Merck Provides Update on Strategic Actions to Transform the Company and Build a Platform for Sustained Future Growth at the 33rd Annual J.P. Morgan Healthcare Conference


January 12, 2015 7:00 am ET

  • KEYTRUDA, First FDA-Approved Anti-PD-1 Therapy, Filed and Launched Within Five Months
  • Company Expects to Submit sBLA for KEYTRUDA in Mid-Year 2015 for Advanced Non-Small Cell Lung Cancer
  • NDA Submission for Hepatitis C Combination Regimen, Grazoprevir/Elbasvir (MK-5172/MK-8742), Planned for First Half of 2015
  • Seven New Products were Approved in 2014
  • Company Announced Acquisition of Cubist, Acquired Idenix and Divested its Consumer Care Business
  • Targeted Cost Savings are on Track to be Realized by the End of 2015

Merck (NYSE:MRK), known as MSD outside the United States and Canada,
today will report on the ongoing execution of its multi-year, strategic
initiative to sharpen its commercial and research and development (R&D)
focus, redesign its operating model and reduce its cost base. In October
2013, Merck launched its global initiative
to transform the company into a more competitive and innovative company
and to build a platform for sustained future growth.

“Over the past 15 months, we’ve seen the results of our transformation
strategy, including advancing major pipeline candidates, completing
multiple business development actions and securing first-in-class
product approvals,” said Kenneth C. Frazier, chairman and chief
executive officer, Merck. “As a result of our strong and continued
commitment to the pursuit of science and R&D, our labs are focused on
many of the most innovative areas in biomedical research today, which we
believe is the best way to create intrinsic value for both society and
for our shareholders.”

Positioned for Long-Term Growth Through Innovation

As a result of prioritizing its research efforts in the core areas where
it can make the most impact on addressing critical areas of unmet
medical need, Merck is now focused on many of the world’s most urgent
global health challenges, including immuno-oncology, hepatitis C,
cardiometabolic disease, antimicrobial resistance and Alzheimer’s
disease. Merck accelerated several of its key clinical programs in 2014,
positioning the company for long-term growth.

  • In addition to being the first anti-PD-1 therapy approved in the
    United States, KEYTRUDA (pembrolizumab) received Breakthrough Therapy
    Designation from the U.S. Food and Drug Administration (FDA) in two
    tumor types: advanced melanoma and advanced non-small cell lung cancer
  • In mid-year 2015, Merck expects to submit a supplemental Biologics
    License Application (sBLA) to the FDA for KEYTRUDA for the treatment
    of patients with Epidermal Growth Factor Receptor (EGFR)
    mutation-negative and Anaplastic Lymphoma Kinase (ALK)
    rearrangement-negative NSCLC whose disease has progressed on or
    following platinum-containing chemotherapy.
  • In 2014, Merck engaged in multiple research collaborations in
    oncology, and data for KEYTRUDA was presented in seven different types
    of cancer. KEYTRUDA continues to be studied in more than 30 cancers
    and in 20 combination settings.

Merck also continued to accelerate its R&D efforts in its other core
areas of focus, such as hepatitis C.

  • The company expects to file a New Drug Application (NDA) with the FDA
    in the first half of 2015 for grazoprevir/elbasvir (MK-5172/MK-8742),
    the company’s investigational oral, once-daily combination regimen for
    the treatment of chronic hepatitis C virus (HCV) infection.
  • Merck bolstered its hepatitis pipeline in 2014 by acquiring
    Idenix Pharmaceuticals.
  • As a result of the acquisition, the Phase 2 C-CREST studies (NCT02332707
    and NCT02332720)
    have been initiated to study combination regimens of grazoprevir and
    MK-3682 (formerly IDX21437) with either elbasvir or
    MK-8408 for the treatment of HCV infection.

In total, Merck now has more than 10 Phase 3 clinical programs in its
core therapeutic areas, as well as in other areas with significant
potential such as Alzheimer’s disease, and has multiple strategic

  • Merck recently initiated its first Phase 3 study (NCT02275780)
    of doravirine (MK-1439), an investigational HIV medicine.
  • In addition to oncology collaborations, Merck also initiated several
    other clinical research collaborations in 2014, such as working with
    NewLink on the development of an investigational Ebola vaccine and a
    cardiovascular-focused collaboration with Bayer.

Focused Commercial Strategy Provides a Strong Platform for Growth and

Additionally, Merck has taken several steps to create and maximize near-
and longer-term commercial leadership opportunities that create value
for sustained growth.

  • The initial indication for KEYTRUDA was filed and launched in the
    United States within five months in 2014; the company continues to
    focus efforts on this priority launch. Additionally, filings are
    underway in the European Union and globally for advanced melanoma.
  • Merck bolstered its product portfolio by entering into an agreement
    to acquire Cubist Pharmaceuticals, a global leader in the discovery,
    development and supply of antibiotics to treat serious and potentially
    life-threatening infections.
  • Following the completion of the acquisition of Cubist in the first
    quarter of 2015, Merck looks forward to launching ZERBAXA
    (ceftolozan/tazobactam), a recently approved antibiotic to treat
    Gram-negative bacteria, a key cause of in-hospital infections.
  • In total, Merck received approval for seven products in 2014, such as
    GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and
    BELSOMRA (suvorexant).

Reduced Operating Costs Drive Profitability and Investment in
Innovation and Late-Stage Portfolio

In 2014, the company’s redesigned operating model enabled Merck to
remain on track to meet its goal of realizing $2.5 billion in annual net
cost savings by the end of 2015. These savings are off of the company’s
full-year 2012 expense levels. As part of its prioritization efforts,
the company continued to review its assets to determine whether they
could provide the best short- and longer-term value with Merck or

  • As a result, Merck divested its consumer
    business to Bayer for $14 billion, which provided capital to
    the company to better resource its core areas of focus and return cash
    to shareholders.
  • Merck determined its Animal Health business remains a key growth
    driver and is committed to looking for ways to augment this critical
  • In 2014, the company continued to streamline its physical footprint,
    divesting multiple sites within its manufacturing network around the
    world and completing the closures of facilities in Whitehouse Station
    and Summit, N.J.

About Merck

Today’s Merck is a global healthcare leader working to help the world be
well. Merck is known as MSD outside the United States and Canada.
Through our prescription medicines, vaccines, biologic therapies and
animal health products, we work with customers and operate in more than
140 countries to deliver innovative health solutions. We also
demonstrate our commitment to increasing access to healthcare through
far-reaching policies, programs and partnerships. For more information,
and connect with us on Twitter,
and YouTube.

Merck Forward-Looking Statement

This news release includes “forward-looking statements” within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. These statements are based
upon the current beliefs and expectations of Merck’s management and are
subject to significant risks and uncertainties. There can be no
guarantees with respect to pipeline products that the products 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
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; Merck’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 Merck patents and other protections
for innovative products; and the exposure to litigation, including
patent 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 2013 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 (

Lainie Keller, 908-236-5036
Steven Cragle, 908-740-1801
Justin Holko, 908-740-1879
Joe Romanelli, 908-740-1986

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