Q3 2026 Merck & Co Inc Earnings Call

October 29, 2026

Operator: Welcome to the Merck & Co., Inc., Rahway, New Jersey, USA third quarter sales and earnings conference call. At this time, all participants are in a listen-only mode until the question and answer session. At that time, to ask a question, press star 1 on your phone and record your name at the prompt. This call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin.

Peter Dannenbaum: Thank you, Julie, and good morning, everyone. Welcome to the Q3 2026 conference call for Merck & Company Incorporated, Rahway, New Jersey, USA. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer, Caroline Litchfield, Chief Financial Officer, and Dr. Dean Li, President of Research Labs. Before we get started, I would like to point out that we have items in our GAAP results, such as acquisition-related charges, restructuring costs, and certain other items that we have excluded from our non-GAAP results. There is a reconciliation in our press release. I will also remind you that some of the statements that we make today may be considered forward-looking statements within the meaning of the Safe Harbor provision of the US Private Securities Litigation Reform Act of 1995.

Speaker #2: Research Labs. Before we get started, I'd like to point out that we have items in our GAAP results such as acquisition-related charges, restructuring costs, and certain other items that we have excluded from our non-GAAP results.

Peter Dannenbaum: Such statements are made based on the current beliefs of our company's management and are subject to significant risks and uncertainties. If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including Item 1A in the 2025 10-K, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward-looking statements made this morning. Merck & Co., Inc., Rahway, New Jersey, USA, undertakes no obligation to publicly update any forward-looking statements. During today's call, a slide presentation will accompany our speakers' prepared remarks. These slides, along with the earnings release, today's prepared remarks, and our SEC filings, are all posted to the investor relations section of our company's website. With that, I would like to turn the call over to Rob.

Speaker #2: uncertainties. If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including Item 1A in the 2025 10-K, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward-looking statements made this morning.

Speaker #2: These Merck slides, along with the earnings release, today's prepared remarks, and our SEC filings, are all posted to the Investor Relations section of our company's website.

Speaker #2: With that, I'd like to turn the call over to Rob.

Rob Davis: Thank you, Peter. Good morning and thank you for joining today's call. 2026 continues to be a year of substantial progress for our company. We are executing well on all fronts, demonstrated particularly by the many new product launches now successfully underway, and the important clinical milestones we are achieving that are further de-risking the substantial long-term opportunity of our late-phase pipeline. This momentum extends across multiple therapeutic areas and modalities, and there is much more to come, with numerous significant readouts still to occur over the coming years. I am very pleased that the disciplined execution of our strategy over the past several years is increasingly translating into meaningful clinical, regulatory, and commercial results. The breadth of these achievements strengthens my confidence in the future of our company and our ability to deliver long-term value for patients and shareholders.

Speaker #3: Thank you, Peter. Good morning, and thank you for joining today's call. 2026 continues to be a year of substantial progress for our company. We're executing well on all fronts.

Speaker #3: Demonstrated particularly by the many new product launches now successfully underway. And the important clinical milestones we're achieving that are further de-risking the substantial long-term opportunity of our late-phase pipeline.

Speaker #3: This momentum extends across multiple therapeutic areas and modalities, and there is much more to come, with numerous significant readouts still to occur over the coming years.

Speaker #3: I'm very pleased that the disciplined execution of our strategy over the past several years is increasingly translating into meaningful clinical, regulatory, and commercial results.

Speaker #3: The breadth of these achievements strengthens my confidence in the future of our company and our ability to deliver long-term value for patients and shareholders.

Rob Davis: Turning to our Q3 results, we delivered solid performance with revenue of $18.1 billion, reflecting increased contributions from new products as well as strength in oncology and animal health. Caroline will discuss our results and the full-year outlook in greater detail in a moment. We also achieved several important clinical and regulatory milestones. In oncology, last weekend's ESMO meeting showcased potential practice-changing advances for several innovative programs, highlighted by the first positive phase III results from our expansive global TroFuse program for sac-TMT in advanced or recurrent endometrial cancer. Additional data shared at the meeting from our partner, Kelun-Biotech, further support the potential of sac-TMT in lung cancer and other tumor types. We are encouraged by the landmark validation of a therapeutic cancer vaccine with positive phase III data presented for intismeran autogene as an adjuvant treatment for certain patients with melanoma.

Speaker #3: Turning to our third quarter results, we delivered solid performance with revenue of $18.1 billion. Reflecting increased contributions from new products, as well as strength in oncology and animal health.

Speaker #3: Caroline will discuss our results in the full-year outlook in greater detail in a moment. We also achieved several important clinical and regulatory milestones. In oncology, last weekend's ESMO meeting showcased potential practice changing advances for several innovative programs highlighted by the first positive phase three results from our expansive global trospuse program for SAC TMT in advanced or recurrent endometrial cancer.

Speaker #3: Additional data shared at the meeting from our partner Kaloon further support the potential of SAC TMT in lung cancer and other tumor types. And we are encouraged by the landmark validation of a therapeutic cancer vaccine with positive phase three data presented for Entismeron AutoGene as an adjuvant treatment for certain patients with melanoma.

Rob Davis: This new approach may offer a tangible opportunity to change the trajectory of a patient's cancer. In ophthalmology, we presented results from the BRUNELLO study evaluating remigromig in diabetic macular edema, a significant milestone for our rapidly advancing retinal disease portfolio. Finally, in immunology, we presented encouraging phase II-B results in HS and look forward to advancing our TL1A development program. This year's clinical and commercial progress underlines the ongoing transformation of our business and provides us with greater visibility into the trajectory of our emerging and expansive new product portfolio. The opportunity we have to drive strong long-term growth beyond the KEYTRUDA LOE period is becoming increasingly clear as we achieve these scientific and commercial milestones. As we look ahead, we will remain focused on successfully executing our launches, broadening and advancing our pipeline, and making meaningful investments to realize the full potential of these opportunities.

Speaker #3: This new approach may offer a tangible opportunity to change the trajectory of a patient's cancer. In ophthalmology, we presented results from the Brunello study evaluating remigramig in diabetic macular edema a significant milestone for our rapidly advancing retinal disease portfolio.

Speaker #3: And finally, in immunology, we presented encouraging phase two B results in HS and look forward to advancing our TL1A development program. This year's clinical and commercial progress underlines the ongoing transformation of our business and provides us with greater visibility into the trajectory of our emerging and expansive new product portfolio.

Speaker #3: The opportunity we have to drive strong long-term growth beyond the Kahtruda LOE period is becoming increasingly clear as we achieve these scientific and commercial milestones.

Speaker #3: As we look ahead, we'll remain focused on successfully executing our launches broadening and advancing our pipeline and making meaningful investments to realize the full potential of these opportunities.

Rob Davis: I want to recognize and thank our dedicated global teams for their ongoing commitment to delivering value for patients, shareholders, and all of our stakeholders. Now I will turn the call over to Caroline.

Speaker #3: I want to recognize and thank our dedicated global teams for their ongoing commitment to delivering value for patients, shareholders, and all of our stakeholders.

Speaker #3: And now, I'll turn the call over to Caroline.

Caroline Litchfield: Thank you, Rob. Good morning. As Rob noted, we delivered solid performance in the quarter, driven by increasing contributions from our compelling array of important new products and continued strength in Oncology and Animal Health. Strong commercial and operational execution continues to propel our near-term performance while we invest to optimize our launches and advance our broad and deep pipeline to create long-term value for patients, customers, and shareholders. Now turning to our Q3 results. Total company revenues were $18.1 billion, an increase of 5%, or 4% excluding the impact of foreign exchange. The following revenue comments will be on an ex-exchange basis. In Oncology, sales of the KEYTRUDA family of products, which includes KEYTRUDA and KEYTRUDA QLEX, increased 6% to $8.6 billion, with global growth driven by strong uptake in earlier stage cancers and continued robust demand for metastatic indications.

Speaker #1: Thank you, Rob. Good morning. As Rob noted, we delivered solid performance in the quarter driven by increasing contributions from our compelling array of important new products and continued strength in oncology and animal health. operational execution continues to propel our near-term performance while we invest to optimize our launches and advance our broad and deep pipeline to create long-term value for patients, customers, and shareholders.

Speaker #1: Total company revenues were Now, turning to our $18.1 billion. An increase of 5% or 4% excluding the impact of foreign exchange. The following revenue comments will be on an ex-exchange basis.

Speaker #1: In oncology, sales of the Kahtruda family of products, which includes Kahtruda and Kahtruda Culex, increased 6% to $8.6 billion. With global growth driven by strong uptake in earlier stage cancers and continued robust demand from metastatic indications.

Caroline Litchfield: Key contributors to growth included strong utilization in tumors that primarily affect women, particularly cervical and breast cancers, as well as increased use of KEYTRUDA plus PADCEV in urothelial cancer. We also saw continued uptake in earlier stage head and neck cancer. As expected, the timing of US customer purchases last year created a headwind to growth, but this was largely offset by an increase in channel inventory, which we expect to unwind in the Q4. Sales of KEYTRUDA QLEX were $830 million. We continue to see adoption increase, which supports our confidence in the trajectory of the product. In our broader Oncology portfolio, WELIREG sales increased 58% to $307 million, driven by increased use in previously treated patients and as adjuvant treatment for certain patients with renal cell carcinoma in the US, as well as continued uptake from ongoing launches in international markets.

Speaker #1: Key contributors to growth included strong utilization in tumors that primarily affect women, particularly cervical and breast cancers, as well as increased use of Kahtruda plus pad ceph in urothelial cancer.

Speaker #1: We also saw continued uptake in earlier stage head and neck cancer. As expected, the timing of US customer purchases last year created a headwind to growth, but this was largely offset by an increase in channel inventory, which we expect to unwind in the fourth quarter.

Speaker #1: Sales of Kahtruda Culex were $830 million we continue to see adoption increase which supports our confidence in the trajectory of the product. In our broader oncology portfolio, Wellyreg sales increased 58% to $307 million driven by increased use in previously treated patients and as adjuvant treatment for certain patients with renal cell carcinoma in the US, as well as continued uptake from ongoing launches in international markets.

Caroline Litchfield: In Vaccines and Infectious Diseases, GARDASIL sales were $2 billion, an increase of 14%. In the US, sales grew 18%, benefiting from a significant CDC purchase and price, while international markets increased 6%. In pneumococcal, CAPVAXIVE sales were $263 million, an increase of 7%, driven by ongoing launches in certain international markets. In the US, sales declined 13% as increased market share was more than offset by lower adult pneumococcal vaccination rates. In RSV, ENFLONSIA sales of $187 million reflect seasonal demand and associated inventory build. In Cardiometabolic and Respiratory, WINREVAIR continued its momentum with global sales of $694 million, an increase of 94%, reflecting strong demand from adults with pulmonary arterial hypertension, as well as a benefit from channel inventory. In the US, nearly 1,600 new patients received a prescription, approximately 30% of whom were on background therapies that did not include a prostacyclin.

