Merck & Co. Aktie

Welcome to the Merck & Co., Inc., New Jersey USA Third Quarter Sales and Earnings Conference Call. [Operator Instructions] This call is being recorded. If you have any objections, you may discontinue 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.

Thank you, Julie, and good morning, everyone. Welcome to the Third Quarter 2026 Conference Call for Merck & Co., Inc., 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'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. 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 U.S. Private Securities Litigation Reform Act of 1995. 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'd like to turn the call over to Rob.

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, demonstrated particularly by the many new product launches now successfully underway and the important clinical milestones we're achieving that are further derisking 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'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. 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.

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. 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, 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 III data presented for intismeran autogene as an adjuvant treatment for certain patients with melanoma.

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. And finally, in immunology, we presented encouraging Phase IIb 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'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. 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.

And now I'll turn the call over to Caroline.

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 third quarter 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.

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 U.S. 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. 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 U.S. as well as continued uptake from ongoing launches in international markets. In vaccines and infectious diseases, GARDASIL sales were $2 billion, an increase of 14%. In the U.S., sales grew 18%, benefiting from a significant CDC purchase and price, while international markets increased 6%.

In pneumococcal, CAPFEXYV sales were $263 million, an increase of 7%, driven by ongoing launches in certain international markets. In the U.S., sales declined 13% as increased market share was more than offset by lower adult pneumococcal vaccination rates. In RSV, Influenza sales of $187 million reflects 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 U.S., nearly 1,600 new patients received a prescription, approximately 30% of whom were on background therapies that did not include a prostacyclin. Outside the U.S., 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%. 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 multiyear optimization effort and the recognition of a portion of the external funding for SECTMT development.

There was also a $400 million upfront charge related to the license agreement with SciBrunch 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 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. 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 1 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 charge. As you consider your models, there are a few items to keep in mind. Third quarter sales benefited by approximately $550 million from favorable purchase timing in the U.S.

We expect the benefit related to KEYTRUDA and WINREVAIR 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. 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.

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 fourth quarter, 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.

With that, I'd like to turn the call over to Dean.

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. 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 setting.

Many of these first-mover opportunities are in gynecologic cancers where there remains significant unmet need. 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-1-L1 immunotherapy, demonstrating a remarkable near 7-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. In first-line PD-L1 negative non-squamous non-small cell lung cancer results from the OptiTROP-Lung06 study conducted by our partner, Keelin 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 setting. We plan to investigate sac-TMT 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 III studies in this setting in the first half of 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. 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 IIb/IIV 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 INTerpath 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. 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 U.S., 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. Next, in cardiometabolic and respiratory, recently, the FDA approved the 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 I pulmonary hypertension has similar vascular characteristics to PAH and no currently approved treatment options.

Next, in immunology. 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 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 2 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 1 year. While anti-VEGF therapies have transformed the treatment of DME, disease activity persists in many patients, highlighting the need for new therapeutic options. Bruno 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 BRUNELLO 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 in infectious disease, anticipated regulatory filings for islatravir plus lenacapavir, the potential first once-weekly oral 2-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 data from the Phase III express program of our investigational once-monthly oral HIV PrEP option, alimatravir. And 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.

And now I will turn the call back to Peter.

Thanks, Dean. Before we get started with Q&A, I'm very pleased to introduce Jannie Oosthuizen and Brian Foard, who are with us this morning to help address questions. And as a reminder, Jannie 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. I'd also like to request that analysts limit themselves to a single question today so that we can get to as many as possible in the time that we have. So Julie, if you could please start the Q&A session. Thank you.

[Operator Instructions] Our first question comes from Chris Schott with JPMorgan.

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 2-part question. 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 derisking we've 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?

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. 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'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 JANUVIA family of products as well as Adempus. 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.

While we also expect headwinds to price in our ex-U.S. market, 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 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. And we do expect slightly higher interest expense and a slightly higher tax rate. But all in all, '27 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.

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've given, many have not yet. 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 grow. 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. 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. 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.

Great. Thank you, Chris. Next question please, Julie.

Our next question comes from Vamil Divan with Guggenheim Securities.

Congrats on the progress with the pipeline. Maybe just on WINREVAIR, if I could ask a couple. One, if you could quickly just quantify the onetime benefit you saw specifically for WINREVAIR this quarter. I know you kind of grouped it into the $550 million you saw overall for the pharma business. And then Dean, I specifically wanted to ask you on the CORIST trial. We did go through the listing there on clinical. If you can discuss how it's similar or different to 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 and the study will compare to each other.

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 the third quarter 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 the fourth quarter. $50 million relates to WINREVAIR, which we expect to unwind in the fourth quarter. 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.

Yes. Vamil, thank you very much for the question. I'll just answer it in 2 parts. The first is I just want to call out for PAH Group 1, not Group 2, that the field is increasingly moving to a concept of with activin signaling inhibitor, the potential of remission. And you've 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 PAH 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've asked me now about Group 2, which is a heart failure study. We have the CADE study.

And what we're going to be doing in the CR study, I just wanted to be pretty clear, we're not expanding the patient population in any substantive way. There are details in relationship to how we're going to execute on the trial. But we really think that this patient population that was seen in the CAN has an incredibly high unmet need. There's no approved treatment. It's really poor prognosis and it's also an orphan indication. And so from the cadence, we met primary endpoints, reduction in PVR and important secondary endpoints. And we're going to initiate the Phase III course this year with a 0.3 milligram per kilogram dose and with time to clinical worsening in the endpoints. And we enroll -- we expect that this will be a very attractive trial for patients with Group I pulmonary hypertension.

Our next question comes from Michael Yee with UBS.

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. And since I think we've discussed lung cancer enough, maybe you could just comment on where the 1 or 2 other sac-TMT indications you think are most notable and that you may not be paying attention to.

Okay. So I had a hard time hearing, but I think the gist of your question relates to the TroFuse 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 2-part strategy. The first part is we had recognized that when we got into this field that there were 2 TroFuse 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.

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. And this most recent TroFuse-005 is an evidence of that. The reason why that's important is if you look at the 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 Kelun-264-01. That's 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.

So the bottom line is that experience working closely with Kelun, 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 Kelun data is a really important signal for us and that we are confident that we can translate into the global trials. And we hope to replicate that in other indications outside of lung and breast. But clearly, as Marjorie and Elliot have talked recently, we plan to go quite aggressively in lung.

One 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's immaterial in terms of our overall volume of subcu. 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're in a really good place in terms of subcutaneous adoption and trajectory of where we want to be.

The next question comes from Akash Tewari with Jefferies.

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? And how could that maybe apply to the design for your first-line sac-TMT PD-1 VEGF bispecific trial you're aiming to start first half of next year?

Yes. Thank you very much for actually calling out calderasib. I'll just step back so that other people who are listening understand that's our KRAS G12C inhibitor. And we think that MK-1084 or calderasib is a very important molecule. It has the profile that we wish that any RAS molecule would have. 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 cetuximab in the CRC, and we've seen really strong data.

In relationship to our -- moving forward in relationship to this, I think part of that is discussions and feedback from 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 subcu KEYTRUDA moving quite fast. 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. 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. And 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.

Great. Thanks Akash. Next question please.

The next question comes from Daina Graybosch with Leerink Partners.

I have a follow-up on RAS. You have 2 other RAS assets, one that you licensed out of China. I wonder if you could just step back, Dean, and talk about how you're thinking about the full portfolio across indications and combinations beyond calderasib.

Yes. So thank you very much for that question. I think it shares a lot of similarities. So our interest in, for example, KRAS G12D is whether we could, for example, replicate what we see in lung with the 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. .

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. 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 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. 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.

Great. Next question please.

The next question comes from Mohit Bansal with Wells Fargo.

Congrats on all the progress. On all the progress. So just trying to switch to TL1A or tulisokibart. So it does look like the field of IBD is moving towards combinations as we try to push remission rate 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 products at this point to find the best combination?

Yes. 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, how do you think about combinations and the such. Combinations have been done quite a lot in immunology. They were done, I think, in the 2018 -- I can't remember 2020 range. 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 our credit to a company who is more recently advanced sort of combinations, 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.

We think combinations of different mechanisms in 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, the work to determine how important and how effective combination therapies are throughout immunology and the different indications.

And maybe I'd 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. 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 in development as well as commercialized products. So we're 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. .

The next question comes from Steve Scala with TD Cowen.

