with Moderna, Orna and Orion which negatively impacts expected full-year EPS by $0.22.

 

As an on-going practice, the financial outlook will not include significant potential business development transactions.

 

- 12 -

 

Merck continues to experience strong global momentum across its key pillars of growth, particularly in oncology and vaccines. As a result, Merck is raising and narrowing its full-year outlook for sales and non-GAAP EPS, despite a negative impact from foreign exchange.

 

At mid-October 2022 exchange rates, Merck expects sales growth of 20% to 21% in 2022, with full-year sales estimated to be between $58.5 billion and $59.0 billion, including a negative impact from foreign exchange of approximately 4%, including a less than 1% incremental negative impact from prior sales outlook. Excluding LAGEVRIO, Merck expects sales growth of approximately 12% for full-year 2022.

 

Merck expects its full-year non-GAAP effective income tax rate to be approximately 14%.

 

Merck is lowering its expected full-year 2022 GAAP EPS to be between $5.68 and $5.73.

 

Merck is raising and narrowing its expected full-year 2022 non-GAAP EPS to be between $7.32 and $7.37, including a negative impact from foreign exchange of approximately 4% at mid-October exchange rates. Operational strength of approximately $0.20 is partially offset by the following negative impacts, which were not reflected previously in the outlook:

 

oAn option payment to Moderna of $250 million

 

oA less than 1% incremental impact from foreign exchange

 

The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs as well as income and losses from investments in equity securities.

 

The company is narrowing its expected full year sales range of LAGEVRIO to be between $5.2 billion and $5.4 billion. Merck shares profits equally with its partner, Ridgeback, which is reflected in cost of sales.

 

The following table summarizes the company’s full-year 2022 financial outlook.

 

   GAAP  Non-GAAP2
Sales  $58.5 to $59.0 billion  $58.5 to $59.0 billion*
Operating expenses  $22.5 to $22.9 billion  $21.3 to $21.7 billion
Effective tax rate  Approximately 11%  Approximately 14%
EPS**  $5.68 to $5.73  $7.32 to $7.37

 

*The company does not have any non-GAAP adjustments to sales.

**EPS outlook for 2022 assumes a share count (assuming dilution) of approximately 2.54 billion shares.

 

- 13 -

 

A reconciliation of anticipated full-year 2022 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

 

$ in millions, except EPS amounts  Full-Year 2022
GAAP EPS  $5.68 to $5.73
Difference  $1.64
Non-GAAP EPS that excludes items listed below2  $7.32 to $7.37
    
Acquisition- and divestiture-related costs  $3,400
Restructuring costs  600
(Income) loss from investments in equity securities  1,350
Net decrease (increase) in income before taxes  5,350
Estimated income tax (benefit) expense  (1,175)
Decrease (increase) in net income  $4,175

 

Earnings conference call

 

Investors, journalists and the general public may access a live audio webcast of the call Thursday, Oct. 27, at 8:00 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results, will be available at www.merck.com.

 

Participants may join the call by dialing (877) 692-8955 (USA Toll-Free) or (243) 720-6979 (USA Caller Paid). If you are calling from other countries, visit this weblink. All dial-in participants can use the access code 9646315. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team.

 

About Merck

 

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

 

- 14 -

 

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA

 

This news release 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 the global outbreak of novel coronavirus disease (COVID-19); 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, 2021 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

 

###

 

Media Contacts: Melissa Moody Investor Contacts: Peter Dannenbaum
  (215) 407-3536  

(908) 740-1037

 

 

Johanna Herrmann

(617) 216-6029

 

Steven Graziano

(908) 740-6582

 

 

- 15 -

 

 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1

 

On June 2, 2021, Merck completed the spin-off of products from its women’s health, biosimilars and established brands businesses into a new, independent, publicly traded company named Organon & Co. (Organon). The historical results of the businesses that were contributed to Organon in the spin-off are excluded from sales and expenses and reflected as discontinued operations in the company’s Consolidated Statement of Income provided below.

 

   GAAP       GAAP     
   3Q22   3Q21   % Change   Sep YTD
2022
   Sep YTD
2021
   % Change 
Sales  $14,959   $13,154    14%  $45,453   $35,183    29%
                               
Costs, Expenses and Other                              
Cost of sales   3,934    3,450    14%   13,530    9,752    39%
Selling, general and administrative   2,520    2,336    8%   7,355    6,804    8%
Research and development   4,399    2,445    80%   9,773    9,177    6%
Restructuring costs   94    107    -12%   288    487    -41%
Other (income) expense, net   429    (450)   *    1,576    (1,007)   * 
Income from Continuing Operations Before Taxes   3,583    5,266    -32%   12,931    9,970    30%
Income Tax Provision   330    695         1,423    1,436      
Net Income from Continuing Operations   3,253    4,571    -29%   11,508    8,534    35%
Less: Net Income Attributable to Noncontrolling Interests   5    4         6    9      
Net Income from Continuing Operations Attributable to Merck & Co., Inc.   3,248    4,567    -29%   11,502    8,525    35%
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests   -    -    0%   -    766    * 
Net Income Attributable to Merck & Co., Inc.  $3,248   $4,567    -29%  $11,502   $9,291    24%
                               
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:                              
Income from Continuing Operations  $1.28   $1.81    -29%  $4.55   $3.37    35%
Income from Discontinued Operations   -    -    0%   -    0.30    * 
Net Income  $1.28   $1.81    -29%  $4.55   $3.67    24%
                               
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:                              
Income from Continuing Operations  $1.28   $1.80    -29%  $4.53   $3.36    35%
Income from Discontinued Operations   -    -    0%   -    0.30    * 
Net Income  $1.28   $1.80    -29%  $4.53   $3.66    24%
                               
Average Shares Outstanding   2,533    2,530         2,531    2,531      
Average Shares Outstanding Assuming Dilution   2,542    2,536         2,540    2,539      
Tax Rate from Continuing Operations   9.2%   13.2%        11.0%   14.4%     

 

* 100% or greater                                                

 

- 16 -

 

MERCK & CO., INC.

THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2022 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2a

 

   GAAP   Acquisition and
Divestiture-Related
Costs
(1)
   Restructuring
Costs
(2)
   (Income) Loss
from
Investments
in Equity Securities
 
  Adjustment
Subtotal
   Non-GAAP 
Third Quarter                              
Cost of sales  $3,934    446    54         500   $3,434 
Selling, general and administrative   2,520    22    26         48    2,472 
Research and development   4,399    902    1         903    3,496 
Restructuring costs   94         94         94    - 
Other (income) expense, net   429    (26)        350    324    105 
Income from Continuing Operations Before Taxes   3,583    (1,344)   (175)   (350)   (1,869)   5,452 
Income Tax Provision (Benefit)   330    (302)(3)   (35)(3)   (77)(3)   (414)   744 
Net Income from Continuing Operations   3,253    (1,042)   (140)   (273)   (1,455)   4,708 
Net Income from Continuing Operations Attributable to Merck & Co., Inc.   3,248    (1,042)   (140)   (273)   (1,455)   4,703 
Earnings per Common Share Assuming Dilution from Continuing Operations  $1.28    (0.40)   (0.06)   (0.11)   (0.57)  $1.85 
                               
Tax Rate   9.2%                       13.6%
                               
Sep YTD                              
Cost of sales  $13,530    1,577    167         1,744   $11,786 
Selling, general and administrative   7,355    137    74         211    7,144 
Research and development   9,773    936    30         966    8,807 
Restructuring costs   288         288         288    - 
Other (income) expense, net   1,576    (138)        1,268    1,130    446 
Income from Continuing Operations Before Taxes   12,931    (2,512)   (559)   (1,268)   (4,339)   17,270 
Income Tax Provision (Benefit)   1,423    (587)(3)   (97)(3)   (281)(3)   (965)   2,388 
Net Income from Continuing Operations   11,508    (1,925)   (462)   (987)   (3,374)   14,882 
Net Income from Continuing Operations Attributable to Merck & Co., Inc.   11,502    (1,925)   (462)   (987)   (3,374)   14,876 
Earnings per Common Share Assuming Dilution from Continuing Operations  $4.53    (0.76)   (0.18)   (0.39)   (1.33)  $5.86 
                               
Tax Rate   11.0%                       13.8%

 

Only the line items that are affected by non-GAAP adjustments are shown.
 
Merck is providing certain 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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures 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, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.
 
(1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures.  Amounts included in research and development expenses for the third quarter and nine month period primarily reflect $887 million of intangible asset impairment charges related to the ArQule, Inc. acquisition and expenses for the amortization of intangible assets.  Amounts included in other (income) expense, net, for the third quarter and nine month period primarily reflect royalty income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture.  
(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs.
(3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.  

- 17 -

 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3

 

   2022  2021  3Q   September YTD 
   1Q  2Q  3Q  Sep YTD  1Q  2Q  3Q  Sep  YTD  4Q  Full Year  Nom %  Ex-Exch %  Nom %  Ex-Exch % 
TOTAL SALES (1)   $15,901  $14,593  $14,959  $45,453  $10,627  $11,402  $13,154  $35,183  $13,521  $48,704   14   18   29  32 
PHARMACEUTICAL   14,107   12,756   12,963   39,826   9,238   9,980   11,496   30,714   12,039   42,754   13   19   30  35 
Oncology                                                        
Keytruda   4,809   5,252   5,426   15,487   3,899   4,176   4,534   12,609   4,577   17,186   20   26   23  28 
Alliance Revenue – Lynparza (2)   266   275   284   825   228   248   246   721   268   989   16   23   14  20 
Alliance Revenue – Lenvima (2)   227   231   202   660   130   181   188   498   206   704   7   11   33  36 
Alliance Revenue – Reblozyl (3)   52   33   39   124                   17   17   *   *   *  * 
Vaccines (4)                                                        
Gardasil / Gardasil 9   1,460   1,674   2,294   5,428   917   1,234   1,993   4,144   1,528   5,673   15   20   31  35 
ProQuad / M-M-R II / Varivax   470   578   668   1,716   449   516   661   1,626   509   2,135   1   3   6  7 
RotaTeq   216   173   256   644   158   208   227   593   213   807   12   16   9  11 
Pneumovax 23   173   153   131   457   171   152   277   600   292   893   -53   -50   -24  -21 
Vaqta   36   35   64   134   34   56   48   138   41   179   33   34   -3  -2 
Hospital Acute Care                                                        
Bridion   395   426   423   1,244   340   387   369   1,096   436   1,532   15   22   13  19 
Prevymis   94   103   114   310   82   93   96   270   100   370   19   29   15  22 
Dificid   52   66   77   196   27   34   54   115   60   175   42   42   70  70 
Primaxin   58   64   63   185   65   60   70   194   65   259   -9   -5   -5  -3 
Noxafil   57   60   62   180   67   66   64   197   62   259   -3   5   -9  -3 
Invanz   52   46   50   148   57   48   53   157   45   202   -7   -1   -6  -1 
Cancidas   53   42   43   138   57   54   56   168   45   212   -24   -19   -18  -15 
Zerbaxa   30   46   43   120   (8)  (1)  (2)  (11)  10   (1)  *   *   *  * 
Cardiovascular                                                        
Alliance Revenue - Adempas/Verquvo (5)   72   98   88   258   74   74   100   248   94   342   -12   -12   4  4 
Adempas (6)   61   63   57   181   55   74   59   188   63   252   -5   12   -4  8 
Virology                                                        
Lagevrio   3,247   1,177   436   4,859                   952   952   *   *   *  * 
Isentress / Isentress HD   158   147   161   466   209   192   189   590   178   769   -15   -11   -21  -17 
Neuroscience                                                        
Belsomra   69   69   62   199   79   78   81   238   80   318   -24   -12   -16  -7 
Immunology                                                        
Simponi   186   181   173   540   214   202   203   619   206   825   -15   -2   -13  -2 
Remicade   61   53   49   163   85   75   73   233   67   299   -33   -22   -30  -21 
Diabetes (7)                                                        
Januvia   779   756   717   2,252   809   784   852   2,445   878   3,324   -16   -10   -8  -3 
Janumet   454   476   417   1,347   486   477   487   1,449   514   1,964   -14   -7   -7  -1 
Other Pharmaceutical (8)   520   479   564   1,565   554   512   518   1,589   533   2,118   9   17   -1  3 
                                                         