Speaker #1: In vaccines and infectious diseases, Gardasil sales were $2 billion. An increase of 14%. In the US, sales grew 18% benefiting from a significant CDC purchase and price while international markets increased 6%.

Speaker #1: In pneumococcal, Capvaxiv sales were $263 million. An increase of 7% driven by ongoing launches in certain international markets. In the US, sales declined 13% as increased market share was more than offset by lower adult pneumococcal vaccination rates.

Speaker #1: In RSV, influenza sales of $187 million reflect seasonal demand and associated inventory build. In cardiometabolic and respiratory, WinRevere continued its momentum with global sales of $694 million an increase of 94% reflecting strong demand from adults with pulmonary arterial hypertension as well as a benefit from channel inventory.

Speaker #1: In the US, nearly 1,600 new patients received a prescription, approximately 30% of whom were on background therapies that did not include a prostocycline. Outside the US, we continue to progress with ongoing launches.

Caroline Litchfield: Outside the US, we continue to progress with ongoing launches. OHTUVAYRE sales were $184 million, reflecting continued demand from adults with COPD, partially offset by a small headwind from the timing of specialty pharmacy purchases. While early, we are encouraged by the initial launch of LIPFENDRA. Prescription trends and physician feedback has been positive. Additionally, we have established programs to support access and affordability for eligible patients. As expected, broad access will take time to build, and we remain confident in the long-term opportunity for this important treatment option for adults with elevated LDL cholesterol. Our Animal Health business delivered growth of 3%. Companion Animal sales increased 6%, driven by new product launches. Livestock sales grew 2% due to higher demand for poultry products. I will now walk you through the remainder of our P&L, and my comments will be on a non-GAAP basis. Gross margin decreased slightly to 81.4%.

Speaker #1: Otaver sales were $184 million. Reflecting continued demand from adults with COPD, partially offset by a small headwind from the timing of specialty pharmacy purchases.

Speaker #1: While early, we are encouraged by the initial launch of Lipvendra. Prescription trends and physician feedback has been positive additionally, we have established programs to support excess and affordability for eligible patients.

Speaker #1: As expected, broad access will take time to build and we remain confident in the long-term opportunity for this important treatment option for adults with elevated LDL cholesterol.

Speaker #1: Our animal health business delivered growth of 3%. Companion animal sales increased 6% driven by new product launches. Livestock sales grew 2% due to higher demand for poultry products.

Speaker #1: I will now walk you through the remainder of our P&L and my comments will be on a non-GAAP basis. Gross margin decreased slightly to $81.4%.

Caroline Litchfield: Operating expenses increased 12% to $7.4 billion, reflecting increased investments to support our launches and advance our diverse early and late-phase pipeline. This increase was partially offset by benefits from our ongoing multi-year optimization effort and the recognition of a portion of the external funding for sac-TMT development. There was also a $400 million upfront charge related to the license agreement with SciBrunch Therapeutics, compared with a $300 million business development charge a year ago. Other expense increased to $420 million, primarily reflecting financing costs related to recent business development transactions. Our tax rate was 10.9%, reflecting a benefit from certain discrete items. Taken together, earnings per share were $2.49, which includes a charge of $0.12 per share related to the SciBrunch Therapeutics license agreement. Now turning to our 2026 non-GAAP guidance. We have narrowed the range and raised the midpoint of both our full-year revenue and EPS guidance.

Speaker #1: Operating expenses increased 12% to $7.4 billion. Reflecting increased investments to support our launches and advance our diverse early and late phase pipeline. This increase was partially offset by benefits from our ongoing multi-year optimization effort and the recognition of a portion of the external funding for SECTMT development.

Speaker #1: There was also a $400 million upfront charge related to the license agreement with CyBranch compared with a $300 million business development charge a year ago.

Speaker #1: Other expense increased to $420 million. Primarily reflecting financing costs related to recent business development transactions. Our tax rate was 10.9% reflecting a benefit from certain discrete items.

Speaker #1: Taken together, earnings per share were $2.49 which includes a charge of $0.12 per share related to the CyBranch license agreement. Now, turning to our 2026 non-GAAP guidance.

Speaker #1: We have narrowed the range and raised the midpoint of both our full-year revenue and EPS guidance. We now expect revenue to be between $66.8 and $67.3 billion.

Caroline Litchfield: We now expect revenue to be between $66.8 billion and $67.3 billion, representing growth of 3% to 4%, including a positive impact from foreign exchange of approximately one percentage point using mid-October rates. Our gross margin assumption remains approximately 81%. Operating expenses are expected to be between $42.4 billion and $42.9 billion. Other expense is still expected to be approximately $1.4 billion. We now expect a full-year tax rate between 32% and 33%. We assume approximately 2.48 billion shares outstanding. Taken together, we expect EPS of $2.77 to $2.82, including a positive impact from foreign exchange of approximately $0.15 using mid-October rates. This range also includes the SciBrunch Therapeutics charge. As you consider your models, there are a few items to keep in mind. Q3 sales benefited by approximately $550 million from favorable purchase timing in the US.

Speaker #1: Representing growth of 3% to 4% including a positive impact from foreign exchange of approximately 1 percentage point using mid-October rates. Our gross margin assumption remains approximately 81%.

Speaker #1: Operating expenses are expected to be between $42.4 and $42.9 billion. Other expense is still expected to be approximately $1.4 billion. We now expect a full-year tax rate between $32 and $33%.

Speaker #1: We assume approximately 2.48 billion shares outstanding. Taken together, we expect EPS of $2.77 to $2.82 including a positive impact from foreign exchange of approximately 15 cents using mid-October rates.

Speaker #1: This range also includes the CyBranch charge. As you consider your models, there are a few items to keep in mind. Third quarter sales benefited by approximately $550 million.

Speaker #1: From favorable purchase timing in the US. We expect the benefit related to Keytruda and WinRevere to fully unwind in the fourth quarter. While the majority of the benefit to vaccines primarily related to Gardasil is expected to unwind next year.

Caroline Litchfield: We expect the benefit related to KEYTRUDA and WINREVAIR to fully unwind in Q4, while the majority of the benefit to vaccines, primarily related to GARDASIL, is expected to unwind next year. As we look forward to 2027, we recently noted an expectation for modest revenue growth. For KEYTRUDA, moderating growth reflects the success we have had in reaching the eligible patients as we now approach peak revenues for certain approved indications. Additionally, we expect the German market to be impacted by policy dynamics. For BRIDION, we expect competition from multiple generics that have now entered the market. For vaccines, we are watching broader market trends given increased hesitancy and reduced utilization. Finally, we also expect underlying operating expenses to increase at a mid to high single-digit rate, reflecting our conviction in the significant opportunity from our expanding pipeline and the growing portfolio of new product launches.

Speaker #1: As we look forward to 2027, we recently noted an expectation for modest revenue growth. For Keytruda, moderating growth reflects the success we have had in reaching the eligible patients as we now approach peak revenues for certain approved indications.

Speaker #1: Additionally, we expect the German market to be impacted by policy dynamics. For Bridion, we expect competition from multiple generics that have now entered the market.

Speaker #1: For vaccines, we are watching broader market trends given increased hesitancy and reduced utilization. Finally, we also expect underlying operating expenses to increase at a mid to high single-digit rate reflecting our conviction in the significant opportunity from our expanding pipeline and the growing portfolio of new product launches.

Caroline Litchfield: Now turning to capital allocation, where our priorities remain unchanged. We will continue to invest in value-creating opportunities that drive both near and long-term growth. We remain committed to the dividend with the goal of increasing it over time. Business development remains an important priority, and we retain financial flexibility within a strong investment-grade credit rating to pursue additional science-driven value-enhancing transactions. We remain on track for approximately $3 billion in share repurchases this year. To conclude, as we head into the Q4, we remain confident in the outlook for our business. Demand for our diverse portfolio of human and animal health products remains strong, and our recent launches are making increasingly meaningful contributions to growth. Our compelling innovative portfolio of pipeline assets continues to progress, leaving us very well positioned to deliver outstanding value for patients, customers, and shareholders now and into the future.

Speaker #1: Now, turning to capital allocation where our priorities remain unchanged. We will continue to invest in value creating opportunities that drive both near and long-term growth.

Speaker #1: We remain committed to the dividend with the goal of increasing it over time. Business development remains an important priority and we retain financial flexibility within a strong investment grade credit rating to pursue additional science-driven value enhancing transactions.

Speaker #1: We remain on track for approximately $3 billion in share repurchases this year. To conclude, as we head into the fourth quarter, we remain confident in the outlook for our business.

Speaker #1: Demand for our diverse portfolio of human and animal health products remains strong and our recent launches are making increasingly meaningful contributions to growth. Our compelling innovative portfolio of pipeline assets continues to progress leaving us very well positioned to deliver outstanding value for patients, customers, and shareholders now and into the future.

Caroline Litchfield: With that, I would like to turn the call over to Dean.

Speaker #1: With that, I'd like to turn the call over to Dean Li.

Dean Li: Thank you, Caroline. Good morning, everyone. The Q3 was marked by a number of significant clinical and regulatory milestones. Today, I will provide updates in oncology, cardiometabolic and respiratory, immunology, and ophthalmology. I will close by highlighting upcoming milestones. Starting with oncology, as Rob noted, data from several pivotal studies were presented at ESMO, which exemplify our clinical development approach and reflect how KEYTRUDA is informing our pipeline progress. ESMO marked the first presentation of detailed phase III findings from our expansive global TroFuse development program for sac-TMT, our TROP2-directed ADC with a unique bifunctional linker. The TroFuse program is guided by a two-pronged development strategy. First, we are moving with speed and rigor to establish early leadership in multiple disease and treatment settings. Many of these first-mover opportunities are in gynecologic cancers, where there remains significant unmet need.

Speaker #2: Thank you, Caroline. Good morning, everyone. The third quarter was marked by a number of significant clinical and regulatory milestones. Today, I will provide updates in oncology, cardiometabolic, and respiratory immunology and ophthalmology.

Speaker #2: I will close by highlighting upcoming milestones. Starting with oncology, as Rob noted, data from several pivotal studies were presented at ESMO. Which exemplify our clinical development approach and reflect how Keytruda is informing our pipeline progress.

Speaker #2: ESMO marked the first presentation of detailed phase three findings from our expansive globotrofuse development program for SECTMT. Our trope two directed ADC with a unique bifunctional linker.

Speaker #2: The trophuse program is guided by a two-prong development strategy. First, we are moving with speed and rigor to establish early leadership in multiple disease and treatment settings.

Speaker #2: Many of these first mover opportunities are in gynecologic cancers where there remain significant unmet need. The trophuse 005 study presented at ESMO evaluated SECTMT in patients with endometrial cancer whose disease has progressed following platinum chemotherapy and anti-PD-1 L1 immunotherapy.