I'm 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 can't think of any reasons why LIPFENDRA shouldn't do at least that well. And I'm wondering if you agree.

So I appreciate the question. We are -- as we highlighted in the opening comments, as Caroline laid out, we are focused on affordability and access and the way we've structured this. 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 data is quite strong. We're not going to give specifics on our revenue forecast at the moment, but I'll let Brian maybe give comments just so you can get a sense of how we're seeing the scripts evolve.

Yes, Steve, thank you so much for your question. It sounds like you have similar excitement as we do in this particular space as well. We are seeing really early positive uptake. And actually, and I'll speak to a couple of the numbers. In spite of the fact that we know that this is a marketplace, there is a significant amount of inertia. And we said that it will be a gradual ascent as the prescriptions come in. But I'll give you a couple of metrics to think about. 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.

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 of actually 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 PCSK9, which is exactly what we had hoped for. 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. But we're 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 the 2027 time frame. And then for Medicare, it's actually in the 2028 time frame as well. Now our teams are working really diligently to expedite that and bring it forward. But as we said before, 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, and we see this, again, as we said, as a meaningful growth driver for us in the future, a multibillion opportunity.

Thank you, Steve. Next question please, Julie.

The next question comes from Umer Raffat with Evercore ISI. .

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'm just trying to think through the implications for the upcoming RCC readout.

Yes. 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 in sometime, 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 there was a press conference that -- or investor meeting that Moderna sponsored.

And I would just call out the 2 really important experts that they had there, which was Georgina Long, who was important for this trial and Antonio Ribas. 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 NADENA and Antonio Ribas was the senior author of 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. 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.

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

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. That has been a place that RCC has been a good tumor in relationship to what you would call immunoresponsive. And 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. I'm not so sure that parsing the TMB within melanoma will give me any increased or decreased confidence in relationship to RCC.

Thank you, Umer. Next question please.

The next question comes from Asad Haider with Goldman Sachs.

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. 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 derisk 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.

Yes. No, I appreciate that. So 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. Obviously, these are studies. So every card is a new card and you have to wait to see until the next card is overturned. 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 what wasn't included, which is, I think, part of your question.

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 addition to that number. 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. 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.

And then lastly and importantly, intismeran. We had -- 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. So as we look across the portfolio, I feel very good about where we are 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. So I think we need to continue to see those cards, but I feel very good about where we're sitting right now.

The next question comes from Terence Flynn with Morgan Stanley.

Great. 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? Maybe you could just help put that into context for us and the importance of that as you think about other tumor types.

Yes. So 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. So I will just answer just in a more broad way. We have like 4 Phase III INTerpath, and we have 5 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 our checkpoint inhibitor responsive and specifically our KEYTRUDA responsive and specifically KEYTRUDA responsive in early stage.

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. And so you see in stage non-small cell lung cancer in INTerpath-014, 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 and first-line squamous non-small cell lung cancer, INTRPath-013. Specifically your question of something that's IOrespons.'s not where we've placed most of our Phase III, Phase II, but there are data from other people moving field that suggest that we should look at it.

And that's -- we're testing whether or not with a checkpoint inhibitor or IOresponsumors 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. 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 INTRPath009. 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.

Great. Thank you, Terence. 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. Thank you all for the very good questions, and please follow up with the IR team for any follow-ups.

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

Good evening, everyone. Welcome to the investor event of Merck & Company, Inc. Rahway, New Jersey U.S.A. at the European Society of Medical Oncology Annual Meeting. Thank you to all of you who've made the effort to be with us here in Madrid, and thank you to everyone tuning in via the webcast. We're obviously very excited to have this opportunity to speak to you about the data that was presented this weekend in our oncology program.

So during today's call, a slide presentation will accompany our speakers' prepared remarks and has been posted to the Investor Relations section of our website. And before we get started, we'd like to remind you that some of the statements that we make during today's call may be considered forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. 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. Please reference this slide in our presentation and our 2025 10-K, which identifies certain risk factors and cautionary statements.

So again, thank you for coming tonight. Dr. Eliav Barr, Senior Vice President, Head of Global Clinical Development and Chief Medical Officer, will begin our program with opening remarks. And then Dr. Marjorie Green, Senior Vice President and Head of Oncology Global Clinical Development, will provide an overview of the key data updates we presented at ESMO. Eliav will then return with a few closing remarks before we get to all of your Q&A. And with that, I'm happy to turn it over to Eliav.

Sorry, it's a bit rickety up here. All right. Well, thank you, Peter, and thanks to all of you for joining us. It's a real pleasure to be here at ESMO and to have a discussion on the ongoing progress of our oncology portfolio. This has been a really amazing, tremendous ESMO for our company. We've had 3 presidential symposium presentations that I think in many ways, reflect the way in which we've been working to accomplish across the oncology portfolio. And before Marjorie reviews the individual data sets, I'd like to take a step back and put them in context of that broader strategy.

Now as many of you know, in 2021, we outlined 2 strategic objectives to sustain durable leadership in oncology. First, we sought to impact -- to maximize the impact of KEYTRUDA and continue to move into earlier stages of disease, where we believe we have the greatest impact on long-term patient outcomes. We also committed to diversifying our oncology pipeline with innovative investigational candidates with novel mechanisms. And these objectives continue to guide our oncology strategy today.

Now over the last several years, we've expanded KEYTRUDA's impact across tumor types and treatment settings, including through the introduction of KEYTRUDA QLEX, which may offer patients and providers a more convenient administration option compared to KEYTRUDA while providing a comparable safety -- efficacy and safety profile to KEYTRUDA. At the same time, I think we've built a broad pipeline of innovative assets designed to address important biological drivers of cancer and potentially improve outcomes for patients across a wide range of malignancies.

So today, we believe that we are uniquely positioned to advance cancer care through a differentiated portfolio, spanning 3 complementary pillars of biology. The first is immuno-oncology, where we continue to build on our leadership with KEYTRUDA while advancing next-generation approaches such as intismeran autogene and MK-2010. The second is precision molecular targeting, where we're pursuing therapies directed at key oncogenic drivers and disease pathways. The third is tissue targeting, including antibody drug conjugates, T cell engagers designed to deliver potent therapies precisely to tumor cells.

Importantly, these aren't isolated programs. Our strategy is to develop medicines that can stand on their own, but also work together through rational combinations informed by biology and clinical experience and increasingly sophisticated understanding of the disease. This approach allows us to build treatment paradigms that potentially improve efficacy while expanding the number of patients who might benefit from these medicines.

Now the breadth of our portfolio and the diversity of mechanisms represented within it provide us with a strong foundation for long-term innovation. Underlying all of our developmental efforts are several core principles. First, we believe that the best outcomes are often achieved when therapies with different and complementary mechanisms are combined and or used sequentially. Second, we're committed to improving therapeutic precision through biomarker-driven approaches that help identify patients who can benefit the most. And then third, we continue to prioritize earlier stage and potentially curative settings where the opportunity to change the course of disease may be the greatest.

These principles have shaped our development philosophy across the portfolio, and they're reflected in the programs you'll hear today. Importantly, the data being presented at ESMO provide additional validation to this approach and demonstrate meaningful progress across several of our most important oncology programs. So without further ado, I know you want to hear about the data sets. I'll turn it over to Marjorie.

Thank you, Eliav, and hello, all you all. I hope you've been surviving ESMO and the fun of the marathon at sprint's speed. As I look across our oncology portfolio today, what strikes me is how much it's evolved over the last decade. And many of our most important scientific presentations historically centered on KEYTRUDA and rightfully so. Throughout the KEYTRUDA program, we fundamentally changed the treatment landscape for many cancers and developed a deeper understanding of how immunotherapy can benefit patients across different tumor types. Today, KEYTRUDA continues to be an important part of our strategy. We remain focused on extending benefit into earlier stages of disease, understanding long-term outcomes and identifying those patients most likely to benefit from treatment.

But what you're seeing at ESMO this year is also the next chapter of our oncology story. The experience we gained through the development of KEYTRUDA has shaped how we think about biomarkers, combination approaches, earlier intervention and precision medicine. And it's directly informed our investments in areas such as individualized neoantigen therapy and antibody drug conjugates.