ANIMAL HEALTH   1,482   1,467   1,371   4,320   1,418   1,472   1,417   4,307   1,261   5,568   -3   4   -  6 
Livestock   832   826   829   2,486   819   821   864   2,503   791   3,295   -4   4   -1  6 
Companion Animals   650   641   542   1,834   599   651   553   1,804   470   2,273   -2   4   2  6 
                                                         
Other Revenues (9)   312   370   625   1,307   (29)  (50)  241   162   221   382   159   41   *  * 

 

* 200% or greater

 

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

 

(1) Only select products are shown.

 

(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

 

(3) Alliance Revenue represents royalties and a milestone payment.

 

(4) Total Vaccines sales were $2,481 million, $2,709 million and $3,552 million in the first, second and third quarter of 2022, respectively, and $1,809 million, $2,293 million, $3,315 million and $2,715 million in the first, second, third and fourth quarter of 2021, respectively.

 

(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

 

(6) Net product sales in Merck's marketing territories.

 

(7) Total Diabetes sales were $1,305 million, $1,300 million and $1,231 million in the first, second and third quarter of 2022, respectively, and $1,363 million, $1,330 million, $1,417 million and $1,475 million in the first, second, third and fourth quarter of 2021, respectively.

 

(8) Includes Pharmaceutical products not individually shown above.

 

(9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities.  Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $114 million, $32 million and $10 million in the first, second and third quarter of 2022, respectively, and $56 million, $135 million and $27 million in the first, third and fourth quarter of 2021, respectively.

 

 

EX-99.2 3 tm2227726d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

MERCK & CO., INC.

CONSOLIDATED STATEMENT OF INCOME - GAAP

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 1a

 

   2022   2021   % Change 
   1Q   2Q   3Q   Sep YTD   1Q   2Q   3Q   Sep YTD   4Q   Full Year   3Q   Sep YTD 
Sales  $15,901   $14,593   $14,959   $45,453   $10,627   $11,402   $13,154   $35,183   $13,521   $48,704    14%   29%
                                                             
Costs, Expenses and Other                                                            
Cost of sales   5,380    4,216    3,934    13,530    3,199    3,104    3,450    9,752    3,873    13,626    14%   39%
Selling, general and administrative   2,323    2,512    2,520    7,355    2,187    2,281    2,336    6,804    2,830    9,634    8%   8%
Research and development   2,576    2,798    4,399    9,773    2,412    4,321    2,445    9,177    3,068    12,245    80%   6%
Restructuring costs   53    142    94    288    297    82    107    487    174    661    -12%   -41%
Other (income) expense, net   708    438    429    1,576    (455)   (103)   (450)   (1,007)   (333)   (1,341)   *    * 
Income from Continuing Operations Before Taxes   4,861    4,487    3,583    12,931    2,987    1,717    5,266    9,970    3,909    13,879    -32%   30%
Income Tax Provision   554    538    330    1,423    238    503    695    1,436    85    1,521           
Net Income from Continuing Operations   4,307    3,949    3,253    11,508    2,749    1,214    4,571    8,534    3,824    12,358    -29%   35%
Less: Net (Loss) Income Attributable to Noncontrolling Interests   (3)   5    5    6    4    1    4    9    4    13           
Net Income from Continuing Operations Attributable to Merck & Co., Inc.   4,310    3,944    3,248    11,502    2,745    1,213    4,567    8,525    3,820    12,345    -29%   35%
Income (Loss) from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests   -    -    -    -    434    332    -    766    (62)   704    0%   * 
Net Income Attributable to Merck & Co., Inc.  $4,310   $3,944   $3,248   $11,502   $3,179   $1,545   $4,567   $9,291   $3,758   $13,049    -29%   24%
                                                             