Dean Li: The TroFuse 005 study presented at ESMO evaluated sac-TMT in patients with endometrial cancer whose disease has progressed following platinum chemotherapy and anti-PD-L1 immunotherapy, demonstrating a remarkable near seven-month improvement in median overall survival compared to chemotherapy alone. Endometrial cancer is one of the few cancers with increasing incidence and mortality rates worldwide. These patients currently face a very poor prognosis, and we look forward to continuing to work with the FDA to deliver this potential new option as quickly as possible. Second, we are exploring the potential of sac-TMT in certain types of breast and lung cancers where we believe we can be differentiated.

Speaker #2: Demonstrating a remarkable near seven-month improvement in median overall survival compared to chemotherapy alone. Endometrial cancer is one of the few cancers with increasing incidence and mortality rates worldwide.

Speaker #2: These patients currently face a very poor prognosis and we look forward to continuing to work with the FDA to deliver this potential new option as quickly as possible.

Speaker #2: Second, we are exploring the potential of SECTMT in certain types of breast and lung cancers where we believe we can be differentiated. In first line, PD-L1 negative non-squamous non-small cell lung cancer results from the optotrope lung 06 study conducted by our partner Keelan showed a meaningful improvement and progression-free survival for SECTMT plus Keytruda.

Dean Li: In first-line, PD-L1 negative non-squamous, non-small cell lung cancer results from the OptiTROP-Lung06 study conducted by our partner, Kelun-Biotech, showed a meaningful improvement in progression-free survival for sac-TMT plus KEYTRUDA over KEYTRUDA plus chemotherapy, raising the possibility that novel combinations may improve upon the high bar set by KEYTRUDA plus chemotherapy. Our global TroFuse program includes 5 ongoing phase III studies in various non-small cell lung cancer settings. We plan to investigate sac-TMT in combination with MK-2010, our PD-1xVEGF bispecific in first-line non-small cell lung cancer. Engagement with the FDA has been productive, and we anticipate phase III studies in this setting in the H1 2027. Now turning to intismeran. Our deep understanding of tumor biology continues to inform the next generation of our oncology pipeline, including the development of an mRNA therapeutic cancer vaccine based on the unique mutational signature of a patient's tumor.

Speaker #2: Over Keytruda plus chemotherapy. Raising the possibility that novel combinations may improve upon the high bar set by Keytruda plus chemotherapy. Our global trophuse program includes five ongoing phase three studies in various non-small cell lung cancer settings.

Speaker #2: We plan to investigate SECTMT in combination with MK 2010, our PD-1 VEGF bispecific in first line non-small cell lung cancer. Engagement with the FDA has been productive and we anticipate phase three studies in this setting in the first half of 2027.

Speaker #2: Now, turning to Antismaran. Our deep understanding of tumor biology continues to inform the next generation of our oncology pipeline including the development of an mRNA therapeutic cancer vaccine based on the unique mutational signature of a patient's tumor.

Dean Li: ESMO marked the unveiling of landmark results for intismeran, an investigational individualized neoantigen therapy developed in collaboration with Moderna plus KEYTRUDA as adjuvant therapy for melanoma. Results of the INTerpath-001 study demonstrated clinically meaningful improvements in recurrence-free survival and distant metastasis-free survival for intismeran plus KEYTRUDA over standard of care KEYTRUDA in patients with completely resected stage 2B, 2 IV melanoma. These results, building on the body of evidence from the phase IIb study, strengthen our confidence in the curative potential of intismeran when given in combination with KEYTRUDA. We are actively engaged with the FDA on regulatory submission. Additionally, we are progressing a robust INTerpaths clinical development program across a range of immune-sensitive tumors, including indications in earlier stages of disease where KEYTRUDA has established efficacy. Phase III studies are ongoing in melanoma and non-small cell lung cancer, which are characterized by high mutational burden.

Speaker #2: ESMO marked the unveiling of landmark results for Antismaran. An investigational individualized neoantigen therapy developed in collaboration with Moderna plus Keytruda as adjuvant therapy for melanoma.

Speaker #2: Results of the interpath 001 study demonstrated clinically meaningful improvements in recurrence-free survival and distant metastases-free survival for Antismaran plus Keytruda over standard of care Keytruda in patients with completely resected stage two B, two four melanoma.

Speaker #2: These results building on the body of evidence from the phase two B study strengthen our confidence in the curative potential of Antismaran when given in combination with Keytruda.

Speaker #2: We are actively engaged with the FDA on regulatory submission. Additionally, we are progressing a robust interpath clinical development program across a range of immune sensitive tumors including indications in earlier stages of disease where Keytruda has established efficacy.

Speaker #2: Phase three studies are ongoing in melanoma and non-small cell lung cancer which are characterized by high mutational burden. Ongoing phase two studies are also evaluating tumors where lower mutational burden including certain bladder and renal cancers to inform potential future expansion.

Dean Li: Ongoing phase II studies are also evaluating tumors with lower mutational burden, including certain bladder and renal cancers, to inform potential future expansion. I look forward to sharing further updates on these and other oncology programs. Now to a few regulatory updates. Subcutaneous pembrolizumab and berahyaluronidase alfa was approved by regulatory authorities in Japan and China. In Europe, we received approval for KEYTRUDA plus PADCEV as a perioperative treatment for resectable muscle-invasive bladder cancer, and in the US, the FDA approved WELIREG plus LENVIMA for the treatment of patients with previously treated renal cell carcinoma. Regarding ifinatamab deruxtecan, together with Daiichi Sankyo, we made the decision to withdraw the biologic license application seeking accelerated approval. Multiple studies of I-DXd are ongoing in small cell lung cancer, prostate cancer, and other tumor types.

Speaker #2: I look forward to sharing further updates on these and other oncology programs. Now, to a few regulatory updates. Subcutaneous pembrolizumab and very hyaluronidase alpha was approved by regulatory authorities in Japan and China in Europe we received approval for Keytruda plus passive as a paraoperative treatment for resectable muscle invasive bladder cancer and in the US the FDA approved Wellereg plus Lymvema for the treatment of patients with previously treated renal cell carcinoma.

Speaker #2: Regarding infinitimab dirextokan, together with Daiichi Sankyo we made the decision to withdraw the biologic license application seeking accelerated approval. Multiple studies of IDXD are ongoing in small cell lung cancer, prostate cancer, and other tumor types.

Dean Li: Next, in cardiometabolic and respiratory, recently, the FDA approved a label update for WINREVAIR, incorporating results from the phase III HYPERION study, providing further evidence to support its use earlier in the treatment journey for adults with pulmonary arterial hypertension. With WINREVAIR, we introduced activin signaling inhibition, a novel mechanism targeting the underlying vascular remodeling that drives disease progression. Building on the findings from the phase II CADENCE trial, we are taking an important step to extend the application of activin signaling inhibition beyond Group 1 PAH. The upcoming phase III Core study will evaluate patients with combined post and pre-capillary pulmonary hypertension associated with heart failure with preserved ejection fraction. This distinct population within Group 2 pulmonary hypertension has similar vascular characteristics to PH and no currently approved treatment option. Next, in immunology.

Speaker #2: Next, in cardiometabolic and respiratory, recently the FDA approved the label update for Winrevere, incorporating results from the Phase 3 Hyperion study, providing further evidence to support its use earlier in the treatment journey for adults with pulmonary arterial hypertension.

Speaker #2: With Winrevere, we introduced active and signaling inhibition, a novel mechanism targeting the underlying vascular remodeling that drives disease progression. Building on the findings from the Phase 2 Cadence trial, we are taking an important step to extend the application of active and signaling inhibition beyond Group 1 PAH.

Speaker #2: The upcoming phase three core study will evaluate patients with combined post and pre-capillary pulmonary hypertension associated with heart failure with preserved ejection fraction. This distinct population within group two pulmonary hypertension has similar vascular characteristics to PAH and no currently approved treatment options.

Speaker #2: Next, in immunology, last month at EADV, positive phase two B results were presented for 2-lisocobart in patients with hydrinitis suppurativa making it the first anti-T01a antibody to demonstrate positive clinical data in a dermatology indication.

Dean Li: Last month at EADV, positive phase IIb results were presented for tulisokibart in patients with hidradenitis suppurativa, making it the first anti-TL1A antibody to demonstrate positive clinical data in a dermatology indication. The study demonstrated promising clinical responses and an encouraging safety profile. Based on these findings, we plan to advance tulisokibart into phase III development in HS. Finally, to ophthalmology. As Rob mentioned, earlier this month, results were presented from the phase IIb/III BRUNELLO study, the first of two pivotal studies evaluating remigromig, a novel Wnt agonist in adults with DME. BRUNELLO achieved its primary endpoint with both doses of monthly remigromig, demonstrating non-inferior best-corrected visual acuity compared to monthly 0.5 milligram ranibizumab at one year. While anti-VEGF therapies have transformed the treatment of DME, disease activity persists in many patients, highlighting the need for new therapeutic options.

Speaker #2: The study demonstrated promising clinical responses and an encouraging safety profile. Based on these findings, we plan to advance 2-lisocobart into phase three development in HS.

Speaker #2: Finally, to ophthalmology as Rob mentioned, earlier this month, results were presented from the phase two B/3 Brunello study. The first of two pivotal studies evaluating remigramig a novel WINT agonist in adults with DME.

Speaker #2: Brunello achieved its primary endpoint with both doses of monthly remigramig demonstrating noninferior best corrected visual acuity compared to monthly 0.5 milligram ranibizumab at one year.

Speaker #2: While anti-VEGF therapies have transformed the treatment of DME, disease activity persists in many patients highlighting the need for new therapeutic options. Brunello provides clinical evidence that activation of the WINT pathway can achieve noninferior efficacy to an anti-VEGF agent in DME.

Dean Li: BRUNELLO provides clinical evidence that activation of the Wnt pathway can achieve non-inferior efficacy to an anti-VEGF agent in DME. If confirmed in the companion BAROLO trial, remigromig could introduce a promising new and orthogonal mechanism and help advance the field of ophthalmology toward therapeutic strategies involving multiple pathways. In closing, the breadth of these milestones reflects our progress in translating novel advances in the understanding of disease biology into potentially significant medicines across diverse therapeutic areas. Over the next 12 months, we anticipate several important clinical and regulatory milestones, including in immunology for tulisokibart, we are compiling data from the phase III ATLAS-UC study and expect to share the results in the near term. In ophthalmology, the readout of the BAROLO study of remigromig. In cardiometabolic and respiratory, the initiation of the phase III Core study.

Speaker #2: If confirmed in the companion Barolo trial, remigramig could introduce a promising new and orthogonal mechanism and help advance the field of ophthalmology toward therapeutic strategies involving multiple pathways.

Speaker #2: In closing, the breadth of these milestones reflects our progress in translating novel advances in the understanding of disease biology into potentially significant medicines across diverse therapeutic areas.