In many ways, the data we presented demonstrates how we are applying the lessons of the first generation of immuno-oncology to the next generation of cancer medications and combinations. So data was highlighted by 3 presidential symposia. INTerpath-001 demonstrates the promise of individualized neoantigen therapy, continued evolution of the treatment approach is enhancing immune targeting of cancer and represents the first Phase III data for INT plus KEYTRUDA in the adjuvant setting for certain patients with melanoma. TroFuse-005 demonstrates the potential of sac-TMT in certain patients with advanced or recurrent endometrial cancer and marks the first global Phase III study from our broad program of 18 global Phase III trials. And finally, the third presentation was KEYNOTE-C93, advancing our understanding of how to optimally use KEYTRUDA in certain types of endometrial cancer.

Together, these studies reflect both the promise of our existing portfolio and the emergence of new platforms built upon lessons learned through KEYTRUDA development that have the potential to benefit patients across a broad range of cancers.

So let me start with sac-TMT, which is one of the broadest development programs currently underway in our oncology portfolio. You've heard us describe that each ADC is unique. Not all ADCs are the same. And ADCs are generally designed to deliver highly potent cytotoxic therapy preferentially to cancer cells versus normal tissue. Differences in molecular design of an ADC can have important implications for clinical performance. What particularly excites us about sac-TMT is the thoughtful design of this molecule. sac-TMT is a TROP2-directed ADC with a belotecan-derived topoisomerase I inhibitor payload and unique bifunctional linker that we brought in through our partnership with Kelun Biotech.

The linker includes an irreversible connection to the antibody intended to minimize payload loss in the circulation, along with a pH-sensitive release mechanism designed to facilitate intracellular and intratumoral delivery within tumor cells and supporting bystander effect. This design is also supported by a drug-to-antibody ratio of approximately 7.4. So it's not just the potency of the payload that's important. It's the totality of the structure of the antibody drug conjugate that you need to pay attention to, and we think this one is very special. And based upon the clinical experience generated to date, the encouraging data presented by Kelun and the first global Phase III from our TroFuse program, we believe sac-TMT has the potential to become a cornerstone ADC across multiple tumor types.

Today, we'll talk about the first global Phase III data from the TroFuse development program. It's important to understand the clinical context of endometrial cancer, which remains an area of significant unmet need. It is sixth most common cancer in women globally. And unlike many cancers, it's one of the cancers that's rising in incidence and mortality continues to rise. According to the American Cancer Society, there are an estimated 68,000 new cases of endometrial cancer per year and more than 14,000 deaths from endometrial cancer in the United States are anticipated in 2026. Endometrial cancer is not only a growing significant health challenge, it's also associated with significant health care disparities. Mortality rates among black women remain approximately double of those amongst white women.

Before the introduction of immunotherapy and KEYTRUDA had its first accelerated approval in 2019, patients outcomes who had endometrial cancer that recurrent were quite poor with survival ranging between 12 to 24 months. Since then, we've learned a great deal about the importance of understanding the biology of endometrial cancer, biomarkers such as mismatch repair status and KEYTRUDA-based regimens, and these have fundamentally changed outcome for many people with endometrial cancer.

The challenge is that once the endometrial cancer has progressed after chemotherapy and an anti-PD-1 or PD-L1 immunotherapy, treatment options become very limited and survival is typically measured in months rather than in years. And that was the unmet need that TroFuse-005 was designed to address. TroFuse-005 is our first global Phase III study with sac-TMT that's been presented, demonstrated a statistically significant and clinically meaningful improvement in all 3 clinical endpoints of progression-free survival, overall survival and overall response rate when compared with treatment of physician's choice, which is single-agent chemotherapy. And this occurred in certain patients with recurrent or advanced endometrial cancer. It reduced the risk of disease progression or death by 41% and reduced the risk of death and improved overall survival and reduced that risk by 32%.

The progression increase from 3.9 to 7.2 months is important for these people. But what I was very encouraged by was that absolute improvement of a near 7-month improvement in overall survival for people whose lifespans have been measured in usually less than a year and in months. And so we're getting up to 19 months in this end-stage setting for many people diagnosed with endometrial cancer. The overall response rates doubled, going from 17.3% or almost doubled to 35%. And what -- another thing that I'd like to highlight is the duration of response of 11.1 months. And it's that duration of response combined with that overall response rate that really translates to that clinically compelling efficacy that was seen.

Equally important, the responses were very deep and the durability I just talked about. So I think that this data represents a meaningful advance for these people with advanced endometrial cancer who have received a platinum-based therapy and a PD or PD-L1-based treatment and treatment options are quite limited for them. So this is exciting information for us to see and potentially gives hope to people with this disease. The safety profile of sac-TMT is very consistent with previous studies of sac-TMT and no new safety signals were noted. Discontinuation rates were quite low. It was 3.1% in the sac-TMT arm and 4.9% in the treatment of physician's choice arm and quality of life was maintained over time. These findings represent the first and only positive global Phase III data for a TROP2 ADC or any ADC in endometrial cancer and reinforce our belief that sac-TMT has the potential to become an important treatment option for certain patients with advanced or recurrent disease.

Now I'm going to turn from endometrial cancer in the TroFuse-005 study to sac-TMT in lung cancer. As many of you know, our collaboration with Kelun has generated an extensive body of clinical evidence evaluating sac-TMT across multiple tumor types and treatment settings. At ESMO, Kelun presented encouraging results from OptiTROP-Lung06 study. This was conducted in China in patients with first-line advanced non-squamous non-small cell lung cancer whose tumors have a PD-L1 TPS below 1%. These are the patients who have the worst outcomes with the KEYNOTE-189 regimen and have the need for new therapies.

While pembrolizumab and chemotherapy has improved outcomes, prognosis for this population remains challenging. Median progression-free survival is approximately 6 months and median overall survival approximately 15 months. And what makes this study particularly interesting to me is that it evaluates sac-TMT plus pembrolizumab against a very active control arm, which is the KEYNOTE-189 control arm of pembrolizumab and chemotherapy. And the combination demonstrated a statistically significant and clinically meaningful improvement in progression-free survival, reducing the risk of progression or death by 51%. Median progression-free survival improved from 5.7 months to 15 months, and the duration of response was approximately doubled. Overall survival remains immature, but we observed a favorable trend with a hazard ratio of 0.58.

Safety profile also very consistent with the known safety profile of the individual agents and no new safety signals were seen. This study adds to the growing body of evidence supporting the activity of sac-TMT in non-small cell lung cancer across different PD-L1 expression levels. Importantly, these findings, along with the other data sets evaluating sac-TMT in lung and in other tumors provide additional confidence as we continue advancing our global TroFuse lung cancer and broader TroFuse studies. And it supports our ambition to establish sac-TMT as a cornerstone asset and therapy across a broad range of tumors, recognizing that most oncologists in the community setting see people with multiple different kinds of cancers.

Our TroFuse program currently includes 18 ongoing global Phase III studies and represents the broadest range of disease settings being explored for a TROP2-directed ADC. Approximately 10 of these studies are focused on women's cancers, including endometrial, ovarian, cervical and breast cancer. We are also pursuing data opportunities across lung, bladder cancer and gastric cancer, where TROP2 biology may provide a compelling opportunity for intervention.

Just as KEYTRUDA development taught us where immunotherapy could have its greatest impact, every sac-TMT study provides insights that shape future development decisions. These lessons are already informing for additional studies, novel combinations, biomarker strategies and earlier-stage development opportunities. And we expect the program will continue to evolve as new data emerges.

So let me then transition to the question I think you all have. Let me talk about MK-2010. When I think about our overall oncology strategy, it begins with developing medicines that demonstrate meaningful activity individually and then thoughtfully combining them in ways that may improve outcomes for patients. We believe that Merck is uniquely positioned to evaluate this biology given our extensive experience with KEYTRUDA, our history of developing VEGF-containing regimens and the breadth of assets available for the combination development within our portfolio.

Today, multiple Phase II combination studies are underway evaluating MK-2010 alongside assets such as sac-TMT, WELIREG and other therapies. As we have said in the past, MK-2010 is a Phase III-ready asset. We have had productive discussions with the FDA regarding our Phase III plans. Based on those discussions and the totality of data generated to date, we anticipate initiating Phase III development for MK-2010, including combinations with sac-TMT in the first-line non-small cell lung cancer setting in the first half of 2027. We will provide further updates on these plans in due course.