Basic Earnings (Loss) per Common Share Attributable to Merck & Co., Inc. Common Shareholders:                                                            
Income from Continuing Operations  $1.70   $1.56   $1.28   $4.55   $1.08   $0.48   $1.81   $3.37   $1.51   $4.88    -29%   35%
Income (Loss) from Discontinued Operations   -    -    -    -    0.17    0.13    -    0.30    (0.02)   0.28    0%   * 
Net Income  $1.70   $1.56   $1.28   $4.55   $1.26   $0.61   $1.81   $3.67   $1.49   $5.16    -29%   24%
                                                             
Earnings (Loss) per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:                                                            
Income from Continuing Operations  $1.70   $1.55   $1.28   $4.53   $1.08   $0.48   $1.80   $3.36   $1.51   $4.86    -29%   35%
Income (Loss) from Discontinued Operations   -    -    -    -    0.17    0.13    -    0.30    (0.02)   0.28    0%   * 
Net Income  $1.70   $1.55   $1.28   $4.53   $1.25   $0.61   $1.80   $3.66   $1.48   $5.14    -29%   24%
                                                             
Average Shares Outstanding   2,528    2,531    2,533    2,531    2,531    2,533    2,530    2,531    2,527    2,530           
Average Shares Outstanding Assuming Dilution   2,537    2,540    2,542    2,540    2,541    2,540    2,536    2,539    2,535    2,538           
Tax Rate from Continuing Operations   11.4%   12.0%   9.2%   11.0%   8.0%   29.3%   13.2%   14.4%   2.2%   11.0%          

 

* 100% or greater                                                                                                

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.                                                                                                

 

 

 

MERCK & CO., INC.

THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2021 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2b

 

In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting.  Historically, Merck’s non-GAAP results excluded expenses for upfront and milestone payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions, to the extent the charges were considered by the company to be significant to the results of a particular period (as well as any related adjustments recorded in a subsequent period). Beginning in 2022, Merck’s non-GAAP results no longer exclude charges related to these items. Results for 2021 have been recast to conform to the new presentation.

 

The table below reflects a reconciliation of GAAP to non-GAAP financial information on a continuing operations basis. As Organon results are reflected within discontinued operations, they are excluded from the financial information provided below.

 

    GAAP     Acquisition and Divestiture-
Related Costs
(1) 
    Restructuring Costs (2)      (Income) Loss from
Investments in Equity
Securities
    Certain Other Items     Adjustment Subtotal     Non-GAAP  
Third Quarter                                          
Cost of sales   $ 3,450       346       48                       394     $ 3,056  
Selling, general and administrative     2,336       61       5                       66       2,270  
Research and development     2,445       48       8                       56       2,389  
Restructuring costs     107               107                       107       -  
Other (income) expense, net     (450 )     (10 )             (684 )             (694 )     244  
Income from Continuing Operations Before Taxes     5,266       (445 )     (168 )     684               71       5,195  
Income Tax Provision (Benefit)     695       (96 )(4)      (26 )(4)      151 (4)              29       666  
Net Income from Continuing Operations     4,571       (349 )     (142 )     533               42       4,529  
Net Income from Continuing Operations Attributable to Merck & Co., Inc.     4,567       (349 )     (142 )     533               42       4,525  
Earnings per Common Share Assuming Dilution from Continuing Operations   $ 1.80       (0.13 )     (0.06 )     0.21               0.02     $ 1.78  
                                                         
Tax Rate     13.2 %                                             12.8 %
                                                         
Sep YTD                                                        
Cost of sales   $ 9,752       1,188       113               225 (3)      1,526     $ 8,226  
Selling, general and administrative     6,804       96       9                       105       6,699  
Research and development     9,177       82       21                       103       9,074  
Restructuring costs     487               487                       487       -  
Other (income) expense, net     (1,007 )     79               (1,503 )             (1,424 )     417  
Income from Continuing Operations Before Taxes     9,970       (1,445 )     (630 )     1,503       (225 )     (797 )     10,767  
Income Tax Provision (Benefit)     1,436       (283 )(4)      (82 )(4)      331 (4)      (257 )(4)      (291 )     1,727  
Net Income from Continuing Operations     8,534       (1,162 )     (548 )     1,172       32       (506 )     9,040  
Net Income from Continuing Operations Attributable to Merck & Co., Inc.     8,525       (1,162 )     (548 )     1,172       32       (506 )     9,031  
Earnings per Common Share Assuming Dilution from Continuing Operations   $ 3.36       (0.46 )     (0.22 )     0.46       0.02       (0.20 )   $ 3.56  
                                                         
Tax Rate     14.4 %                                             16.0 %

 

Only the line items that are affected by non-GAAP adjustments are shown.

 

Merck is providing certain 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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures 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, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

 

(1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures.  Amounts included in research and development expenses primarily reflect expenses for the amortization of intangible assets.  Amounts included in other (income) expense, net, for the third quarter and nine month period primarily reflect an increase in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture. Additionally, the nine month period also includes a loss on a forward exchange contract entered into in conjunction with the Organon spin-off.  Amount included in other (income) expense, net, for the nine month period was partially offset by royalty income related to the prior termination of the Sanofi-Pasteur MSD joint venture.