Speaker #2: Over the next 12 months, we anticipate several important clinical and regulatory milestones including in immunology for 2-lisocobart, we are compiling data from the phase three ATLAS UC study and expect to share the results in the near term.

Speaker #2: In ophthalmology, the readout of the Barolo study of remigramig in cardiometabolic and respiratory, the initiation of the phase three core study in infectious disease anticipated regulatory filings for azelotrivir plus lenacapavir the potential first once weekly oral two drug treatment regimen for HIV.

Dean Li: In infectious disease, anticipated regulatory filings for islatravir plus lenacapavir, the potential first once-weekly oral two-drug treatment regimen for HIV. Data from the phase III ANCHOR study evaluating MK-1406, our investigational long-acting and strain-agnostic antiviral designed to prevent influenza, and the data from the phase III EXPrESSIVE program of our investigational once-monthly oral HIV PrEP option, alimatravir. Finally, in oncology, the potential approval of sac-TMT in endometrial cancer and additional phase III readouts. The anticipated regulatory filing of intismeran, and additional readouts in multiple other programs. Now I will turn the call back to Peter.

Speaker #2: Data from the phase three anchor study evaluating MK1406 are investigational long-acting and strain agnostic antiviral designed to prevent influenza and the data from the phase three expressive program of our investigational once monthly oral HIV prep option alimatriver.

Speaker #2: And finally, in oncology, the potential approval of SACTMT in endometrial cancer and additional phase three readouts. The anticipated regulatory filing of anticiparan and additional readouts in multiple other programs.

Speaker #2: And now, I will turn the call back to Peter.

Peter Dannenbaum: Thanks, Dean. Before we get started with Q&A, I am very pleased to introduce Jannie Oosthuizen and Brian Foard who are with us this morning to help address questions. As a reminder, Jannie serves as President of our Oncology business unit, as well as MSD International. Brian serves as President of our Specialty, Pharma & Infectious Diseases business unit. I would also like to request that analysts limit themselves to a single question today so that we can get to as many different questioners as possible in the time that we have. Julie, if you could please start the Q&A session. Thank you.

Speaker #1: Thanks, Dean. Before we get started with Q&A, I'm very pleased to introduce Yani Ostazin and Brian Ford who are with us this morning to help address questions.

Speaker #1: And as a reminder, Yani serves as president of our oncology business unit as well as MSD International. And Brian serves as president of our specialty pharma and infectious diseases business unit.

Speaker #1: I'd also like to request that analysts limit themselves to a single question today so that we can get to as many different questionnaires as possible in the time that we have.

Speaker #1: So Julie, if you could please start the Q&A session. Thank you.

Operator: Thank you. Ladies and gentlemen, if you wish to ask a question, please press Star 1 on your telephone keypad. You may withdraw your question at any time by pressing Star 2. If you are using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a question, you may press Star 1. One moment, please, for our first question. Our first question comes from Chris Schott with JPMorgan. Your line is open.

Speaker #3: Thank you. Ladies and gentlemen, if you wish to ask a question, please press one on your telephone keypad. You may withdraw your question at any time by pressing star two.

Speaker #3: If you are using a speakerphone, please pick up the handset before pressing the numbers. Once again, if you have a question, you may press star one.

Speaker #3: One moment, please, for our first question. Our first question comes from Chris Shot with JP Morgan. Your line is open.

Chris Schott: Great. Thanks so much for the question, and congrats on all the progress. I guess my question, you recently made some comments on 2027, both top line and spend, and maybe just a two-part question. I am just interested, do you feel that that is now appropriately reflected in consensus estimates? Then just given the R&D spend we are seeing for the company in the near term, as well as the longer-term pipeline de-risking we have seen, is it now fair to think about earnings growing off of this type of level as we move through the KEYTRUDA LOE? I guess, asked a different way, does this R&D spend effectively pull forward your trough earnings so we can think more about earnings growth for Merck as we look out to the 2030s? Thanks so much.

Speaker #4: Great. Thanks so much for the question and congrats on all the progress. I guess my question, you recently made some comments on 2027, both top line and spend.

Speaker #4: And I made just two part questions. I'm just interested, do you feel that that's now appropriately reflected in consensus estimates? And then just given the R&D spend we are seeing for the company in the near term, as well as the longer term pipeline de-risking we've seen, is it now fair to think about earnings growing off of these type of level as we move through the key Keytruda LOE, I guess, that's a different way, does this R&D spend effectively pull forward your trough earnings so we can think more about earnings growth for Merck as we look out to the 2030s?

Speaker #4: Thanks so much.

Caroline Litchfield: Chris, thank you for the question. First, if I can maybe provide everybody the headlines around our comments on 2027, then I will answer the specific questions. For 2027, we see it as another year of investment as we invest behind our expansive pipeline and our new product launches to drive long-term growth. Specifically in 2027, we expect moderate top-line growth, and that is as a result of the strong contributions we expect from our new product launches as well as animal health that will be partially offset by more than $2 billion of headwinds as a result of generic competition and LOE impacting BRIDION, JANUVIA family of products, as well as ADEMPAS. We do expect KEYTRUDA to continue to be an important contributor to our overall revenues, although we do see growth moderating, and that is as we have reached peak penetration in a number of indications.

Speaker #3: Chris, thank you for the question. First, if I can maybe provide everybody the headlines around our comments on 2027, and then I'll answer the specific questions.

Speaker #3: For 2027, we see it as another year of investment as we invest behind our expansive pipeline and our new product launches to drive long-term growth.

Speaker #3: Specifically in 2027, we expect moderate top-line growth, and that's as a result of the strong contributions we expect from our new product launches, as well as Animal Health, that will be partially offset by more than $2 billion of headwinds as a result of generic competition and LOE impacting Bridion, the Januvia family of products, as well as Edempas.

Speaker #3: We do expect Keytruda to continue to be an important contributor to our overall revenues although we do see growth moderating. And that's as we've reached peak penetration in a number of indications.

Caroline Litchfield: While we also expect headwinds to price in our ex-US markets, and we are watching the policy dynamics in Germany. From a vaccines perspective, we have seen a benefit of a CDC buy-in in 2026 of approximately $250 million that will unwind in 2027. Now, as we look at the rest of the P&L, gross margin will increase given the roll-off of the royalty on KEYTRUDA. As you have noted, we expect expenses to increase because we are fully investing behind our strong pipeline as well as our launches. We do expect slightly higher interest expense and a slightly higher tax rate. All in all, 2027 marks a year of investment for strong growth in our future, which is all in part to drive our strategy of how our company grows beyond the KEYTRUDA LOE.

Speaker #3: While we also expect headwinds to price in our XUS markets and we are watching the policy dynamics in Germany. From a vaccines perspective, we have seen the benefit of a CDC buy-in in 2026 of approximately $250 million that will unwind in 2027.

Speaker #3: Now, as we look at the rest of the P&L, growth margin will increase given the roll-off of a royalty on Keytruda. As you've noted, we expect expenses to increase because we are fully investing behind our strong pipeline as well as our launches.

Speaker #3: And we do expect slightly higher interest expense and a slightly higher tax rate. But all in all, 2027 marks a year of investment for strong growth in our future, which is all in part to drive our strategy of how our company grows beyond the Keytruda LOE.

Caroline Litchfield: Now, as we look at that, we see the KEYTRUDA LOE as really more of a hill on the overall revenues of our company as we will, in short order, then return to strong growth. As we look at consensus estimates for 2027, there are a number of different estimates from the different analysts, and some have incorporated the messaging that we have given. Many have not yet. Hopefully, this will provide clarity as to our expectations for 2027. As we look at earnings as we move forward, we do expect to see our company have earnings as we move towards the LOE period grow. We do expect, as I have noted, a shallow dip in revenues in the initial period post the price setting through IRA and the LOE, but to quickly return to growth.

Speaker #3: Now, as we look at that, we see the Keytruda LOE as really more of a hill on the overall revenues of our company as we will in short order then return to strong growth.

Speaker #3: As we look at consensus estimates for 2027, there are a number of different estimates from the different analysts, and some have incorporated the messaging that we've given; many have not yet.

Speaker #3: So hopefully this will provide clarity as to our expectations for 2027. And as we look at earnings as we move forward, we do expect to see our company have earnings as we move towards the LOE period growth.

Speaker #3: We do expect, as I've noted, a shallow dip in revenues in the initial period post the price setting through IRA and the LOE, but to quickly return to growth.

Caroline Litchfield: We would expect the earnings profile to probably mirror that given the expansive pipeline that we have and the continued studies that we will be doing and supporting, as well as the launches that are coming through year over year. Headline, confident in our future, confident in our pipeline that will drive long-term growth and patient benefit and enable us to offset over time the KEYTRUDA LOE.

Speaker #3: And we would expect the earnings profile to probably mirror that given the expansive pipeline that we have and the continued studies that we will be doing and supporting as well as the launches that are coming through year over year.

Speaker #3: So headline confident in our future, confident in our pipeline that will drive long-term growth and patient benefit and enable us to offset over time the Keytruda LOE.

Peter Dannenbaum: Great. Thank you, Chris. Next question, please, Julie.

Speaker #1: Great. Thank you, Chris. Next question please, Julie.

Operator: Our next question comes from Vamil Divan with Guggenheim Securities. Your line is open.

Speaker #3: Thank you. Our next question comes from Vamal Devan with Guggenheim Securities. Your line is open.

Operator: Our next question comes from Vamil Divan with Guggenheim Securities. Your line is open.

Vamil Divan: Great. Thanks for taking the question, and congrats on all the progress with the pipeline. Maybe just on WINREVAIR, if I could ask a couple. One, if you could quickly just quantify the one-time benefit you saw specifically for WINREVAIR this quarter. I know you kind of grouped it into the $550 million, so overall for the pharma business. Then Dean, I specifically wanted to ask you on the Chorus trial. We did go through the listing there on the clinical. If you can discuss how it is similar or different than what you did with the phase II CADENCE trial in terms of the endpoint, in terms of the inclusion criteria, just to give us a sense of how the patients

Speaker #5: Great. Thank you. Thanks for taking the question and congrats on all the progress. With the pipeline, maybe just on winter review, if I could ask a couple one if you could quickly just quantify the one-time benefit you saw specifically for winter review this quarter.

Speaker #5: I know you kind of grouped it into the $550 million you saw overall for the business. And then, Dean, I specifically wanted to ask you about the Chorus trial.

Speaker #5: We did go through the listing there on clinical you can discuss how it's similar or different than what we did with the phase two cadence trial in terms of the endpoint, in terms of the inclusion criteria, just to give us a sense of how the patients and the study will compare to each other.

Vamil Divan: in the study will compare to each other. Thanks.

Speaker #5: Thanks.