Turning now to intismeran, our individualized neoantigen therapy with our partners, Moderna, which I believe this is one of the most exciting scientific advances in oncology today. One of the most important lessons we learned is that durable clinical benefit depends upon effective immune recognition of tumor-specific antigens. So we've learned a great deal about what the T cells need, and we use PD-L1 and scores like GEP to understand that, and we understand the importance of the tumor mutational burden in development of tumor-specific antigens. Intismeran was purposely designed around the principle that using a patient's own tumor sample, we can identify the unique mutational fingerprint of their cancer and generate a personalized mRNA-based therapy encoding up to 34 neoantigens specific to that individual patient.

The goal is to create and expand tumor-specific T cell responses and complement the immune activation that already is generated by KEYTRUDA. This represents a fundamentally individualized approach to cancer therapy. Rather than targeting a single shared antigen, each therapy is designed to be tailored to the specific biology of an individual patient's tumor. And at ESMO on Saturday, we presented results from INTerpath-001, which represents an important milestone, both for us and excitement for what our research program can mean for the broader oncology field. This is the first positive Phase III study of an individualized neoantigen therapy and the first positive Phase III study of an mRNA-based cancer therapy for certain patients with melanoma.

Patients with high-risk resected melanoma remain at risk for recurrence despite significant advances made with checkpoint inhibitors. Before immunotherapy, thinking back sort of 2010 and even earlier, 3-year recurrence rates exceeded 65% for many people with high-risk melanoma. KEYTRUDA and other checkpoint inhibitors have improved outcomes for people with resectable high-risk Stage II through IV melanoma, yet unmet need remains. In INTerpath-001, intismeran plus KEYTRUDA significantly reduced the risk of recurrence or death by 42% and reduced the risk of distant metastasis or death by 38% compared with KEYTRUDA alone. Improvements were observed across recurrence-free survival and distant metastasis-free survival and results were generally consistent across subgroups.

The safety profile also was very consistent with what was seen in KEYNOTE-942 and no new safety signals were identified. What we are seeing in Phase III builds upon the body of evidence previously generated in KEYNOTE-942, our Phase IIb study evaluating intismeran in combination with KEYTRUDA compared to KEYTRUDA alone for patients with Stage IIIb, c and IV resected melanoma.

The sensitivity analysis that were done help us understand the shape of recurrence-free survival and distant metastasis-free survival curves. There are 2 distinct periods. When you think about when checkpoint inhibitors first emerged that people had to be talked about non-proportional hazards in the oncology space. And I think that paying attention to this is important because we are doing something that's novel in the oncology area but as seen in other therapeutic areas.

During the first 6 months, the curves are largely overlapping with hazard ratios of 0.99 for RFS and 1.01 for DMFS. After 6 months, the curves separate with hazard ratios improving to 0.42 for RFS and 0.50 for DMFS. This pattern is biologically consistent with what we understand about therapeutic vaccines. Unlike a directly cytotoxic therapy, an individualized neoantigen therapy requires time to prime and boost and repeatedly boost the immune response, expand neoantigen-specific T cells and overcome the anergic or suppressed state created by the tumor microenvironment.

In the Phase II KEYNOTE-942 study, data presented an exploratory analysis of a random subset of patients at AACR at 2025 and then at ASCO in 2026 show a rise in T cells in the first 5 to 6 months after starting intismeran through those repeated doses when compared to the pembrolizumab control arm. The 2 components of the regimen are intended to play complementary roles. Intismeran is designed to generate and expand the T cells directed against neoantigens unique to an individual patient's tumor. Pembrolizumab removes the PD-1 mediated inhibition, enabling those T cells to remain active against the cancer. The early overlap in the curves, therefore, is not unexpected.

During that period, the immune system is being -- the immune response is being primed and boosted. Once a sufficient immune response is developed, the event pattern changes meaningfully with hazard ratios in the 0.4 to 0.5 range beyond 6 months. We have seen the importance of priming and boosting with preventative vaccines, including GARDASIL. While this is a therapeutic cancer setting and the biology is more complex, the underlying principle is similar. Repeated exposure may be needed to generate a sufficiently robust immune response, particularly when trying to overcome preexisting immune suppression. This is a prespecified sensitivity analysis and does not replace the ITT analysis, which is so important in oncology studies. However, it strengthens our confidence that combination is generating a meaningful immune-mediated treatment effect.

INTerpath-001 is only the beginning. One of the things we've been very deliberate about with INT is how we built the development program. We focus first on tumor types where immunotherapy is already established -- and that slide needs to probably progress because you can't see the whole program here. Let me try and see. We focus first on tumor types that immunotherapy is already established, and we believe an earlier intervention provides the greatest opportunity because I lost my place. We now have multiple late-stage studies underway across melanoma, lung cancer, bladder cancer and renal cell carcinoma with multiple studies already enrolled. These trials will be important for signal detection to help us understand the role of INT across tumor types with different biological characteristics, including tumor mutational burden and varying sensitivity to immunotherapy across disease types and also in settings as we have studies in the metastatic setting ongoing as well.

We are also looking at INT as monotherapy and in combination with other drugs such as TICE BCG. As examples, melanoma is a tumor that has high tumor mutational burden and is highly sensitive to IO therapy, whereas renal cell carcinoma, which is IO sensitive, has lower TMB and potentially lower neoantigen expression. The positive Phase III results we have seen in melanoma represent a proof point for the platform. As additional studies mature, we look forward to sharing more data and further defining the potential of individualized neoantigen therapy across oncology.

As we think about the future of oncology, we increasingly see opportunities to combine complementary mechanisms in rational ways that may further improve outcomes for patients. So when you step back and look across our data presentations at ESMO this year, you begin to see the future taking shape. Together, these programs represent the next chapter of our oncology program and our continued commitment to bringing innovative therapies to patients with cancer.

And with that, I'll turn it back to Eliav.

All right. Well, thanks, Marjorie. So as you've heard today, the data presented at -- yes, I know. I mean, seriously. If we fall, can someone just make sure that we don't have -- we get a neck brace. Anyway. So anyway, back to business.

As you've heard today, the data presented at ESMO reflect meaningful progress on several of the programs we believe will help to find the next chapter in our oncology portfolio. Whether it's sac-TMT, intismeran, MK-2010 or the broader portfolio, we really remain focused on advancing therapies that have the potential to address important unmet needs and improve outcomes for patients living with certain types of cancers. The data you've seen today are not isolated achievements. They are the results of a deliberate strategy we established several years ago, maximizing the impact of KEYTRUDA, extending our leadership into earlier stage of disease, building a diversified oncology portfolio spanning multiple biologic pathways, modalities and mechanisms of action.

The progress highlighted today reinforce our confidence in the strategy of the strategy and also the ability to continue to deliver meaningful innovations to patients. Looking ahead, we see the potential of 2 important oncology approvals next year. First, sac-TMT, as you saw -- as you heard, has now generated positive Phase III data in certain types of endometrial cancer through TroFuse-005. It's exciting that this is the first global Phase III study within the TroFuse development program, an important milestone in what we believe could become a cornerstone ADC across multiple tumor types. The FDA has granted a PDUFA date of June 15. And of course, we look forward to continuing to work with regulatory authorities to bring sac-TMT to patients as quickly as possible.

Second, intismeran autogene has delivered the first positive Phase III for an mRNA-based individual neoantigen therapy in melanoma. And that's really strengthened our belief in the potential of this approach and further supports ongoing expansion of the INTerpath program. We're waiting for these efficacy results to really send things into a bigger trajectory. Based on these data, we are already engaging with regulatory authorities, and we look forward to hearing their thoughts.

Now beyond these near-term opportunities, what really excites us most is the breadth and depth of the oncology pipeline that continues to advance behind these lead assets. We see a substantial and diversified set of registration-enabling opportunities enabling through -- extending through the remainder of the decade. Those opportunities span all 3 strategic pillars, the immuno-oncology pillar, the tissue targeting pillar and the precision molecular targeting pillar. They include multiple potential first or best-in-class approaches and encompass a broad range of modalities, including ADCs, antibody drug conjugates, individual neoantigen therapies, T cell engagers, targeted small molecules and then next-generation immunotherapies.

What's particularly important is that many of these programs are being developed not only as stand-alone but also as rational combinations, informed by the more than a decade of experience that we've had with KEYTRUDA and a growing understanding of tumor biology. That approach continues to guide how we think about maximizing benefit for patients and creating the next generation of oncology treatment paradigms.

Taken together, we believe the data presented at ESMO and the development opportunities ahead reinforce our confidence in our oncology strategy and our ability to continue to deliver meaningful innovation for patients over many years to come.

With that, I'll turn it over to Peter for Q&A, and we'll gingerly walk back to my chair.

