Thank you, Dick. Good afternoon, everyone.

It's a great pleasure to be able to report to you today on all that we have accomplished since we last met -- and especially over the past six months -- to create what I believe is the strongest pipeline in the industry.

This afternoon I'd like to provide you with a brief overview of our pipeline, discuss the process we used to prioritize our portfolio after the completion of the merger between Merck and Schering-Plough, and highlight several of our most promising candidates.

The strength of our pipeline is the result of an enormous amount of hard work by the very talented scientists and researchers at the new Merck.

It also reflects a rigorous process to integrate the pipelines of Schering-Plough and Merck following our merger.

As this slide illustrates, the new Merck has a strong portfolio of innovative compounds in Phase II and Phase III of development.

They are expected to address such unmet medical needs as Hepatitis C, stroke, cardiovascular disease, osteoporosis, and insomnia.

We have 22 compounds in Phase II and 21 in Phase III of development, including three combination products.

We currently have four products under review.

We are also continuing our push into biologics.

The new Merck is committed to becoming an industry leader in this area.

We have five biologics currently on the market and five more novel biologics in the clinical phase of development.

I said at the time the merger was announced that this merger was about the science.

I was convinced then -- and I am even more certain today -- that the two research organizations complemented each other.

Our first order of business once the merger took place was to prioritize our two portfolios.

We had to decide what compounds we would move forward and which ones did not merit further work at this time.

Over the course of four months, numerous meetings, and detailed analyses, we fully examined every compound in each pipeline.

We considered the likelihood of success, both from the perspective of the science and of the unmet medical need.

Our bottom line was this: determine which products have the greatest potential to improve human health, and would, as a result, also make the greatest contribution to Merck's bottom line.

The pipeline I showed you a few moments ago is the result of this process.

We identified the best of what each legacy company's pipeline contained and made the decision to move them forward.

We have committed the resources required to further advance these compounds.

At the same time, we decided to conclude our work on some of the compounds that had been in our separate pipelines, and to put others on hold.

Because resources are finite, we are putting them to use where they have the greatest potential to achieve the maximum scientific return on our research investments.

It's worth noting that Merck's clinical pipeline contains contributions from both legacy companies. Fifty-five percent came from Merck's former pipeline and 45 percent came from Schering-Plough's. This underscores the complementary nature of the merger. Each partner had something significant to offer the other, making the combined pipeline much stronger than either was individually.

It would take much more time than we have today for me to tell you about each of the more than 50 drugs in development in the clinical phases of our pipeline.

So I'd like to highlight five of our compounds.

I selected them because they illustrate the innovative nature of our pipeline and because they highlight our commitment to address unmet medical needs.

The first product I'd like to discuss is Boceprevir, a protease inhibitor that has the potential to greatly improve the success rate in treating Hepatitis C.

Hepatitis C is a viral infection of the liver.

The Centers for Disease Control estimates that as many as 3.2 million Americans have Hepatitis C, with another 17,000 contracting the illness every year.

Most people who have the virus don't know it until they start to show signs of liver failure.

The current standard treatment is both very difficult and not very effective.

Treatment lasts for 48 weeks -- nearly an entire year.

In addition, it makes most people feel like they have a bad case of the flu -- and not just for a week or two, but for the entire 48-week period.

And despite this long, difficult regimen, the treatment succeeds in fewer than 40 percent of patients.

Because 6 out of every 10 patients treated do not get well, it's not surprising that many patients decide not to undergo the treatment.

After all, how many of us would agree to feel terrible for a year for just a four-in-ten chance of success?

Now consider what we saw in our Phase II studies.

When patients who have not been treated previously for Hepatitis C were given Boceprevir in addition to the standard treatment, the cure rate jumped from 38 percent to 75 percent.

Boceprevir works by binding itself to an enzyme that is required for the virus to replicate.

This stops the virus from multiplying.

Should our Phase III studies continue to show the results that we found in Phase II, we expect Boceprevir to help re-define the standard of care for Hepatitis C.

By almost doubling the chance of success, it should convince many more patients to undergo treatment and regain their health.

Next I'd like to speak with you about Vorapaxar, a novel anti-platelet agent for guarding patients against stroke and myocardial infarctions by inhibiting thrombosis.

Cardiovascular disease is an incredibly important unmet medical need with overwhelming morbidity and mortality worldwide.

Cardiovascular disease causes as many as one-third of deaths around the world.

Global cardiovascular deaths will continue to rise from 18 million in 2010 to 24 million in 2030.

As many of you probably know from either personal experience or that of family or friends, patients with some risk of cardiovascular disease are often placed on low-dose aspirin, which helps prevent the formation of blood clots.

Patients with a higher degree of risk often have the aspirin supplemented with a drug such as Plavix, which, like aspirin, is an anti-platelet agent.

Unfortunately, however, both aspirin and drugs like Plavix carry a potentially serious side effect -- increased risk of bleeding.

Now, while this is inconvenient if one cuts oneself while shaving, it is potentially deadly in the event of a serious internal bleed.

And the risk is greater when on aspirin and Plavix than when on aspirin alone.

Like those two medicines, Vorapaxar is also an anti-platelet agent.

But our studies to date suggest that it has a distinct advantage.

In our phase III studies, we are aiming to demonstrate that it decreases the risk of thrombus formation without increasing the risk of uncontrollable bleeding.