Caroline Litchfield: Thank you, Vamil, for the question. In terms of the timing benefits that we saw in the quarter, if I may give the full picture inclusive of WINREVAIR so that we have it out there for all. We had a benefit in Q3 of $550 million as a result of the timing of purchases. $200 million of that relates to KEYTRUDA, which we will expect to unwind in full in Q4. $50 million relates to WINREVAIR, which we expect to unwind in Q4. A further $300 million relates to our vaccines business, which is predominantly GARDASIL. We expect $50 million to unwind in Q4 and the remaining $250 million to unwind in 2027.

Speaker #3: Thank you Vamal for the question. In terms of the timing benefits that we saw in the quarter, if I may give the full picture inclusive of win repair.

Speaker #3: So that we have it out there for all. We had a benefit in the third quarter of $550 million as a result of the timing of purchases.

Speaker #3: $200 million of that relates to Keytruda, which we will expect to unwind in full in the fourth quarter. $50 million relates to win repair, which we expect to unwind in the fourth quarter.

Speaker #3: A further $300 million relates to our vaccines business, which is predominantly Gardasil. We expect $50 million to unwind in the fourth quarter and the remaining $250 million to unwind in 2027.

Dean Li: Yeah, Vamil, thank you very much for the question. I will just answer it in two parts. The first is I just want to call out for PH Group 1, not Group 2, that the field is increasingly moving to a concept of with activin signaling inhibitor, the potential of remission. You have seen that in the European guidelines that have come out, and we are hopeful that the similar sort of standard will take. This is really important because it suggests, similar to ACE inhibition in left heart failure, that in this right heart failure with PH Group 1, that physicians in the field can think differently about the treatment paradigm. The reason I want to bring that up is that you have asked me now about Group 2, which is a heart failure study. We have the CADENCE study.

Speaker #4: Yeah, Vamal, thank you very much for the question. I'll just answer it in two parts. The first is I just want to call out for PH group one, not a group two.

Speaker #4: That the field is increasingly moving to a concept of with active and signaling inhibitor, the potential of remission. And you've seen that in the European guidelines that have come out and we're hopeful that the similar sort of standard will take.

Speaker #4: This is really important because it suggests, similar to ACE inhibition in left heart failure, that in this right heart failure with PH Group 1, physicians and the field can think differently about the treatment paradigm.

Speaker #4: The reason I want to bring that up is that you've asked me now about group two, which is a heart failure study. We had the CADENCE study.

Dean Li: And what we are going to be doing in the course study, I just want it to be pretty clear, we are not expanding the patient population in any substantive way. There are details in relationship to how we are going to execute on the trial. But we really think that, quote unquote, "This patient population that was seen in the CADENCE has an incredibly high unmet need. There is no approved treatment. It is really poor prognosis, and it is also an orphan indication." And so from the CADENCE, we met primary endpoints, reduction in PVR and important secondary endpoints. We are going to initiate the phase III Chorus this year with a 0.3 milligram per kilogram dose and with time to clinical worsening in the endpoint. We expect that this will be a very attractive trial for patients with Group 2 pulmonary hypertension.

Speaker #4: And what we're going to be doing in the course study, and I just wanted to be pretty clear, we're not expanding the patient population in any substantive way.

Speaker #4: There are details in relationship to how we're going to execute on the trial. But we really think that quote unquote this patient population that was seen in the cadence has an incredibly high unmet need.

Speaker #4: There's no approved treatment. It's really poor prognosis. And it's also an orphan indication. And so from the cadence, you know, we met primary endpoints, reduction in PVR and important secondary endpoints.

Speaker #4: And we're going to initiate the phase three course this year with a 0.3 milligram per kilogram dose. And with time to clinical worsening in the endpoints.

Speaker #4: And we expect that this will be a very attractive trial for patients with group two pulmonary hypertension.

Peter Dannenbaum: Great. Thanks, Vamil. Next question, please.

Speaker #1: Great. Thanks, Vamal. Next question please.

Operator: Thank you. Our next question comes from Michael Yee with UBS. Your line is open.

Speaker #3: Thank you. Our next question comes from Michael Yee with UBS, your line is open.

Michael Yee: Great, thanks. Maybe Dean, if I could just follow up on obviously the very busy ESMO conference. Maybe here you could offer a view about the fact that you have greater confidence in China studies being further replicated across all of your global TroFuse studies. Since I think we have discussed lung cancer enough, maybe you could just comment on where the one or two other sac-TMT indications you think are most notable and that we may not be paying attention to. Thank you.

Speaker #6: Great. Thanks. Maybe Dean, if I could just follow up on obviously the very busy ESMO conference. Maybe here you could offer a view about the fact that you have greater confidence in China studies being further replicated across all of your global trophy studies.

Speaker #6: And since I think we've discussed lung cancer enough, maybe you could just comment on where the one or two other SAC TMT indications you think are most notable and that we may not be paying attention to.

Speaker #6: Thank you. Okay. So I had a hard time hearing, but I think the gist of your question relates to the trope to ADC. That we have our SAC TMT and I would just highlight what was said in the remarks, which is we've always had a two-part strategy.

Dean Li: Okay, so I had a hard time hearing, but I think the gist of your question relates to the TROP2 ADC that we have, our sac-TMT. I would just highlight what was said in the remarks, which is we have always had a two-part strategy. The first part is we had recognized that when we got into this field that there were two TROP2s that were ahead of us, but we were actually surprised that they did not move quickly to indications outside of breast and lung. We thought that there would be an enormous opportunity to do so. You see that in our clinical trials as we move very fast outside of lung and breast. There are trials that we have in lung and breast, but we have moved very fast outside of that. This most recent TroFuse 005 is an evidence of that.

Speaker #6: The first part is we had recognized that when we got into this field that there were two trope twos that were ahead of us, but we were actually surprised that they did not move quickly to indications outside of breast and lung and we thought that there would be an enormous opportunity to do so.

Speaker #6: And you see that in our clinical trials. As we move very fast outside of lung and breast, there are trials that we have in lung and breast, but we've moved very fast outside of that.

Speaker #6: And this most recent trophy use 005 is an evidence of that. The reason why that's important is if you look at that trophy use 005 as a proof point, I would just call your attention to I think it was a presentation, I think in 2025 or 2026 with MK 2870 001 or Keelan 264-01.

Dean Li: The reason why that is important is if you look at that TroFuse 005 as a proof point, I would just call your attention to, I think it was a presentation, I think in 2025 or 2026 with MK-2870-001 or KL264-01. That is the phase I/II endometrial cohort. That was the informative information for us looking at Chinese data that allowed us to figure out how to translate that in a TroFuse 005. The bottom line is that experience working closely with Kelun-Biotech, it is not like you are going to translate them exactly, but it gives you the signal as to how you might translate it into global. That gives us confidence that the Kelun-Biotech data is a really important signal for us and that we are confident that we can translate into the global trials. We hope to replicate that in other indications outside of lung and breast.

Speaker #6: That's the phase one slash two endometrial cohort. That was the informative information for us looking at Chinese data that allowed us to figure out how to translate that in a trophy use 005.

Speaker #6: So the bottom line is that experience working closely with Keelan it isn't like you're going to translate them exactly, but it gives you the signal as to how you might translate it into global so that gives us confidence that the Keelan data is a really important signal for us and that we are confident that we can translate into the global trials.

Speaker #6: And we hope to replicate that in other indications. Outside of lung and breast, but clearly as Marjorie and Ellie have talked recently, we plan to go quite aggressively in lung.

Dean Li: But clearly, as Marjorie and Elliot have talked recently, we plan to go quite aggressively in lung.

Peter Dannenbaum: Great. Thanks, Mike. Next question, please.

Speaker #1: Great. Thanks, Mike. Next question please.

Operator: Thank you. Our next question comes from Courtney Breen with Bernstein. Your line is open.

Speaker #3: Thank you. Our next question comes from Courtney Breen with Bernstein, your line is open.

Courtney Breen: Hi, Merck team. Thanks so much for taking the question today. I just wanted to zoom into the subcutaneous or KEYTRUDA QLEX litigation that is ongoing around the hyaluronidase component of that product. We are seeing obviously reports out of Europe and infringement claims that are being made. Can you just contextualize where we are at in Europe relative to the US?

Speaker #7: Hi, Merck team. Thanks so much for taking the question today. I just wanted to zoom into the subcutaneous or Keytruda Culex litigation that is ongoing around the highly renegade component of that product.

Speaker #7: We're seeing kind of obviously reports out of Europe and kind of unfriendment claims that are being made. Can you just contextualize where we're at in Europe relative to the US?

Courtney Breen: Is this a definitive call? Are there likely paths to moving back towards the launch in these European countries? Is there any risk in the US as we move forward given the path and the intentions and the litigation that is ongoing? Thank you so much.

Speaker #7: Is this a definitive call? Are there likely paths to moving back towards the launch in these European countries? And is there any risk in the US as we move forward given that the path and the intentions and the litigation that is ongoing?

Speaker #7: Thank you so much.

Rob Davis: Yeah. Maybe I will start, Courtney, and then I will turn it over to Jannie. Overall, I just want to emphasize, we feel very strongly that we have IP that gives us freedom to operate as it relates to QLEX. That is why we actually pursued action against others in the field to ensure we could do that. Nothing has changed to our confidence. We see long-term. The injunction you are seeing in Europe is just an injunction until the hearing is held. It does not speak to the merits of our belief. We continue to feel very good that we have a position both in the US and in Europe. Maybe I will let Jannie speak specifically to the implications of Europe and how we see that potentially resolving.

Speaker #1: Yeah, maybe I'll start. Courtney, and then we'll turn it over to Yanni. Overall, I just want to emphasize we feel very strongly that we have IP that gives us freedom to operate as it relates to Culex.

Speaker #1: That's why we actually pursued action against others in the field to ensure we could do that. So nothing has changed to our confidence. We see long-term the injunction you're seeing in Europe is just an injunction until the hearing is held.

Speaker #1: It doesn't speak to the merits of our belief. We continue to feel very good that we have a position both in the US and in Europe that maybe I'll let Yanni speak specifically to the implications of Europe and how we see that potentially resolving.

Jannie Oosthuizen: Yeah. Thank you, Rob, and thank you for the question, Courtney. In relation to the US, as Rob said, we feel really strong about our position in the US, and in fact, you saw the number $830 million of KEYTRUDA QLEX in the quarter or KEYTRUDA subQ in the quarter, which is the majority is the US. Since we received the permanent J-code on 1 April, it has really been a very positive trajectory, and we feel good about the objective of getting to that 30% to 40% adoption in the United States by the end of 2027. So the United States, we are really on a good path. In terms of ex-US, we have always talked about a range of adoption from high adoption markets to much lower adoption. In our high adoption markets, which is the UK, Canada, Australia, we are actually able to supply. We are waiting for the launch in Canada.