Okay. Questions. Hayley and Anne from my team have microphones. So if you please wait for a mic. And when the mic comes to you, if you could state your name and firm, that would be really helpful to all of us here and online. So Akash?

Just one quick one and a more in-depth one. The PD-1 VEGF combo with sac-TMT, does that mean we're not necessarily going to get sac-TMT pembro first-line lung studies? I just want to make sure we clarify that. And then for maybe the cancer vaccine, are we going to look back maybe 5, 10 years from now and think the analogy was not about this being a metastatic or even a post-resection drug, but maybe something more similar to GARDASIL. Like you're running a study in a high-risk Stage 1 setting. You're talking about running monotherapy trials as well. We have seen monotherapy kind of durable neoantigen responses. So are we too focused on renal and we really should be looking about going in a precancerous maybe polyp-like setting with this drug?

So maybe I'll ask Marjorie take the first one, and I'll take the second, the vaccine type.

Yes. I think that the data that we've seen from our partners, Kelun with sac-TMT and pembro is quite compelling. And so I see why you're answering the question and part of it, we haven't disclosed the design of what the study would look like because you think about contribution components, you think about potential like really wonderful kind of combinations out there. We do think that the data that's been generated to date with VEGF bispecifics in regards to PFS has been really clinically meaningful and compelling and improved therapeutic index. And so if your goal is really to displace KEYNOTE-189, you want to make sure you're optimizing your chances. And so I'd say stay tuned to what the study design is going to be.

And on the broader question, I think it's really -- it is -- you are right that the nature of INT really remains to be defined. And we -- the way our development program has been set up is to try to address a lot of those questions. And in fact, there is a study now that's looking at earliest stage cancers. Now of course, these studies take quite some time to read out. But I think we invested right at the beginning or at the outset of that.

I do -- I am eager to look at opportunities for INT outside of KEYTRUDA simply because KEYTRUDA, while being wonderful, still has an AE profile that requires careful attention. And so we've already started to look at that in non-muscle invasive bladder cancer with our combination with BCG. But I think that there's going to be opportunities. As you note, earlier on, I think the most important thing that we need to address, and there's a lot of work that's being done right now is to understand how the algorithm worked. The algorithm worked really well. There's no doubt about it. But the amount of data that we're going to be able to crunch now will really tell us a lot about what we need -- what is -- what are the optimal directions that we're going to go. And I expect -- I anticipate that 2027 will have some really interesting studies.

Great. And for the record, that was Akash Tewari from Jefferies. It's okay. Asad?

Great. Asad Haider, Goldman Sachs. Just going back to INT on overall survival for the OptiTROP-Lung06, that demonstrated a notable trend, hazard ratio of 0.77, albeit it was still fairly immature. So do you see the potential for OS to meet stat given powering? The discussant said that no other adjuvant trials have shown this in melanoma have shown an OS benefit so far. And then just is the level of benefit shown compelling for payers in the context of just competitor neoadjuvant regimens? Just any high-level thought there?

I think they're related topics. So if you look at the checkpoint inhibitor study, so looking at, for example, KEYNOTE-054 and looking at the adjuvant pembrolizumab studies, significant clinical benefit has been seen, but they have not yet improved overall survival. And even though melanoma is a disease that can affect the young, about 1/3 of patients diagnosed with melanoma are quite young at diagnosis, the median age is still around 60 or 61. And this is part of why we showed the distant metastasis-free survival. Because that effectively indicates people who do have disease that has -- is likely going to be fatal or has the potential to be fatal. And when that happens, there's significant burden not only for the trauma to that individual, but thinking about it from a health care system that someone has to have biopsies and PET scans and CT scans and additional therapies and loss of productivity and just everything horrible that happens with recurrent cancer, and that's a very strong surrogate.

In the curative setting, our goal is to get people's survival to where it matches age-related survival. Unfortunately, our cancer therapies can't keep things like heart disease and Alzheimer's and motor vehicle accidents from happening. And so I hope that we will see overall survival and us seeing DMFS at the first interim analysis is quite interesting and compelling, but it's going to take time to know whether we are going to see that for certain.

And I think that then relates to your question about payers. I think that it's -- there is a significant burden by having recurrent disease and that distant metastasis-free survival, I think, is the compelling reason when you think about what would happen if somebody did develop liver metastasis or lung metastasis and the downstream consequences of that. Anything else you'd like to add, Eliav?

Yes. I think the 0.77 number was really is exciting. It's small numbers, and so we really have to have those data mature. As somebody who's been sitting around waiting for KEYNOTE-054 to read out, the problem now is for the past 4 years, all the deaths have been heart disease and that kind of stuff. So no secondary malignancies, but it's all been sort of deaths. And death is death, but it's not cancer death. So we're going to look at cancer-free survival as kind of a surrogate. But I think the DMFS is probably the best way to look at that. And so time will tell, but it's very encouraging.

Terence.

Terence Flynn, Morgan Stanley. I guess a 2-part for me. I was just wondering, Eliav, if you can comment on -- from the melanoma data, what gives you confidence in RCC, MIBC? Those are the next 2 readouts that we're going to see here? And then maybe I thought the PDAC poster was pretty interesting, particularly given low TMB. So what are the implications of that for the next set of tumors? And then can RCC and MIBC be registration enabling? Could you file on those potentially?

Sure. Maybe we'll talk about a broader points and then talk about the specifics. I mean, look, this is -- we're in a new era. This is really groundbreaking therapy. And so when we designed the clinical program, we tried to address architype diseases that would enable us to get a certain feel about the breadth of this, almost like trying to feel our way to work the outer limits of what INT could do. We reasoned from the beginning that this was all -- that the most important thing was to have a relatively intact immune system and to try to do this in a curative setting, where the patients haven't yet received strong anticancer therapies, which in -- and of themselves can be -- can cause long-term harm.

And so with that in mind, we also -- we then looked at the KEYTRUDA data and the KEYTRUDA data were surprised -- had some surprises and the surprises in KEYTRUDA was that you didn't need to have high tumor mutational burden kind of cancers to have KEYTRUDA efficacy and in fact, RCC is at archetype. And so you can take the tumors that are high or relatively high TMB. And you look at non-small cell lung cancer and melanoma, and they've got pretty high -- they're all smoking-related stuff. So it's very pretty high TMB. And MIBC is not terribly different than that. I mean, it's a little bit less TMB, but it's also very much a percentage and driven disease with high responsiveness to pembrolizumab.

RCC, I think, was a deliberate step to ask the question about what is -- can you be INT responsive and not be high in TMB. We've been actually pretty successful in getting good neoantigens in that trial. Whether we're going to be -- whether that's going to translate to efficacy, one doesn't know. And that's why we did it as Phase II trials as opposed to Phase III, which then speaks to your second question, which is as the MAH as the party of record in front of the agencies, Phase II trials are Phase II trials. And we don't want to get ahead of the regulatory authorities and presume anything. The data such as they are, will be -- I think will be -- I hope will be compelling, and then we'll see.

Daina?

You have to get your melanoma patients on enlicitide? So you [indiscernible]. Daina Graybosch from Leerink Partners. One quick technical question and then a less technical one. So the nonproportional hazards, you saw that also in KEYNOTE-942, the Phase II. And I wonder if you've talked to regulators about using statistical models as your primary analysis that reflect that. So something that's not a proportional hazard model.

And then the last technical question on TroFuse-005, very interesting in the subgroup that you saw an association of TROP2 expression with the TROP2 medium and high seeming to derive more benefit. I wonder if you could talk to that and if you have any plan for using that biomarker in your gynecological development of the ADC.

So maybe starting first with the question about INT and the nonproportional hazard. So I do think, again, the FDA is very familiar with these kinds of curves. And so we have not talked about our discussions with the FDA. I don't want to get ahead of what may end up in a potential label or how that this would show up in there. But we wanted to really help to start to educate the broader community in oncology about this. Thinking back as an oncologist, I know in theory how vaccines work, and this is a therapeutic. And so you're combining these 2 kinds of pieces together, and it's helping to introduce this to people. So as we generate more data and we saw the great durability in KEYNOTE-942 of that very durable sustained response over 5 years, we're imagining what's going to happen at 7 years and longer and the same thing with 001. So I think it's stay tuned would be my answer, Daina, on that as we talk to health authorities, but this is something the FDA and other health authorities, I think, are going to be familiar with.