 

(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs.

 

(3) Represents charges for the discontinuation of COVID-19 development programs.

 

(4) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.  Certain other items for the nine month period also includes a $207 million net tax benefit related to the settlement of certain federal income tax matters.

 

 

 

 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS

THIRD QUARTER 2022

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

 

   Global   U.S.   International 
   3Q 2022   3Q 2021   % Change   3Q 2022   3Q 2021   % Change   3Q 2022   3Q 2021   % Change 
TOTAL SALES (1)  $14,959   $13,154    14   $7,322   $6,276    17   $7,637   $6,878    11 
PHARMACEUTICAL   12,963    11,496    13    6,620    5,670    17    6,343    5,826    9 
Oncology                                             
Keytruda   5,426    4,534    20    3,331    2,580    29    2,095    1,954    7 
Alliance Revenue - Lynparza (2)    284    246    16    144    129    12    140    117    20 
Alliance Revenue - Lenvima (2)    202    188    7    142    114    25    60    74    -19 
Alliance Revenue - Reblozyl (3)    39         *    32         *    7         * 
Vaccines (4)                                             
Gardasil / Gardasil 9   2,294    1,993    15    957    839    14    1,337    1,154    16 
ProQuad / M-M-R II / Varivax   668    661    1    532    537    -1    136    125    9 
RotaTeq   256    227    12    154    135    13    102    92    11 
Pneumovax 23   131    277    -53    68    181    -62    63    97    -35 
Vaqta   64    48    33    27    32    -16    36    16    134 
Hospital Acute Care                                             
Bridion   423    369    15    233    181    29    190    188    1 
Prevymis   114    96    19    49    39    26    64    57    14 
Dificid   77    54    42    72    52    37    6    2    146 
Primaxin   63    70    -9              -57    63    69    -9 
Noxafil   62    64    -3    13    19    -30    49    45    8 
Invanz   50    53    -7    2    (2)   -174    48    55    -14 
Zerbaxa   43    (2)   *    24    (1)   *    19    (1)   * 
Cancidas   43    56    -24    1    1    81    42    56    -25 
Cardiovascular                                             
Alliance Revenue - Adempas/Verquvo (5)    88    100    -12    85    73    17    3    27    -90 
Adempas (6)    57    59    -5                   57    59    -5 
Virology                                             
Lagevrio   436         *              -    436         * 
Isentress / Isentress HD   161    189    -15    68    77    -12    93    112    -17 
Neuroscience                                             
Belsomra   62    81    -24    20    23    -13    42    58    -28 
Immunology                                             
Simponi   173    203    -15                   173    203    -15 
Remicade   49    73    -33                   49    73    -33 
Diabetes (7)                                             
Januvia   717    852    -16    332    365    -9    385    487    -21 
Janumet   417    487    -14    90    86    4    327    401    -18 
Other Pharmaceutical (8)   564    518    9    244    210    16    321    306    5 
                                              
ANIMAL HEALTH   1,371    1,417    -3    475    467    2    896    951    -6 
Livestock   829    864    -4    186    190    -2    643    675    -5 
Companion Animals   542    553    -2    289    277    4    253    276    -8 
                                              
Other Revenues (9)   625    241    159    227    139    63    398    101    * 

 

* 200% or greater

 

Sum of U.S. plus international may not equal global due to rounding.

 

(1) Only select products are shown.

 

(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

 

(3) Alliance Revenue represents royalties.

 

(4) Total Vaccines sales were $3,552 million in the third quarter of 2022 and $3,315 million in the third quarter of 2021.

 

(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

 

(6) Net product sales in Merck's marketing territories.

 

(7) Total Diabetes sales were $1,231 million in the third quarter of 2022 and $1,417 million in the third quarter of 2021.

 

(8) Includes Pharmaceutical products not individually shown above.

 

(9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $10 million in the third quarter of 2022 and $135 million in the third quarter of 2021.  

 

 

 

 

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS

SEPTEMBER YEAR-TO-DATE 2022

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b  

 