Speaker #2: Yeah, thank you, Rob. And thank you for the question, Courtney. In relation to the US, as Rob said, we feel really strong about our position in the US and in fact, you saw the number 830 million of Culex in the quarter or Keytruda sub queue in the quarter, which is the majority is the US since we received the permanent J code on April 1.

Speaker #2: It's really been a very positive trajectory and we feel good about the objective of getting to that 30 to 40% adoption in the United States by the end of 2027.

Speaker #2: So the United States, we really on a good path. In terms of XUS, we've always talked about, you know, a range of adoption from high adoption markets to much lower adoption.

Speaker #2: In a high adoption markets, which is the UK, Canada, Austria, we're actually able to supply. We're waiting for a, you know, the launch in Canada, but these are the high adoption markets.

Jannie Oosthuizen: These are the high adoption markets, and we actually see a high level of adoption in the UK already. So that is also very positive and not challenged by the injunction out of the Netherlands. In terms of Japan and China, also no issue from a supply and launch perspective, and we are waiting to launch in those two markets where there is significant volume, and we have an ambition to get a high level of subcutaneous use. In Europe, where the Dutch ruling is valid for now, as Rob said, we do not disagree with the Dutch court, and we will continue to work to overturn this. So for now, we will not supply in Italy, Denmark, the Netherlands, France, Belgium, and Ireland. These, in general, are smaller volume markets, so it is immaterial in terms of our overall volume of subQ.

Speaker #2: And we're actually see a high level of adoption in the UK already. So that is also very positive and not challenged by the injunction out of the Netherlands.

Speaker #2: In terms of Japan and China, there's also no issue from a supply and launch perspective. We're waiting to launch in those two markets, where there's significant volume, and we have an ambition to achieve a high level of subcutaneous use.

Speaker #2: In Europe, where the Dutch ruling is valid for now, as Rob said, we do not disagree with the Dutch court and we will continue to work to overturn this.

Speaker #2: So for now, we will not supply in Italy, Denmark, the Netherlands, France, Belgium, and Ireland. These in general are smaller volume markets. So it's immaterial in terms of our overall volume of sub queue.

Jannie Oosthuizen: But again, given that we have longer IP, if we would turn this decision positive, we will have time to get back and make this convenient formulation available to patients in these markets as well. So overall, we feel we are in a really good place in terms of subcutaneous adoption and trajectory of where we want to be.

Speaker #2: But again, given that we have longer IP, if we would turn this decision positive, we will have time to get back and make this convenient formulation available to patients in these markets as well.

Speaker #2: So overall, we feel we're in a really good place in terms of subcutaneous adoption and trajectory of where we want to be.

Rob Davis: Excellent. Thank you, Courtney. Next question, please.

Speaker #1: Excellent. Thank you, Courtney. Next question please.

Operator: Thank you. The next question comes from Akash Tewari with Jefferies. Your line is open.

Speaker #3: Thank you. The next question comes from Akash Tawari with Jefferies, your line is open.

Akash Tewari: Hey, thanks so much. It looks like the primary endpoint for your KRAS G12C first-line NSCLC trial was changed from PFS and OS to PFS only back in September, which cut your target enrollment and moved up your primary completion. Do you think this is a part of a larger stance that maybe the FDA is taking here, where hitting on OS is important, but not gating towards initial filing? How could that maybe apply to the design for your first-line sac-TMT PD-1xVEGF bispecific trial you are aiming to start H1 of next year? Thank you.

Speaker #5: Hey, thanks so much. It looks like the primary endpoint for your KRAS G12C first line NACLC trial was changed from PFS and OS to PFS only back in September, which cut your target enrollment and moved up your primary completion.

Speaker #5: Do you think this is part of a larger stance that maybe the FDA is taking here, where hitting on OS is important but not gating towards initial filing?

Speaker #5: And how could that maybe apply to the design for your first line SAC TMT PD1 VEGEF by specific trial you're aiming to start first half of next year?

Speaker #5: Thank you.

Dean Li: Yeah. Thank you very much for actually calling out calderasib. Just step back so that other people who are listening understand. That is our KRAS G12C inhibitor, and we think that MK-1084, calderasib, is a very important molecule. It has the profile that we wish that any RAS molecule would have. It is extremely potent, it is extremely selective, and it can be well combined, for example, with KEYTRUDA in the lung situation and with something like cetuximab in the CRC, and we have seen really strong data. In relationship to our moving forward in relationship to this, I think part of that is discussions and feedback with the FDA. I do believe that all of those endpoints will be important. PFS, OS eventually will all be important. But yes, we are moving with speed and rigor to get this calderasib in first-line lung with KEYTRUDA, but especially KEYTRUDA QLEX, moving quite fast.

Speaker #6: Yeah, thank you very much for actually calling out Calderasib. I just stepped back so that other people who are listening understand. That's our KRAS G12C inhibitor.

Speaker #6: And we think that MK1084 or Calderasib is a very important molecule. It has the profile that we wish that, you know, any RAS molecule would have.

Speaker #6: It's extremely potent. It's extremely selective. And it can be well combined. For example, with Keytruda, in the lung situation and with something like Cytoxamab in the CRC.

Speaker #6: And we've seen really strong data. In relationship to our moving forward in relationship to this, I think, you know, part of that is discussions and feedback from with the FDA.

Speaker #6: I do believe that all of those endpoints will be important. PFS, OS eventually will all be important. But yes, we are moving with speed and rigor to get this Calderasib in first line lung with Keytruda, but especially sub queue Keytruda moving quite fast.

Dean Li: I should also emphasize that there is a difference of how we might have a philosophy in terms of clinical development versus others in this space. For us, what is really important is, again, this is a place where we are thinking about KEYNOTE-189, KEYNOTE-407, and asking ourselves, "Well, how do we displace that with those patients who have a KRAS G12C mutation?" Which is the dominant mutation for RAS in that patient population. Our strategy is not to add it on top of pembro plus chemo, but to use a pembro plus that inhibitor by itself without the chemo so that we can create a chemo-free option for patients.

Speaker #6: I should also emphasize that there is a difference in how we might have a philosophy in terms of clinical development versus others in this space.

Speaker #6: And for us, what's really important is, again, this is a place where we're thinking about keynote 189, keynote 407, and asking ourselves, well, how do we displace that with those patients who have a KRAS G12C mutation, which is the dominant mutation for RAS in that patient population?

Speaker #6: And our strategy is not to add it on top of Pembrol plus chemo, but to use a Pembrol plus that inhibitor by itself without the chemo.

Speaker #6: So that we can create a chemo-free option for patients.

Rob Davis: Great. Thanks, Akash. Next question, please.

Peter Dannenbaum: Great. Thanks, Akash. Next question, please.

Speaker #1: Great, thanks, Akash. Next question, please.

Operator: Thank you. The next question comes from Daina Graybosch with Leerink Partners. Your line is open.

Speaker #3: Thank you. The next question comes from Dana Greybosh with Lyrinc Partners, your line is open.

Daina Graybosch: I have a follow-up that is right on RAS. You have two other RAS assets, one that you licensed out of China. I wonder if you could just step back, Dean, and talk about how you are thinking about the full portfolio across indications and combinations beyond calderasib. Thank you.

Speaker #4: You might have a follow-up that's right on RAS. You have two other RAS assets, one that you license out of China, and I wonder if you could just step back in and talk about how you're thinking about the full portfolio across indications and combinations beyond Calderasib.

Speaker #4: Thank you.

Dean Li: Yeah. Thank you very much for that question. I think it shares a lot of similarities. Our interest in, for example, KRAS G12D is whether we could, for example, replicate what we see in lung with a KRAS G12D in a very similar strategy. As I said, we are using calderasib and MK-1084 as a way to sort of measure what we do. The other place that we have, we think quite good data is calderasib in relationship to CRC, especially in first-line CRC. In calderasib in CRC, KRAS G12C is a really important target, but it is the minority. It is the distinct minority of RAS mutations. KRAS G12D is the sort of more dominant mutation. Our hope is that this KRAS G12D, that we should have important clinical data in the next year or so, will replicate what we have done in KRAS G12C in, for example, lung and CRC.

Speaker #6: Yeah, so thank you very much for that question. I think it shears a lot of similarities. So our interest in, for example, a KRAS G12D is whether we could, for example, replicate what we see in lung.

Speaker #6: With a KRAS G12D, in a very similar strategy. But as I said, we're using Calderasib and 1084 as a way to sort of measure what we do.

Speaker #6: The other place that we have, we think quite good data is Calderasib in relationship to CRC, especially in first line CRC. Now in Calderasib in CRC, KRAS G12C is a really important target, but it's the minority.

Speaker #6: It's the distinct minority of RAS mutations. KRAS G12D is the sort of more dominant mutation. And so our hope is that this KRAS G12D that we are we should have important clinical data in the next year or so, will replicate what we've done in KRAS G12C in, for example, lung and CRC and also we would clearly look to see what it does in pancreas.

Dean Li: And also, we would clearly look to see what it does in pancreas. But our focus has been how do we use calderasib and how do we look at the other isoforms of RAS or the other subtypes of RAS, and how do we recreate what we believe is a really good profile for KRAS G12C, and how do we replicate it for the other subtypes?

Speaker #6: But our focus has been how do we use Calderasib and how do we look at the other isoforms of RAS or the other subtypes of RAS and how to recreate what we believe is a really good profile for KRAS G12C and how do we replicate it for the other subtypes.

Rob Davis: Great. Next question, please.

Peter Dannenbaum: Great. Next question, please.

Speaker #1: Great. Next question please.

Operator: Thank you. The next question comes from Mohit Bansal with Wells Fargo. Your line is open.

Speaker #3: Thank you. The next question comes from Mohit Bonzel with Wells Fargo, your line is open.

Mohit Bansal: Great. Thank you very much for taking my question, and congrats on all the progress. So just trying to stick to TL1A or tulisokibart. So it does look like the field of IBD is moving towards combinations as we try to push remission rates higher in earlier lines of setting. So in that backdrop, how are you thinking about building a combination strategy around TL1A? Do you think it is strategically important to have all the complementary mechanisms in-house, or would you be comfortable partnering with some established marketed product at this point to find the best combination? Thank you.

Speaker #7: Great. Thank you very much for taking my question and congrats on all the progress. So just trying to speak to TL1A or at least, so it does look like the field of IBD is moving towards combinations as we try to push remissance rate higher in earlier lines of setting.

Speaker #7: So in that backdrop, how are you thinking about building a combination strategy around TL1A? Do you think it is strategically important to have all the complementary mechanisms in-house or would you be comfortable partnering with some established marketed products at this point to find the best combination?

Speaker #7: Thank you.

Dean Li: Yeah. You broke up a little bit, but I will just answer in a more general way because I think you are asking a question that is a broader question in immunology. How do you think about combinations and the such? Combinations have been done quite a lot in immunology. They were done back, I think, in the 2018, I cannot remember, 2020 range, and those combinations have not generally given that much benefit. You do not see that combination strategy play out. I do have to give our credit to a company who is more recently advanced sort of combinations, and we will see how that data comes through. The bottom line is combinations could be important. We believe combinations, for example, in oncology are really important. We think combinations of different mechanisms in ophthalmology is really important, and combinations could be really important throughout immunology.