In terms of the biomarker subgroup in TroFuse-005, and the discussions today got privy to some of the data that was there. And endometrial cancer is a tumor type that has very high expression of TROP2. Responses were seen across all expression level of TROP2, even people who had minimal or no detection. And that's because you do get inherent bystander effect with TROP2 -- this TROP2 ADC. And so you do get activity there.

And the way that the histology worked out is that carcinosarcoma tumors tend to have lower TROP2 expression than those tumors that are not carcinosarcoma and those tumors are biologically quite aggressive. The response rate was higher in carcinosarcoma with sac-TMT than it was with the control arm, but that does impact those results between the higher TROP2 expression and the lower TROP2 expression on those hazard ratios. In both groups, though, clinically meaningful results were seen compared to control across all levels of TROP2. And so I think this is a drug that has benefit across all the subgroups that were studied in the trial.

Great. Chris?

Chris Schott, JPMorgan. Just on sac-TMT, just a question on the drug maybe broadly in first-line lung, given the ASCO data and now the ESMO data. Maybe specifically how you're thinking about the PD-L1 kind of lows, the 1 through 49s. Should we think about Merck developing kind of broadly? Or would you want to explore that, I guess middle group to see what the proper kind of approach would be in that setting? And maybe just a quick second one, which is the translation of some of the China data we've seen on sac-TMT to global studies that we obviously saw the first one of these today. But just talk a little bit about on endometrial, how that played out versus what you had seen from China? And just does that -- what confidence that gives you for the broader global studies?

Thank you. When you look at the registration studies that are ongoing right now with sac-TMT, remember, we started these studies about 3-ish-plus years ago. And we had initial data -- another Phase III data that we're seeing from Kelun was available at the time. We had a lot of Phase II data that we were cogenerating together and some initial data from Kelun. And so we went into some settings where we really thought as a maintenance approach that we would be able to have tremendous benefit, and that includes those people who have higher PD-L1 expression in their tumors as well as those who don't necessarily. And so we do have maintenance approaches for across all of the ranges in KEYNOTE-189.

I think the question you're getting to is if we were going to do a replacement strategy, would we focus on a higher tumor PD-L1 tumor population or an all-comer. And I don't want to talk about potential future Phase IIIs too much until they hit clinicaltrials.gov, but there's unmet need across all expression levels. There's a question about where would you get your biggest bang for your buck with the therapy. And I think that when you look at all of the data sets that Kelun have generated, there has been consistent compelling efficacy in every subgroup that has been evaluated by sac-TMT. And so it's really exciting.

And that goes into your question of, well, how much can you trust the data and how it translates into global studies. There was data presented at ICGS this year of the TroFuse -- it wasn't TroFuse, it was 2870-001 was the name of the study. It was a very, very large Phase II study that we were working with Kelun together to help explore all of these tumors that have been formed for our 18 Phase III studies. And the data from the endometrial cohorts was presented, and it looked at 4 milligrams per kilogram and 5 milligrams per kilogram because we wanted to understand fully where was the best benefit risk for something that we thought had the potential to go broadly and understand the efficacy.

And the data presented there, it was a slightly different patient population than in the Phase III study, but you see very generally consistent response rates and duration of response and antibody drug conjugates tend to be quite consistent in similar-ish populations of response rate and duration of response. And those are the things that translate into meaningful long-term outcomes.

Same thing is true about the safety. And so when you look across different studies, so example, the breast study that was updated, the Phase III, you look at the stomatitis rate that in that study is very similar in that trial to what we see in TroFuse-005, whereas in the Phase II, the stomatitis rate was a little bit lower. So we're seeing consistent data in the disease studied in the Phase II China study that has translated into global Phase III endometrial study. The thing about global studies is that you do have heterogeneity of populations. You have heterogeneity of AE management. You have subsequent therapies that are different across the globe. And so each trial will be its own experiment. But I think that consistency and seeing that positive data and what really makes me excited is that durability of being able to deliver for a long time makes me very optimistic about the program broadly.

Great. Carter?

Carter Gould with Cantor. Maybe first, a clarifying question, and this may be -- I just want to make sure I'm capturing this correctly. It looked like your HR-positive breast strategy may have been updated. I believe the TroFuse-010 was supposed to be a frontline and second-line study and slides are at least showing that only is frontline now. I just want to make sure that's correct.

It's frontline. It is a frontline study, yes. I think that if you -- it's a frontline study.

Still same size and still data next year?

We have not -- yes, I'd say go to ct.gov for the clarity.

All right. Perhaps more importantly, there was a lot of conversation with the discussant, whatever day that was, the day or 2 ago regarding -- on the INT regarding neoadjuvant use of PD-1s. And I want to give you a chance to comment. I know I've talked to Eliav and Dean about that before, but it was a couple of years ago. And just now how you think about NADINA and SWOG potentially being a complicating factor commercially.

Yes. The neoadjuvant studies were initially designed these tumors that -- the patients with the tumors, they tended to have macroscopic sort of bigger melanomas that had lymph node involvement, both SWOG 1801 and the NADINA study did have these larger tumors. And so they -- the SWOG study also included potentially resectable Stage IV disease. And so they are a selected subgroup of melanoma. And part of what -- it's very hard with these Mohs microsurgery and the lymph node surgeries sometimes to get good negative margins. And so one of the questions was, could you do this and make the surgery easier and then be able to have your benefit? And then they were looking at efficacy as well.

The studies, you're looking -- it's a little apples and oranges between these trials a bit. And so I say that when you're looking at the NADINA study, these were well-conducted studies, both of them. In the experimental arm where people received 2 cycles of ipi/nivo, there was 6% to 7% of people didn't make it to surgery. And then in the adjuvant setting, you had about 10% of people received monotherapy nivo. You had people receiving BRAF-directed therapy, and you had a lot of heterogeneity in your post-adjuvant treatment. And it makes it really hard for us to look at that trial and compare what does that mean versus what does INTerpath-001 mean. People really anchor on the 83% data, and that was data with a median follow-up of about 9-point-something months compared to the 2-year data that has also been published on the NADINA study that showed that, that benefit, the original hazard ratio in the 0.3-something range had dropped into the 0.4-something range and then maybe it's stabilizing. It's hard to tell, but there was some efficacy.

So I think it's an important study, and it's something that's really helped to show that for people who do have these bulky kind of diseases that you're able to do this approach, but there is risk of progression. We saw in the SWOG 1801 study, about 10% of people didn't make it to surgery because of progression in that period as well. That study had more consistent adjuvant therapy. And we do see a drop in efficacy over time in the adjuvant setting when you look at the first 2-year event-free survival and then going into later data sets.

So I can't compare them, not because I don't want to, but they are very apples and oranges in their approach. What I can do is look at the KEYNOTE-942 study, which did have a higher-risk population that we see in the INTerpath-001 study. And I see very consistent 2-year data. And then 942, it's staying stable over time. And so we'll need time to see what this happens over time here. Are we going to see those continued durable benefit? The number of people who have neoadjuvant therapy, we think it's about 20% of the population who are really candidates for the neoadjuvant approach, and there's a lot of heterogeneity about where it's used.

And so we also need to remember that for the NADINA study, about 30% of people get very significant grade 3 or higher toxicities. And there were people who were unable to either undergo surgery or receive any adjuvant therapy when they needed it because of potentially residual disease due to significant toxicity. Whereas when we look at the toxicity with INTerpath-001, there are no increase in immune-related AEs and the therapy was generally deliverable and well tolerated.

Alex?

Alex Hammond, Wolfe Research. So the discussion for the OptiTROP trials mentioned dose attenuation and pulsing dosing will be part of ADCs in non-small cell lung cancer. So I guess I'm wondering if and how you guys are planning to implement those strategies into your development with sac-TMT.

I'm sorry, could you rephrase the question for me?

I couldn't hear.

I have a hard time hearing you.

If you're going to utilize dose pulsing with sac-TMT in small cell lung cancer.

Dose pulsing in non-small cell lung cancer. I'm not certain what they mean. I missed that presentation. I hate to tell my partners, Kelun, that I missed that presentation. So I'm going to need to listen to the discussion to understand what they intended by that. There is dose modification that occurs because this is a cytotoxic therapy. And depending upon the AE profile, sometimes you can hold a dose or you can modify the dosing if needed. There isn't a current prospective plan to look at some kind of induction and maintenance. We think that we have with our 4 milligram per kilogram dose that we are using in our global studies, either as monotherapy in combination, the optimal kind of dosing for benefit and risk. And that's spoken to by the duration of response.