   Global   U.S.   International 
   September
YTD 2022
   September
YTD 2021
   % Change   September
YTD 2022
   September
YTD 2021
   % Change   September
YTD 2022
   September
YTD 2021
   % Change 
TOTAL SALES (1)  $45,453   $35,183    29   $20,927   $16,166    29   $24,526   $19,017    29 
PHARMACEUTICAL   39,826    30,714    30    19,119    14,611    31    20,707    16,103    29 
Oncology                                             
Keytruda   15,487    12,609    23    9,307    7,108    31    6,180    5,501    12 
Alliance Revenue - Lynparza (2)    825    721    14    427    371    15    397    350    14 
Alliance Revenue - Lenvima (2)    660    498    33    426    287    48    235    211    11 
Alliance Revenue - Reblozyl (3)    124         *    87         *    37         * 
Vaccines (4)                                             
Gardasil / Gardasil 9   5,428    4,144    31    1,803    1,605    12    3,624    2,539    43 
ProQuad / M-M-R II / Varivax   1,716    1,626    6    1,337    1,255    6    379    371    2 
RotaTeq   644    593    9    427    364    17    218    229    -5 
Pneumovax 23   457    600    -24    280    354    -21    177    247    -28 
Vaqta   134    138    -3    72    80    -9    62    58    6 
Hospital Acute Care                                             
Bridion   1,244    1,096    13    665    545    22    579    551    5 
Prevymis   310    270    15    136    111    23    174    159    9 
Dificid   196    115    70    184    108    70    12    7    75 
Primaxin   185    194    -5    1         87    185    194    -5 
Noxafil   180    197    -9    39    48    -20    141    149    -5 
Invanz   148    157    -6    4    (2)   *    144    159    -10 
Cancidas   138    168    -18    5    4    27    133    164    -19 
Zerbaxa   120    (11)   *    64    (5)   *    55    (6)   * 
Cardiovascular                                             
Alliance Revenue - Adempas/Verquvo (5)    258    248    4    244    222    10    14    26    -47 
Adempas (6)    181    188    -4                   181    188    -4 
Virology                                             
Lagevrio   4,859         *    1,523         *    3,336         * 
Isentress / Isentress HD   466    590    -21    196    222    -12    270    368    -27 
Neuroscience                                             
Belsomra   199    238    -16    60    56    7    139    183    -24 
Immunology                                             
Simponi   540    619    -13                   540    619    -13 
Remicade   163    233    -30                   163    233    -30 
Diabetes (7)                                             
Januvia   2,252    2,445    -8    958    997    -4    1,294    1,448    -11 
Janumet   1,347    1,449    -7    258    244    6    1,089    1,205    -10 
Other Pharmaceutical (8)   1,565    1,589    -1    616    637    -3    949    950    - 
                                              
ANIMAL HEALTH   4,320    4,307    -    1,425    1,363    5    2,894    2,944    -2 
Livestock   2,486    2,503    -1    521    508    3    1,965    1,996    -2 
Companion Animals   1,834    1,804    2    904    855    6    929    948    -2 
                                              
Other Revenues (9)   1,307    162    *    383    192    99    925    (30)   * 

 

* 200% or greater

 

Sum of U.S. plus international may not equal global due to rounding.

 

(1) Only select products are shown.

 

(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.  

 

(3) Alliance Revenue represents royalties and a milestone payment.

 

(4) Total Vaccines sales were $8,743 million and $7,417 million on a global basis for September YTD 2022 and 2021, respectively.

 

(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.

 

(6) Net product sales in Merck's marketing territories.  

 

(7) Total Diabetes sales were $3,836 million and $4,110 million on a global basis for September YTD 2022 and 2021, respectively.  

 

(8) Includes Pharmaceutical products not individually shown above.  

 

(9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $156 million and $191 million on a global basis for September YTD 2022 and 2021, respectively.

 

 

 

 

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES - CONTINUING OPERATIONS

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

 

   2022   2021   % Change 
   1Q   2Q   3Q   Sep
YTD
   1Q   2Q   3Q   Sep
YTD
   4Q   Full Year   3Q   Sep
YTD
 
TOTAL PHARMACEUTICAL  $14,107   $12,756   $12,963   $39,826   $9,238   $9,980   $11,496   $30,714   $12,039   $42,754    13    30 
                                                             
United States   6,773    5,726    6,620    19,119    4,294    4,647    5,670    14,611    5,790    20,401    17    31 
% Pharmaceutical Sales   48.0%   44.9%   51.1%   48.0%   46.5%   46.6%   49.3%   47.6%   48.1%   47.7%          
Europe (1)   3,309    2,677    2,427    8,412    2,276    2,404    2,445    7,124    2,655    9,780    -1    18 
% Pharmaceutical Sales   23.5%   21.0%   18.7%   21.1%   24.6%   24.1%   21.3%   23.2%   22.1%   22.9%          
China   1,113    1,355    1,419    3,887    688    944    1,278    2,910    1,352    4,262    11    34 
% Pharmaceutical Sales   7.9%   10.6%   10.9%   9.8%   7.4%   9.5%   11.1%   9.5%   11.2%   10.0%          
Japan   965    1,092    653    2,710    607    637    614    1,858    771    2,629    6    46 
% Pharmaceutical Sales   6.8%   8.6%   5.0%   6.8%   6.6%   6.4%   5.3%   6.0%   6.4%   6.1%          
Asia Pacific (other than China and Japan)   786    854    702    2,342    437    442    450    1,329    488    1,817    56    76 
% Pharmaceutical Sales   5.6%   6.7%   5.4%   5.9%   4.7%   4.4%   3.9%   4.3%   4.1%   4.2%          
Latin America   435    453    511    1,399    353    379    434    1,166    421    1,587    18    20 
% Pharmaceutical Sales   3.1%   3.6%   3.9%   3.5%   3.8%   3.8%   3.8%   3.8%   3.5%   3.7%          
Eastern Europe/Middle East/Africa   450    339    360    1,149    357    318    362    1,037    278    1,315    -1    11 
% Pharmaceutical Sales   3.2%   2.7%   2.8%   2.9%   3.9%   3.2%   3.1%   3.4%   2.3%   3.1%          
Canada   189    166    166    521    160    157    164    482    167    650    1    8 
% Pharmaceutical Sales   1.3%   1.3%   1.3%   1.3%   1.7%   1.6%   1.4%   1.6%   1.4%   1.5%          
Other   87    94    105    287    66    52    79    197    117    313    33    46 
% Pharmaceutical Sales   0.6%   0.6%   0.9%   0.7%   0.8%   0.4%   0.8%   0.6%   0.9%   0.8%          

 

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.      

(1) Europe represents all European Union countries, the European Union accession markets and the United Kingdom.      

