New medicines and vaccines currently under development and outcomes studies demonstrating the clinical benefits of our existing product franchises will help propel the Company into major new therapeutic areas and position Merck for a new cycle of growth. New medicines and uses approved or filed in 2002 Among our most exciting news in 2002 was the approval by the U.S. Food and Drug Administration (FDA) of Zetia, the first in a new class of medicines to treat cholesterol since statins were introduced 15 years ago. Zetia, developed and marketed through a joint venture with Schering-Plough, lowers cholesterol through a unique mechanism of action by inhibiting cholesterol absorption in the intestine. Zetia provides physicians with a new option for helping millions of patients reach their cholesterol-lowering goals.     Seasonal allergy sufferers also received a new treatment option in 2002, when the FDA approved the use of Singulair for seasonal allergic rhinitis. Singulair, the first in a new class of therapy to treat this ailment, blocks leukotrienes, an underlying cause of seasonal allergy symptoms.     In other regulatory initiatives, Merck filed a supplemental New Drug Application with the FDA requesting that study results from Oxford University’s Heart Protection Study (HPS) be included in the label for Zocor. HPS found that Zocor 40 mg saved lives by significantly reducing the risk of heart attack and stroke in a broad range of high-risk patients. And in January 2003, an FDA Advisory Committee reviewed data from the Losartan Intervention for Endpoint Reduction in Hypertension (LIFE) trial and recommended that Cozaar be granted an additional indication based on the results of that trial. The Advisory Committee’s recommendation is not binding on the FDA. Targeting unmet needs In addition to building our existing franchises, Merck is expanding into new therapeutic categories. The investigational medicines in our pipeline share a common characteristic in that they target significant unmet medical needs. They focus on areas where patient and physician dissatisfaction is high; where there is a heavy cost or burden of illness; and where Merck has a meaningful opportunity to advance patient care worldwide. CINV and depression–novel mechanism of action Merck’s novel Substance P compound is in late-stage development to treat two conditions: chemotherapy-induced nausea and vomiting (CINV) and depression. The compound blocks NK1 receptors in the brain, which are located in regions that are associated with emotion and vomiting.     Emend, which targets CINV, has completed Phase III studies and is in priority review with the FDA. Each year, about 1 million patients in the United States undergo chemotherapy, which frequently causes the nausea and vomiting that are among the most distressing side effects associated with treatment. Emend is potentially the first major advance in CINV prevention in more than a decade, and has demonstrated efficacy in both acute and delayed CINV.     Aprepitant for depression is in a large, ongoing Phase III study. Depression affects about 20 percent of Americans at some point in their lives. Diabetes–unique dual mechanism There are 16 million diabetes patients in the United States and 140 million worldwide. Current therapies for diabetes focus on glycemic control, but more than 70 percent of patients also have a lipid disorder that frequently goes untreated. MK-767, a compound licensed from Kyorin that is now in Phase III studies, has shown effectiveness in Phase II studies on blood glucose and lipids. Vaccines continue to show promise Merck has a number of promising vaccines under development, including one that targets human papillomavirus (HPV), which is known to cause cervical cancer. Worldwide, cervical cancer is the second leading cause of cancer-related deaths in women. Merck’s Phase III study targets four different HPV subtypes: HPV 6, 11, 16 and 18, the latter two being associated with a majority of cervical cancer deaths. An analysis of two years’ data showed that Merck’s investigational vaccine intended to prevent infection by HPV 16 reduced the incidence of infection in 100 percent of women who had not been previously infected with HPV 16. There are competing claims to intellectual property in the HPV field, but Merck is confident that the claims will not delay our program.     Merck is also investigating an adult vaccine for shingles, a disorder caused by the reactivation of the chickenpox virus that often leads to very severe and debilitating pain. Approximately 38,000 people are enrolled in the Phase III study, which we are conducting with the National Institutes of Health and the U.S. Department of Veterans Affairs.     A third vaccine under development, RotaTeq, targets rotavirus, which can cause severe infant diarrhea for which there is no existing anti-viral treatment. In the developing world, rotavirus is associated with about 800,000 infant deaths annually. Merck’s rotavirus vaccine is in a Phase III safety trial, which has enrolled more than 40,000 infants to date. Earlier in the pipeline Merck’s earlier stage pipeline products include novel compounds such as a PDE-4 inhibitor for asthma and pulmonary disease. In addition, our HIV/AIDS programs, which are focused on an integrase inhibitor and an HIV vaccine, continue to show promise in early development. In February 2003, Merck discontinued Phase II clinical trials for its lead GABA-A α2/α3 agonist compound for the treatment of generalized anxiety. However, the Company is continuing its research in the field of anxiety through the ongoing study of GABA agonist molecules. We are accelerating the pace of innovation This is a time of great promise and excitement in Merck’s research laboratories. Our goal is to find treatments for some of the most vexing medical problems of our time. And we are exploring programs in cancer, Alzheimer’s disease, obesity and diabetes. We believe our future lies in taking the right steps today to advance medical practice tomorrow.