If you look at the endometrial study, the OptiTROP -- excuse me, the TroFuse-005 study, there -- the number -- the duration of therapy, there is over 30 weeks for the experimental arm compared to 15 weeks for the control arm. And despite that doubling of therapy exposure, the number of people who had to discontinue drug due to toxicity was numerically higher in the control arm. So I think that this -- having to modify doses is not an expected with a cytotoxic therapy. I think that it's more important to think about can people stay on treatment in a very tolerable way and that duration of response shows it and the quality of life being maintained is another thing that really is very reassuring.

You never want treatment to be worse than the disease and people who've got recurrent cancer, they're not going to take therapy that's making them miserable. And so even though they do have this very high unmet need. And so I've been very reassured and you're seeing that consistency across multiple studies in the Kelun studies as well as now in the global trial as well. So I may not specifically answer your question, but that's how I think about the dosing of sac-TMT in our global trials.

Courtney?

Courtney Breen from Bernstein. Two questions. The first one is hopefully a quick answer. The sac-TMT PDUFA date that you mentioned is June 15. Can you just clarify if you're using the CNPV for that date? Or could the CNPV pull that further forward? It doesn't seem kind of fast enough based on the kind of previously historical, I guess, proposed time lines that might be possible with CNPV?

And then the other question that I had was just about the combination potential Phase IIIs that could start in the first half of next year. You've obviously got Phase IIs ongoing. They appeared on clinicaltrials.gov last month, I think it was, but perhaps popped up a little bit earlier as well. Can you just tell us about the burden of data that you will have to inform that decision? Or are you relying on data from Kelun, combinations with other PD-1 VEGFs in sac-TMT, internal modeling? Kind of how are you getting conviction about kind of the dosing and the combination selections you're making?

Sure. So I think as stated about -- I'll address the second part first, is that we've had very productive conversations with the FDA. And so we -- which is why we're just telling you that we're starting our Phase IIIs next year. And so really excited about that. Phase II studies are done for multiple reasons. Some of them can be signal finding, but they also can be used to get greater understanding of combinations and inform for ongoing Phase III trials. And we have multiple combinations that we're looking at with 2010, not necessarily just with sac-TMT in these studies. And so I don't want to say anything more specific than that because of the hypercompetitive landscape that we're in, but there are a lot of reasons for us to have Phase II studies ongoing while concurrently thinking about a Phase III development program with our Phase III-ready asset, MK-2010. So lots of excitement there.

Kelun does have its own bispecific that it's working with. We have data that they've done with Avastin combined with a checkpoint inhibitor and sac-TMT. So we do have data sets that already have helped to inform for information that we're using for our global studies. And so lots of stuff that's ongoing to inform for potential future for that combination. We've had really productive conversations with the FDA. I never want to get ahead of them. When you submit something, whether you're using the NPV or not, you get the PDUFA date. I think that we are all very excited about the potential to accelerate. Anything else you'd like to add on that?

Yes. I mean I would say that our discussions with FDA to date have been incredibly productive and speedy. And we've had good experience with their very robust, very in-depth, but more accelerated reviews. So we're hopeful that we can bring this drug for patients as quickly as possible. I also want to point out for 2010 that it's not just sac-TMT in 2010. 2010 will be -- we'll have friends with benefits in different -- with different parts of our pipeline. So we look forward to being able to show -- to get started with that in next year as well.

And that's part of why we have several studies is because they're different INDs.

Dina?

This is Dina from UBS on for Mike Yee. I guess on the -- to Daina's point on the biomarker strategy, in the Opti-Lung06, we actually saw, while it's very stunning and great data, we did see that there was a better benefit in the TROP2 low patients, which is kind of opposite of what we saw in the endometrial. So there is a bit of a difference in the TROP2 expression and the benefit that we see across cancer types. I guess maybe just thinking about what is your strategy for the biomarker testing. I saw on one of your slides that in lung that you're not focused so much on the biomarker strategy, but you are in other indications. So I just want to talk through how you're thinking about that.

Maybe to clarify, we have a broad biomarker plan across all of our sac-TMT studies. Every tumor is going to be different about expression and response. And during the presentation today with the TroFuse-005, it referenced the testing that's being done with RTD, IHC testing. And we have very similar kinds of approaches in our studies. And we have not talked about where we might have a primary hypothesis about a biomarker enrichment or not in particular studies. And part of it has to do with how antibody drug conjugates, particularly this one that does have very robust bystander effect as well and in different tumor types may need to have more consideration than others. And so it's there. It's also meant to be scalable for global usage. And so that's where we -- it's there, and we're thoughtful about it, but that's all I can really tell you at this time.

All right. So it's been a long 4 days. We're just over the hour mark, so maybe time for 2 more questions. Will?

[indiscernible] here for Mohit Bansal, Wells Fargo. I know you alluded to going against KEYNOTE-189 with a potential sac-TMT and MK-2010 combo. I guess like based on the data we've seen from the PD-1 VEGF class and then also the old like PD-1 plus VEGF combo trials, do you see like a specific histology that such a combo would make more sense? And also, I guess, like in squam, like what's the -- do you see a rationale for MK-2010 plus sac-TMT as well?

No. It was a very leading question saying that we're going to go against 189 broadly. So we're doing a study in first line, and that's -- just stay tuned to next year. So I can't speak more specifically.

I think we're very confident. I have to say that the Kelun data...

Works across all histologies.

I mean, seriously, they're just really -- it's pretty important for us. I mean Kelun is a wonderful -- gives us a harbinger of what to look for and what to do and not do. What's been super cool about the OptiTROP-Lung program is that like it's active here, it's active there, it's active everywhere. So I think that it provides Marjorie and her team with a lot of optionality to do smart trial design. I'm grading them, and we'll see what happens next year.

All right. Last question, Richard?

Richard Wagner, Bank of America for Jason Gerberry. I wanted to return to the neoadjuvant question setting for intismeran. What is the state of the technology now with regard to the ability to turn around doses quickly? In order to understand what is the practical -- what are the practical considerations with intercepting a patient undergoing neoadjuvant treatment. I know that you are putting forward some fairly ambitious studies where you intercept patients after 3 cycles of preoperative chemotherapy in bladder cancer. Would that technology state now, does that open a neoadjuvant melanoma study? Would you do it if you can?

And then indirectly, but still within the neoadjuvant versus adjuvant paradigm, the result failure to show overall survival with KEYTRUDA in the adjuvant lung cancer setting, the PEARL study, KEYNOTE-091, what does that mean for the intismeran study with KEYTRUDA in the adjuvant setting? Is adjuvant KEYTRUDA essentially a practice that will go away by the time the results are available?

There are lots of different questions in those 2 points. And so maybe let me start with talking about survival in lung cancer. And I think the presentation that was done this afternoon about the updated data from KEYNOTE-091. They talked about the lung cancer-specific survival in the same way that we were talking about the distant metastasis-free survival and that when you have an elevation that you have competing causes of death. And they highlighted some of the death imbalances that occurred in KEYNOTE-091. And so we do think that our goal always with therapy in the curative intent setting is to reduce the risk of death from cancer being what takes someone away prematurely compared to what would normally happen to them if all things are created equal. And so I wish that these therapies would cure heart disease and cure strokes and other things that happen, but they're not able to do that. And so it's really important to think about the totality of burden of cancer and recurrence and outcomes when thinking about benefits of therapy, and that's how I generally view that.

Our Phase III studies can't answer every clinical question that's out there. Just the registration studies, the way that we do them is I can't answer them all at one time. And so this is an open question about could you do -- would there be something for someone who has residual disease after neoadjuvant approach. It's not used as much in the community setting. It tends to be done much more in the academic setting and because of the need you have to really carefully map the tumor and the lymph nodes. And I think that there are some questions that we just don't have answers to today. And again, the majority of people do not receive neoadjuvant therapy for melanoma at this time.

The turnaround time for generation of INT, it's a complex but well-oiled machine, and Moderna has been amazing partners to work with on the manufacturing and getting things up to scale. And we've had to do this in multiple global studies to get this going in a very consistent way. So we're ready for commercialization. And there's a huge orchestration process that has been done that is complex but is very scalable to get this out there. And right now, we're saying the turnaround time is around 6 weeks. So if you have a neoadjuvant regimen that is a 6-week regimen, right now, those 2 things are not necessarily compatible. So there are things you could consider for a study concept that could introduce a neoadjuvant approach.