 

 

 

 

MERCK & CO., INC.

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

OTHER (INCOME) EXPENSE, NET

 

   3Q22   3Q21   Sep YTD
2022
   Sep YTD
2021
 
Interest income  $(40)  $(7)  $(62)  $(27)
Interest expense   244    196    727    597 
Exchange losses   96    46    220    202 
Loss (income) from investments in equity securities, net (1)    371    (683)   1,361    (1,535)
Net periodic defined benefit plan (credit) cost other than service cost   (60)   40    (208)   (159)
Other, net   (182)   (42)   (462)   (85)
Total  $429   $(450)  $1,576   $(1,007)

 

(1) Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds.  Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while gains and losses from ownership interests in investment funds are accounted for on a one quarter lag.

 

 

EX-99.3 4 tm2227726d1_ex99-3.htm EXHIBIT 99.3

 

Exhibit 99.3

 

 

News Release

 

 

Media Contact: Johanna Herrmann Investor Contact: Peter Dannenbaum
 

(617) 216-6029

  (908) 740-1037

 

Robert M. Davis to Succeed Kenneth C. Frazier as Chairman of Merck

 

Frazier to Retire After 30 years at Merck; Board of Directors Elects Davis as Company Chairman

 

RAHWAY, N.J., October 26, 2022 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced that the Merck board of directors has unanimously elected Robert M. Davis to serve as chairman of the board, effective Dec. 1, 2022. He will succeed Kenneth C. Frazier, who plans to retire on Nov. 30, 2022, after a long-tenured career at Merck that began in 1992. Frazier led the company for 10 years as president and chief executive officer, from 2011 through 2021. He has served as a Merck director since Jan. 2011 and chairman of its board of directors since Dec. 2011.

 

Davis, who currently serves as president and chief executive officer, became Merck’s president in April 2021 and was named Merck’s chief executive officer and a member of its board in July 2021.

 

Speaking on behalf of Merck’s board of directors, Thomas H. Glocer, independent lead director, stated, “I want to thank Ken for his principled leadership, extraordinary integrity, and unwavering commitment to delivering on Merck’s purpose of saving and improving lives around the world.”

 

“For decades, Ken has embodied Merck’s core principles and values, anchored by a singular focus on creating meaningful value for our patients, employees, communities and shareholders,” Glocer added. “Ken is a once-in-a-generation leader, and his positive impact on our company and patients everywhere will reverberate for decades.”

 

Glocer continued, “Rob Davis has shown himself to be an innovative leader with a deep understanding of Merck and our industry. We look forward to working with him as our new chairman and to his continued contributions.”

 

 

 

Frazier said, “Merck is powered by the talent, passion and commitment of many thousands of people around the world who are united by a common goal: harnessing the power of science to solve the world’s most pressing health challenges. It has been a distinct pleasure and privilege to be a part of the Merck team, and I will be forever grateful to my Merck colleagues for their dedicated efforts that have led to the company’s many important achievements.”

 

“I am also grateful to the Merck board of directors for their expertise and support through the years. With Rob Davis as their new chairman, I am confident that the board will continue to help guide the company in a manner that will allow it to succeed competitively and remain committed to its mission,” Frazier added.

 

“On behalf of Merck management and our colleagues around the world, I want to express our deepest appreciation for Ken’s innumerable contributions and indelible impact on our company and global health,” said Davis. “During his tenure, Ken led with conviction, advocated for patients and created meaningful value for our stakeholders. He has been an exemplar of purpose-driven leadership, vision and courage. I am honored to lead Merck as chairman and chief executive officer as we continue to build on his profound legacy.”

 

About Robert M. Davis

 

Rob Davis is chief executive officer and president of Merck.

 

Previously, Rob served as Merck’s president, responsible for the company’s operating divisions — Human Health, Animal Health, Manufacturing and Merck Research Laboratories.  Prior to that, he was executive vice president, Global Services, and the company’s chief financial officer.

 

Rob joined the company as chief financial officer in 2014 with additional responsibility for real estate operations, corporate strategy and business development. In 2016, his role was expanded to include responsibility for information technology and procurement, forming Global Services.  He became president in April 2021 and CEO and a member of the board of directors on July 1, 2021.

 

Prior to joining Merck, Rob was corporate vice president and president of Baxter’s Medical Products business. During his tenure at Baxter, he held several other positions, including president of Baxter’s Renal business, chief financial officer and treasurer. Before joining Baxter in 2004, Rob held numerous positions of increasing responsibility over 14 years at Eli Lilly and Company.

 

Rob serves on the board of directors for Duke Energy Corporation and is chair of its finance and risk management committee and a member of the corporate governance committee. In addition, Rob is a board member of Project Hope, a non-profit organization focused on empowering health care workers to deliver expert care when and where it is needed most.

 

 

 

 

Rob received his J.D. from Northwestern University School of Law, his M.B.A. from Northwestern University’s Kellogg Graduate School of Management and his bachelor’s degree in finance from Miami University.

 

About Kenneth C. Frazier

 

Kenneth C. Frazier has served as executive chairman of Merck’s board of directors since July 2021, following his retirement from a decade-long tenure as Merck’s president and chief executive officer.