Speaker #6: Yeah, so you broke up a little bit, but I'll just answer in a more general way because I think you're asking a question that's a broader question in immunology.

Speaker #6: How do you think about combinations and the like? You know, combinations have been done quite a lot in immunology. They were done back, I think, in 2018—I can't remember—or maybe 2020.

Speaker #6: And those combinations have not generally given that much benefit, so you do not see that combination strategy play out. I do have to give credit to a company who's more recently advanced combinations.

Speaker #6: And we'll see how that data comes through. But the bottom line is combinations could be important. We believe combinations, for example, in oncology are really important.

Speaker #6: We think combinations of different mechanisms and ophthalmology is really important. And combinations could be really important throughout immunology. However, I think each indication and each sort of compounds that are there will have to play out and we'll have to all do as a field.

Dean Li: However, I think each indication and each sort of compounds that are there will have to play out and will have to all do as a field the work to determine how important and how effective combination therapies are throughout immunology and the different indications.

Speaker #6: The work to determine how important and how effective combination therapies are throughout immunology and the different indications.

Rob Davis: And maybe I will just add, because I think you had a business development angle to that question as well. Starting with, we have several assets coming through early development in-house. We actually have a range of internal assets that could be potential combination partners, but we also remain open on the business development front both in terms of products and development as well as commercialized products. We are looking at all fronts and remain confident that we are positioned to move depending on how we see the field evolve, as Dean said. Thank you, Mohit. Next question, please, Julie.

Speaker #1: And maybe I just add, because I think you had a business development angle to that question as well. So starting with, we have several assets coming through early development in-house.

Speaker #1: So we actually have a range of internal assets that could be potential combination partners, but we also remain open on the business development front, both in terms of products and development as well as commercialized products.

Speaker #1: So we're looking at all fronts. And remain competent in that we are positioned to move depending on how we see the field evolve as Dean said.

Peter Dannenbaum: Thank you, Mohit. Next question, please, Julie.

Speaker #1: Next question please, Julie.

Operator: Thank you. The next question comes from Steve Scala with TD Cowen. Your line is open.

Speaker #3: Thank you. The next question comes from Steve Scala with TD Cowan, your line is open.

Steve Scala: Oh, thank you very much. I am curious what LIPFENDRA sales were in the quarter and what percent of prescriptions are free drug. Despite lots of competitors, Lipitor generated over $800 million in its first year on the market, and I cannot think of any reasons why LIPFENDRA shouldn't do at least that well, and I am wondering if you agree. Thank you.

Speaker #5: Oh, thank you very much. I'm curious what Lyfendra sales were in the quarter and what percent of prescriptions are free drug. Despite lots of competitors, Lipitor generated over $800 million in its first year on the market.

Speaker #5: And I can't think of any reasons why Lyfendra shouldn't do at least that well. And I'm wondering if you agree. Thank you.

Rob Davis: So, appreciate the question. We are, as we highlighted in the opening comments, as Caroline Litchfield laid out, we are focused on affordability and access and the way we have structured this, so we are using couponing and other means. I will let Brian Foard speak to it. I think what you are going to see right now is the script data is quite strong. We are not going to give specifics on our revenue forecasts at the moment. But I will let Brian Foard maybe give comments just so you can get a sense of how we are seeing the scripts evolve.

Speaker #1: So I appreciate the question. You know, we are, as we highlighted in the opening comments, as Caroline laid out, we are focused on affordability and access in the way we've structured this.

Speaker #1: So we are using couponing and other means. I'll let Brian speak to it. I think what you're going to see right now is the script date is quite strong.

Speaker #1: We're not going to give specifics on our revenue forecast at the moment, but I'll let Brian get maybe give comments so she can get a sense of how we're seeing the scripts evolve.

Brian Foard: Yes, Steve, thank you so much for your question. It sounds like you have similar excitement as we do in this particular space. We are seeing really early positive uptake, actually, and I will speak to a couple of the numbers. In spite of the fact that we know that this is a marketplace, but there is a significant amount of inertia, and we have said that it will be a gradual ascent as the prescriptions come in. But I will give you a couple of metrics to think about. So in Q3, we saw more than 11,000 prescriptions, and this is coming from over 6,500 prescribers, and those prescribers are broken down. We are actually seeing not just in cardiologists, but also in general practitioners, which is really encouraging.

Speaker #2: Yeah, Steve, thank you so much for your question. It sounds like you have similar excitement as we do in this particular space as well.

Speaker #2: We are seeing really early positive uptake, actually. And I'll speak to a couple of the numbers, in spite of the fact that we know this is a marketplace, but there is a significant amount of inertia.

Speaker #2: And we've said that it'll be a gradual ascent as the prescriptions come in. But I'll give you a couple of metrics to think about.

Speaker #2: So in the third quarter, we saw more than 11,000 prescriptions with over, and this is coming from over 6,500 prescribers. And those prescribers are broken down.

Speaker #2: We're actually seeing not just in cardiologists, but also in general practitioners, which is really encouraging. But probably what's even a little bit more encouraging than that is we're seeing the signs that expanding beyond the PCSK9 marketplace, the vast majority of prescriptions are coming from patients on other background lipid-lowering therapies rather than switches off of injectable PCSK9s, which is exactly what we had hoped for.

Brian Foard: But probably what is even a little bit more encouraging than that is we are seeing the signs that it is expanding beyond the PCSK9 marketplace. The vast majority of prescriptions are coming from patients on other background lipid-lowering therapies rather than switches off of injectable PCSK9s, which is exactly what we had hoped for. Now, keep in mind, I think as Rob Davis had mentioned, we have sampling and coupon programs that are out there today. That will affect revenue in the short term, but we are also actively in discussions with payers, and the whole goal there is to get as rapid access as possible. Commercial, we expect, as we had mentioned before, large coverage of the access in the commercial space in 2027 timeframe. And then for Medicare, it is actually in the 2028 timeframe. Now, our teams are working really diligently to expedite that and bring it forward.

Speaker #2: Now, keep in mind, I think, as Rob had mentioned, we have sampling and coupon programs that are out there today. That will affect revenue in the short term.

Speaker #2: But we're also actively in discussions with payers, and the whole goal there is to get as rapid access as possible, commercially. We expect, as we had mentioned before, broad coverage of access in the commercial space in the 2027 timeframe.

Speaker #2: And then for Medicare, it's actually in the 2028 timeframe as well. Now, our teams are working really diligently to expedite that and bring it forward.

Brian Foard: But as we said before, this is a place that there is natural inertia in the marketplace, so we are cautious about the early uptake, but early signs are positive for us, and we see this, again, as we said, as a meaningful growth driver for us in the future, a multi-billion opportunity.

Speaker #2: But as we said before, you know, this is a place that there is natural inertia in the marketplace. And so we're cautious about the early uptake, but early signs are positive for us.

Speaker #2: And we see this again, as we said, as a meaningful growth driver for us in the future, a multibillion opportunity.

Rob Davis: Great. Thank you, Steve. Next question please, Julie.

Peter Dannenbaum: Great. Thank you, Steve. Next question please, Julie.

Speaker #1: Great, thank you, Steve. Next question, please, Julie.

Operator: Thank you. The next question comes from Umer Raffat with Evercore ISI. Your line is open.

Speaker #3: Thank you. The next question comes from Umar Rafet with Evercore ISI. Your line is open.

Umer Raffat: Morning, guys. Thanks for taking my question. Dean, I was thinking about the recently presented melanoma data for the cancer vaccine, and my question is, how does that efficacy break down for patients that had a lower number of neoantigens and perhaps even more importantly, patients that did not have a major driver mutation like NRAS or BRAF, et cetera? I am just trying to think through the implications for the upcoming RCC readout. Thank you.

Speaker #7: Morning, guys. Thanks for taking my question. Dean, I was thinking about the recently presented melanoma data for the cancer vaccine. And my question is: how does that efficacy break down for patients that had a lower number of new antigens, and perhaps even more importantly, patients that did not have a major driver mutation like NRAS or BRAF, et cetera?

Speaker #7: I'm just trying to think through the implications for the upcoming RCC readout. Thank you.

Dean Li: Yeah. I want to be a little bit cautious of getting ahead of the data that was presented and the data that we are examining and will likely provide in some time, I think some people have said in the next year or so. I do not want to get ahead of that. But I would just emphasize, and if you do not mind, I am going to take a little bit of time here in relationship to that, which is there was a press conference or investor meeting that Moderna sponsored. I would just call out the two really important experts that they had there, which was Georgina Long, who was important for this trial, and Antoni Ribas. The reason I want to call that out is I have seen some reports about melanoma and all of this.

Speaker #6: Yeah, so I want to be a little bit cautious of getting ahead of the data that was presented and the data that we are examining and will likely provide.

Speaker #6: In some time, I think some people have said in the next year or so. So I don't want to get ahead of that. But I would just emphasize and if you don't mind, I'm going to take a little bit of time here in relationship to that, which is, you know, there was a press conference that or investor meeting that Moderna sponsored.

Speaker #6: And I would just call out the two really important experts that they had there, which was Georgina Long, who was important for this trial, and Antonio Ribas.

Speaker #6: And the reason I want to call that out is I've seen some reports about melanoma and all of this. I just want to call out that Georgina Long was a senior investigator of NADINA.

Dean Li: I just want to call out that Georgina Long was a senior investigator of NADINA, and Antoni Ribas was the senior author of SWOG S1801. I would just quote Antoni Ribas saying, "This is a landmark in cancer drug development." We are eager to present that to the FDA. I do think the data as interpreted by those people who are scientific leaders is that this is a landmark study in its own right. Because of that, we would expect that, or we would hope, I should say, that upon approval, the NCCN guidelines would potentially define this as a new standard of care. So that is the melanoma question. The other question is melanoma itself. You can have a spectrum of TMB within melanoma, but in general, the spectrum of TMB in melanoma is just shifted totally in favor of being high TMB.

Speaker #6: And Antonio Ribas was the senior author of 18 SWOG 1801. And I would just quote Antonio Ribas saying, "This is a landmark in cancer drug development." And so we are eager to present that to the FDA.

Speaker #6: And I do think the data as interpreted by those people who are scientific leaders is that this is a landmark study in its own right.

Speaker #6: And because of that, we would expect—or we would hope, I should say—that upon approval, the NCCN guidelines would potentially define this as a new standard of care.

Speaker #6: So that's the melanoma question. The other question is, melanoma itself, you can have a spectrum of TMB within melanoma, but in general, the spectrum of TMB in melanoma is just shifted it's just shifted totally in favor of being high TMB.