In other words, it provides additional protection without adding an increased risk of bleeding.

Vorapaxar has the potential to improve the health of a large number of people.

We expect to file Vorapaxar next year.

The third product I'd like to describe for you is Tredaptive, a Merck product that lowers LDL --or bad -- cholesterol while increasing HDL -- or good -- cholesterol.

Tredaptive achieves these results by combining Merck's extended-release niacin with our novel DP1 inhibitor, laropiprant.

Niacin has long been known to be effective in producing these beneficial changes in cholesterol.

But, it also causes flushing, a very unpleasant side effect that has inhibited its use.

Tredaptive combines Merck's extended release niacin with a molecule that significantly reduces flushing.

Tredaptive has already been approved for use in more than 45 countries.

We expect to file it in the United States in 2012, at the conclusion of the very large cardiovascular outcomes trial currently underway.

This trial is following the cardiovascular health of 25,000 patients around the world, half of them using Tredaptive, half not.

It is designed to measure whether the use of Tredaptive reduces the incidence of cardiovascular events.

Merck is committed to leading the way in cardiovascular research.

We currently have more than 90,000 patients enrolled in various cardiovascular studies.

Others may be retreating from this field. We are not.

The next product I'd like to review for you is Odanacatib, a drug that is expected to provide a new way of preventing bone degradation in patients with osteoporosis.

Osteoporosis is the most prevalent bone disease in the United States.

More than 10 million Americans over the age of 50 have osteoporosis and another 34 million have low bone mass.

This increases their risk of breaking bones.

It is estimated that 20 to 30 percent of patients do not tolerate the currently available drugs, leaving them untreated and vulnerable to fractures.

Odanacatib is expected to offer them a new alternative.

Odanacatib works by inhibiting an enzyme, called Cathepsin K, in the cells that degrade bones.

By inhibiting this enzyme, these cells are less efficient at degrading bone.

This is expected to reduce fractures among osteoporosis patients by increasing bone mineral density.

The expected dosing of Odanacatib would be one pill taken once a week.

It can be taken with or without food and it doesn't require a patient to remain upright after it is taken.

Just as we are undertaking an outcomes study with Tredaptive and, I should mention, with Vorapaxar, we are also conducting an outcomes study for Odanacatib.

We've enrolled 16,000 post-menopausal women in this study; half are taking Odanacatib, half are taking placebo.

We are measuring the rate at which people in each group suffer bone fractures, especially of the hip and spine.

This study will prove if Odanacatib reduces the incidence of fractures, as we expect it to.

Finally, I'd like to speak with you about MK-4305, our Orexin receptor inhibitor, a novel treatment for insomnia.

Tens of millions of Americans suffer from sleep disorders.

People who don't receive enough good sleep are generally less alert and less productive during their waking hours, to say nothing of grumpier.

MK-4305, if approved, will represent the first major new approach to the treatment of insomnia in nearly 40 years.

Most drugs currently available for treating insomnia work by depressing the central nervous system -- the brain.

These drugs produce numerous side effects, including reduced cognition and what many call the “hangover effect” -- an overall feeling of malaise.

MK-4305 uses a completely different mechanism of action.

Instead of depressing the central nervous system, it blocks the neuropeptides in the brain that keep people awake.

So rather than knocking you out, it allows you to fall asleep by blocking the brain's arousal system.

It's like preventing the body's alarm clock from ringing while you're trying to get to sleep.

Because MK-4305 does not depress the central nervous system, it is not expected to produce the types of side effects seen with the drugs that do.

Studies to date show that MK-4305 will improve what is known as sleep efficiency -- which is the amount of time one spends in bed when one is actually asleep and not just trying to get to sleep.

Our Phase II clinical studies also show that patients with insomnia go to sleep faster and spend less time awake in the middle of the night when taking MK-4305 as compared to placebo.

Based on these results, MK-4305 is now in Phase III of development.

This is the final stage before seeking FDA approval.

As I concluded my remarks to you last year, I said the merger that we were about to undertake would bring together two strong research organizations to provide greater opportunities to advance science and innovation in the cause of relieving human suffering and improving human health.

Over the past six months, we have done exactly that.

We believe that our pipeline is the strongest in the industry.

We are developing new products that will break new ground in patient health.

We are advancing the science of drug discovery and providing new value to the patients we serve.

Some may question the commitment of this industry to putting the interests of patients first.

But no one should doubt that here at Merck, we're driven by a deep and abiding passion to advance the science of drug discovery so that we can reduce disease and the suffering it causes.

That was true of both companies before the merger. It certainly remains true today. Thank you … and Be Well.

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Forward-Looking Statements

This presentation includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, statements about the benefits of the merger between Merck and Schering-Plough, including future financial and operating results, the combined company's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of Merck's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the possibility that the expected synergies from the merger of Merck and Schering-Plough will not be realized, or will not be realized within the expected time period; the impact of pharmaceutical industry regulation and health care legislation; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; Merck's ability to accurately predict future market conditions; dependence on the effectiveness of Merck's patents and other protections for innovative products; the risk of new and changing regulation and health policies in the U.S. and internationally and the exposure to litigation and/or regulatory actions.

Merck 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 Merck's 2009 Annual Report on Form 10-K 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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