 

Under Ken’s leadership, Merck delivered innovative life-saving medicines and vaccines as well as long-term and sustainable value to its multiple stakeholders.  Ken substantially increased Merck’s investment in research, including early research, while refocusing the organization on the launch and growth of key products that provide far-reaching benefits to society.  He also led the formation of philanthropic and humanitarian initiatives that build on Merck’s 130-year legacy.

 

Ken joined the company in 1992 and held positions of increasing responsibility, including general counsel, before becoming president and chief executive officer in 2011.  Prior to joining Merck, Ken was a Partner with the Philadelphia law firm of Drinker Biddle & Reath.  Ken’s contributions, especially in the legal, business, and humanitarian fields, have been widely recognized.  He sits on the boards of Weill Cornell Medicine, Eikon Therapeutics, the National Constitution Center and Cornerstone Christian Academy in Philadelphia, PA.  He is Co-Founder and Co-Chair of OneTen, a coalition of leading organizations committed to upskilling, hiring, and promoting one million Black Americans into family-sustaining jobs.  OneTen is committed to facilitating a meaningful, measurable, and lasting impact on racial and economic justice.  Ken is also Chairman, Health Assurance Initiatives, at the venture capital firm, General Catalyst, where he advises on investments and partnerships and provides mentorship to founders building companies that are well positioned to transform the healthcare industry through collaborative and responsible innovation.  He also is a member of the American Academy of Arts and Sciences, the American Philosophical Society, The Business Council, the Council of the American Law Institute, the American Bar Association, and a Fellow of the College of Physicians of Philadelphia.  Additionally, Ken is Co-Chair of the Legal Services Corporation’s Leaders Council.

 

As a strong advocate for social justice and economic inclusion, Ken is the recipient of numerous awards and honors, including the Anti-Defamation League Courage Against Hate Award, the Botwinick Prize in Business Ethics from Columbia Business School, the Legend in Leadership Award from the Yale School of Management, the NAACP Legal Defense and Educational Fund National Equal Justice Award, and the National Minority Quality Forum’s Lifetime Achievement Award.  In 2018, Ken received the Harvard Law School Association Award, the highest honor given by the prestigious association, in recognition of his extraordinary service to the legal profession, Harvard Law School, and the public. In that same year, Ken was named one of the World’s Greatest Leaders by Fortune magazine and was also named one of TIME’s 100 Most Influential People and again made that list in 2021.  In 2019, he became the first recipient of the Forbes Lifetime Achievement Award for Healthcare.  In 2021, Columbia Business School honored him with the Deming Cup for Operational Excellence, and his peers named Ken Chief Executive magazine’s CEO of the Year.

 

 

 

 

Ken received his bachelor’s degree from The Pennsylvania State University and holds a J.D. from Harvard Law School.

 

About Merck

 

At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

 

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA

 

This news release 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. 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 the global outbreak of novel coronavirus disease (COVID-19); 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, 2021 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

 

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Cover
Oct. 26, 2022
Document Information [Line Items]  
Document Type 8-K
Amendment Flag false
Document Period End Date Oct. 26, 2022
Entity File Number 1-6571
Entity Registrant Name Merck & Co., Inc.
Entity Central Index Key 0000310158
Entity Tax Identification Number 22-1918501
Entity Incorporation, State or Country Code NJ
Entity Address, Address Line One 126 East Lincoln Avenue
Entity Address, City or Town Rahway
Entity Address, State or Province NJ
Entity Address, Postal Zip Code 07065
City Area Code 908
Local Phone Number 740-4000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Common Stock ($0.50 par value)
Trading Symbol MRK
Security Exchange Name NYSE
0.500% Notes due 2024  
Document Information [Line Items]  
Title of 12(b) Security 0.500% Notes due 2024
Trading Symbol MRK 24
Security Exchange Name NYSE
1.875% Notes due 2026  
Document Information [Line Items]  
Title of 12(b) Security 1.875% Notes due 2026
Trading Symbol MRK/26
Security Exchange Name NYSE
2.500% Notes due 2034  
Document Information [Line Items]  
Title of 12(b) Security 2.500% Notes due 2034
Trading Symbol MRK/34
Security Exchange Name NYSE
1.375% Notes due 2036  
Document Information [Line Items]  
Title of 12(b) Security 1.375% Notes due 2036
Trading Symbol MRK 36A
Security Exchange Name NYSE
XML 12 tm2227726d1_8k_htm.xml IDEA: XBRL DOCUMENT 0000310158 2022-10-26 2022-10-26 0000310158 us-gaap:CommonStockMember 2022-10-26 2022-10-26 0000310158 mrk:Sec0.500NotesDue2024Member 2022-10-26 2022-10-26 0000310158 mrk:Sec1.875NotesDue2026Member 2022-10-26 2022-10-26 0000310158 mrk:Sec2.500NotesDue2034Member 2022-10-26 2022-10-26 0000310158 mrk:Sec1.375NotesDue2036Member 2022-10-26 2022-10-26 iso4217:USD shares iso4217:USD shares 0000310158 false 8-K 2022-10-26 Merck & Co., Inc. NJ 1-6571 22-1918501 126 East Lincoln Avenue Rahway NJ 07065 908 740-4000 false false false false false Common Stock ($0.50 par value) MRK NYSE 0.500% Notes due 2024 MRK 24 NYSE 1.875% Notes due 2026 MRK/26 NYSE 2.500% Notes due 2034 MRK/34 NYSE 1.375% Notes due 2036 MRK 36A NYSE EXCEL 13 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx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