Dean Li: So I would be a little bit cautious for me to over-interpret any data in, for example, lower TMB in melanoma as a signal for RCC. I think the fundamental issue is that what you have seen is that, at least in our hand, checkpoint inhibitors and IO agents, not just ours, but for example, IL-2, have worked. That has been a place that RCC has been a good tumor in relationship to what you would call immunoresponsive. I think TMB is important, but I also think TMB is not the only determinant of immune responsiveness. If you take that view, that is how I look at our upcoming study with RCC. I am not so sure that parsing the TMB within melanoma will give me any increased or decreased confidence in relationship to RCC.

Speaker #6: So I would be a little bit cautious for me to overinterpret any data in, for example, lower TMB in melanoma as a signal for RCC.

Speaker #6: I think the fundamental issue is that what you've seen is that at least in our hands, checkpoint inhibitors and IO agents, not just ours, but for example, IL-2 have worked you know, that has been a place that RCC has been a good tumor in relationship to what you would call immunoresponsive.

Speaker #6: And you know, I think TMB is important, but I also think TMB is not the only determinant of immune responsiveness. And if you take that view, that's how I look at our upcoming study with RCC.

Speaker #6: I'm not so sure that parsing the TMB within melanoma will give me any increased or decreased confidence in relationship to RCC.

Rob Davis: Thank you, Umar. Next question, please.

Peter Dannenbaum: Thank you, Umar. Next question, please.

Speaker #1: Thank you, Umar. Next question please.

Operator: Thank you. The next question comes from Asad Haider with Goldman Sachs. Your line is open.

Speaker #3: Thank you. The next question comes from Asad Haider with Goldman Sachs. Your line is open.

Asad Haider: Great. Thanks for taking the question. A lot of mine have been asked, but maybe one big picture zooming out for you, Rob. Just given the developments over the course of this year, would be great to get any updated framing on how you see the $70 billion revenue opportunity you've talked about by the mid-2030s. You've obviously had a lot of pipeline success over the course of the year. The company continues to transform its portfolio. Things are moving in the right direction to de-risk that number. So maybe just double-click on the pushes and pulls that have occurred to influence that and remind us on what wasn't incorporated into that framing and what surprised you to the positive side and what's still underappreciated. Thank you.

Speaker #2: Great, thanks for taking the question. A lot of mine have been asked, but maybe one big-picture, zooming out for you, Rob—just, given the developments over the course of this year, it would be great to get any updated framing on how you see the $70 billion revenue opportunity you've talked about by the mid-2030s.

Speaker #2: You've obviously had a lot of pipeline success over the course of the year, the company continues to transform its portfolio, things are moving in the right direction to de-risk that number.

Speaker #2: So maybe just double-click on the pushes and pulls that have occurred to influence that and remind us on what wasn't incorporated into that framing and what surprised you to the positive side and what still underappreciated.

Speaker #2: Thank you.

Rob Davis: Yeah, I appreciate that. So overall, the pride I have in what we've done as a company and how we're moving forward given the fact that we've seen so much of our clinical data readout positive to date. Obviously, these are studies, so every card's a new card, and you have to wait to see till the next card's overturned. But that said, what we've seen so far gives me great confidence and increased confidence in that $70 billion. As such, as we've indicated, we expect now to be raising that number, not only because what we're seeing confidence in what we have, but what wasn't included, which is, I think, part of your question. I would just remind you that when we gave that number, we did not have the Terns acquisition included. That is going to be addition to that number.

Speaker #1: Yeah, no, I appreciate that. So, you know, overall, my the pride I have in what we've done as a company and how we're moving forward, given the fact that we've seen so much of our clinical data readout positive to date, you know, obviously, these are studies, so every card is a new card and you have to wait to see the next cards overturned.

Speaker #1: But that said, what we've seen so far gives me great confidence—and increased confidence—in that $70 billion. And as such, as we've indicated, we expect now to be raising that number—not only because of what we're seeing, confidence in what we have—but also what wasn't included, which is, I think, part of your question.

Speaker #1: And I would just remind you that, when we gave that number, we did not have the Turns acquisition included. That is going to be an addition to that number.

Rob Davis: In addition to that, we really put nothing in for the PD-1xVEGF, which now, given what you've heard coming out of several different conferences and other meetings, we have growing confidence in that as a combination agent for us as we think about that with sac-TMT and with everything else. So a lot of excitement there. Sac-TMT itself is probably going to have broader indications as we look forward, given the fact that we're kicking off new studies there as well. Then lastly, and importantly, intismeran. Intismeran was in our initial expectation, but it was based on a product profile that frankly, given the data we have seen, we actually see a better commercial profile than what we expected. So the targeted product profile now is stronger, and so that in and of itself would drive some upside.

Speaker #1: In addition to that, we really put nothing in for the PD-1/VEGF, which now, given what you've heard coming out of several different conferences and other meetings, we have growing confidence in that as a combination agent for us, as we think about that with SAC-TMT and with everything else.

Speaker #1: So a lot of excitement there. SAC TMT itself is probably going to have broader indications as we look forward with given the fact we're kicking off new studies there as well.

Speaker #1: And then lastly, and importantly, in Tismaron, you know, we had in Tismaron was in our initial expectation, but it was based on a product profile that frankly, given the data we have seen, we actually see a better commercial profile than what we expected.

Speaker #1: So the targeted product profile now is stronger and so that in and of itself would drive some upside. So as we look across the portfolio, I feel very good about where we are.

Rob Davis: As we look across the portfolio, I feel very good about where we are and our ability to navigate the KEYTRUDA LOE. Importantly, we have a lot more catalysts coming as you look out over the next 12 to 24 months. I think we need to continue to see those cards, but I feel very good about where we are sitting right now.

Speaker #1: And our ability to navigate the Keytruda LOE and importantly, we have a lot more catalysts coming. As you look out over the next 12 to 24 months.

Speaker #1: So I think we need to continue to see those cards, but I feel very good about where we're sitting right now.

Peter Dannenbaum: Great. Thank you, Asad. Next question, please.

Speaker #2: Great, thank you, Asad. Next question, please.

Operator: Thank you. The next question comes from Terence Flynn with Morgan Stanley. Your line is open.

Speaker #3: Thank you. The next question comes from Terrence Flynn with Morgan Stanley. Your line is open.

Terence Flynn: Great. Thanks for taking the question. Maybe a follow-up to a prior one. Dean, I recognize your comments on melanoma and what it means for other tumor types. What about the implications of the INT-PDAC poster that were presented at ESMO? If you could just help put into context for us and the importance of that as you think about other tumor types. Thank you.

Speaker #5: Great. Thanks for taking the question. Maybe a follow-up to a prior one. Dean, I recognize your comments on melanoma and what it means for other tumor types.

Speaker #5: What about the implications of the INT PDAC poster that were presented at Asimov? We could just help put that into context for us and the importance of that as you think about other tumor types.

Speaker #5: Thank you.

Dean Li: Yeah. I did not enjoy the balmy weather in Spain, and I had Elliot and Marjorie out there. But I listened very carefully to some of the questions that were placed before them and also to our Moderna colleagues. I will just answer in a more broad way. We have four phase III INTerpaths, and we have five phase IIs. There is a strategy to broaden it from melanoma to lung to bladder to RCC within the conservative point of view in relationship of where we know that those are immune responsive and specifically are checkpoint inhibitor responsive and specifically are KEYTRUDA responsive and specifically KEYTRUDA responsive in early stage.

Speaker #6: Yeah, so I did not enjoy the balmy weather in Spain. And I had Elliott and Marjorie out there. But I listened very carefully to some of the questions that were placed before them and also to our Moderna colleagues.

Speaker #6: So I will just answer just in a more broad way. We have like four phase three interpaths and we have five phase twos. There is a strategy to broaden it from melanoma to lung to bladder to RCC within the conservative point of view in relationship of where we know that those are immune responsive and specifically our checkpoint inhibitor responsive and specifically our Keytruda responsive and specifically Keytruda responsive in early stage.

Dean Li: When you look at our trials, I think it is very important because people have asked different questions, and I will get to your pancreatic study, but we have laid it out that what could it do without an IO agent? You see in stage 1 non-small cell lung cancer in INTerpath-014, that is what we are doing. In NMIBC, in the absence of checkpoint inhibitor, we are asking what happens in metastatic, that is first-line melanoma, that is INTerpath-012, and first-line squamous non-small cell lung cancer, INTerpath-013. Specifically, your question of something that is IO non-responsive, that is not where we have placed most of our phase III, phase II, but there are data from other people moving field that suggests that we should look at it. We are testing whether or not with a checkpoint inhibitor or even IO non-responsive tumors, how to think about it.

Speaker #6: When you look at our trials, I think it's very important because people have asked different questions. And I'll get to your pancreatic study, but we have laid it out that what could it do without an IO agent?

Speaker #6: And so you see in stage one, non-small cell lung cancer, in interpath 14, that's what we're doing. In NMIBC, we're asking in the absence of checkpoint inhibitor, we're asking what happens in metastatic, that's first line melanoma, that's interpath 012.

Speaker #6: And first line squamous non-small cell lung cancer, interpath 013. Specifically, your question of something that's IO non-responsive, that's not where we've placed most of our phase three, phase two, but there are data from our other people moving field that suggests that we should look at it.

Speaker #6: And that's where we're testing whether or not, with a checkpoint inhibitor or even IO non-responsive tumors, how to think about it. But I also just want to make sure that everyone understands that there were questions in relationship to perioperative and all of this for melanoma.

Dean Li: But I also just want to make sure that everyone understands that there were questions in relationship to perioperative and all of this for melanoma. We also have questions of perioperative. We are not asking that question so much in melanoma, but we are asking that in non-small cell lung cancer, which is INTerpath-009. I just want to give a sense that some of the questions that were asked that I have seen, we do not have every trial, but I hope that gives you a general sense of we have melanoma, and we are trying to broaden the scope, and we are trying to do the experiments that will teach us not just what tumor type, but how to think about the indication and the mechanism of action.

Speaker #6: We also have questions of perioperative. We're not asking that question so much in melanoma, but we're asking that in non-small cell lung cancer, which is interpath 009.

Speaker #6: So I just want to give a sense that some of the questions that were asked that I've seen we don't have every trial, but I hope that gives you a general sense of we have melanoma and we're trying to broaden the scope and we're trying to do the experiments that will teach us not just what tumor type, but how to think about the indication and the mechanism of action.

Peter Dannenbaum: Great. Thank you, Terence. We know it is a busy day for all of you, and we are at the top of the hour, so we are going to end it there. Thank you all for the very good questions, and please follow up with the IR team for any follow-ups.

Speaker #2: Great. Thank you, Terrence. And we know it's a busy day for all of you. And we're at the top of the hour, so we're going to end it there.

Speaker #2: Thank you all for the very good questions and please follow up with the IR team for any follow-ups.

Operator: Thank you for your participation. You may disconnect at this time.