But I think that the data is quite consistent in INTerpath-001 across multiple stages, across multiple subgroups. And again, if I go back to the SWOG study and 10% of people had progression before they got to surgery in the neoadjuvant setting. I think that the data you have is quite compelling in INTerpath-001.

I don't see neoadjuvant becoming the rage. It's not -- that's not what we're hearing from our melanoma experts. It's a very specific set of patients where they really want to be able to debulk the tumor before they do the surgery. So I think that 1801 regimen has good -- is relevant for specific narrow group of patients. And I think adjuvant is going to be the way to go for most of the patients.

Okay. Thank you all again for your time and attention and the really good questions, and safe travels home.

All right. We're going to get started here. Thanks so much for joining us. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm very pleased to be hosting Merck this afternoon. Joining us from the company, we have Rob Davis, the company's Chairman and CEO; and Dean Li, who's Executive Vice President and President of Merck Research Labs. Thank you both so much for taking time on your day to join us. Really appreciate it.

Great. Well, thank you for having us. Appreciate it.

I thought first, I'd turn it over to you, Rob, just to frame the discussion for us, and then we'll launch into Q&A.

Yes. No, I appreciate it, and happy to do it, and good afternoon, everyone. I mean, obviously, already, 2026 has been a very eventful year for us. I would say, and I think it will frame the discussion we'll get into. Our transformation is underway whether it's the product launches we have going, which are all the first waves that are coming all going well. But equally, if not more importantly, the fact that we're getting and seeing continued important data readouts that have all pretty much turned over positive and many at a pace much faster than we expected just gives us a lot of confidence in where we are. We have more to come.

Importantly, while those catalysts have been important, we have more catalysts yet to see this year, both in terms of other data readouts as well as potential filings. So as you look in the near term, a lot of continued excitement and what is ahead of us. And then on top of that business development, what we've done recently with the Terns deal, we'll get into, I'm sure, at some point.

Animal Health. Our Animal Health business is performing at best in industry levels. We continue to have strong confidence in that business that can more than double in the next 10 years on the back of a product portfolio growth, very much in line with what you're seeing on our human health business. And we have the capital -- the resources and the capability to add more. So whether you look at it as launches, as clinical readouts, as business development, I think we're really hitting on all cylinders. So I feel very good about where we are.

More to do. You never say you're done, but I feel very good about where we're standing at the moment. So maybe with that, I'll turn it over if you want to jump in on any of those areas.

Yes, absolutely. I think we'll get through a lot of that. The first I want to start on is just on the policy front. Obviously, you guys are very plugged into D.C., you have the midterms coming up here. But just anything that's on your radar here that we need to be cognizant of?

Yes. Obviously, it's going to be interesting to see how this plays out and what happens in both the House. And interestingly now, the Senate probably is going to be more interesting to watch and even the House. But whether it's Democratic or Republican, however you want to look at it, as an industry group and as Merck, where we're focused, is continuing on what we see as the 2 biggest challenges we continue to have. How do we make drugs more affordable for patients at the pharmacy counter and how do we ensure access to all of these new meds in a world where we have an ecosystem that continues to reward for the innovation we're bringing. And if you look at those assets -- those aspects of affordability and access. Clearly, we continue to believe the challenge is the fact that the innovator, the manufacturer still only gets $0.50 of every dollar. We have to address what happens with all of the $0.50 in the middle. That really is about PBM reform. That's about 340B reform. And I'm happy to say that there's growing momentum. You've seen a lot of movement with legislation in the PBM front.

We continue to think there's more to do there. But importantly, you're seeing movement on the 340B front as well. So we're going to continue in the industry and as Merck to push that. But really with an added emphasis on this notion of access, the fact that you're seeing insurers and PBMs use utilization management to either delay or deny access to new medicines, whether it's through formularies, how they do formulary management through step editing or through prior authorizations.

We think that, that is another element of this broader system that needs to be addressed, and we've spent a lot of time with the members of Congress and the administration trying to bring greater focus on that.

Okay. Great. Maybe the other one on the policy side is just 340B. It's been, I think, front and center for a lot of folks here after second quarter results. So as you think about that going into 2027, how are you thinking about the impact to your business?

Yes. So if you look at 340B, we're very supportive. I think it's important a couple of points. One, as Merck, we very much support the initial and original intentions of what 340B was about, which is how do you support the most vulnerable members of society to ensure they have access to good health care and good hospitals and clinics. The program has been perverted away from that and has grown and morphed in directions that were not in the initial intent, and we need to get back to that original intention. And so as we think about '27, you are seeing momentum, as I mentioned. There is some bipartisan legislation now moving both in the House and the Senate. There's actually, I think, a bill in the House called the Access Act, but maybe also not only from what the legislation's happening from a congressional perspective, you're seeing the administration themselves starting to make movements.

I'd just highlight the fact that we have HRSA running a demonstration project with the Rebate model, which we think is very important. So we're very supportive of all those moves.

As we look at our own business, those will create potential tailwinds if they evolve, but they're not material to us, frankly. It's more of how do we set the right policy environment to get out some of these more fundamental issues that we have in our system.

Okay. Great. The other one you mentioned in your remarks, Rob, is that you guys have had a lot of success on some of the BD deals translating through to positive pipeline wins here. And so I think now you can say like, all right, a lot of these have been ROI positive for the company. And so maybe just what worked? Like what was it that you guys changed when you came into CEO that you think has given you the ability to generate ROI on some of these BD deals. So I think there's this historical perception, again, probably rightly so, where a lot of the legacy deals that maybe you, your peers have done, were being more challenged on the ROI side. So what was it about some of the changes that you guys made on the BD side?

Well, I give all credit to Dean, frankly. My superpower was just listening to Dean. So that -- I think my mom raised me well in that regard. But in seriousness, what we have done is really a lot of people talk about it. I think we've actually tried to both live it and institutionalize it in the way we operate, is treat the pipeline as 1 pipeline, whether it's internal or external, and make sure that we always are trying to look for the best science. We always start with the science. I've never gone to Dean and to our business development folks and said, "Get me an asset in a space." I think that's dangerous because they'll give you the best asset, but that might not be the best asset that's out there. You don't limit them in that way. You can't limit the science, the science has to dictate.

So we always start with the science. But then once we do that, we're willing to look at whether it's an internal asset or an external asset, we evaluate them always the same. We use the same financial measures. We use the same operational rigor. The teams that do the due diligence are our scientists. So it's not like a separate group. When we go into due diligence, it's our scientists on the ground with them.

We leverage our statisticians to be able to make sure that we're understanding the probabilized risks and returns. So it's that model we followed and one of the things we did to organizationally align that is when I became CEO, we moved business development underneath. So all corporate development now sits underneath Dean. And I think that has also allowed for that ecosystem to thrive.

The other thing we do is we have with each of our discovery centers, BD is embedded. So all of our search is done in side-by-side with our scientists. So I think it's that culture, combined with now institutionalizing processes around it that has allowed us to do well. And as I said, it's credit to our scientists. They've made scientific bets based on their expertise. And I think the fact that we have depth of expertise has allowed them to make the right bets.

Okay. Great. Maybe the first one of those I want to talk about is obviously the INT program, which is partnered with Moderna, some recent data there on the Phase III side. So congratulations. Very exciting. I guess, Dean, maybe just help us think about framing what we're hoping to see. I know you can't say ESMO, but again, a conference this fall. And what it would mean for other tumor types because I think that's the question we're all trying to get our head around is not necessarily if the melanoma data is good, not good. We know it's good because it hit at an interim, but what does it mean for other tumor types that you and Moderna are exploring. So can this be a platform, I guess, is the question.

So the first thing is, I think one of the most important pieces of data actually didn't come out in August. They came out in -- during ASCO where we together presented the 5 years from the Phase II. The big concern that I had about this -- I mean the Phase II that was run was robust. But as many people know, there's been a concern that RNA-based, sort of, trying to use that to immunize can be short-lived. And what was really interesting in that data is that we demonstrated that the people who responded who were cancer-free at 1 year remain largely so at 3 years, were largely so at 5 years.

So when people see that data when it comes out at the conference, I think people will immediately see the Phase III and extrapolate to 5, 7, 9 years, and that's a really important point.

The second issue is in that data, there's a small sample size, there's always some imbalance, but what you're hoping in your Phase III is to be in the ballpark of that. And if you are in that ballpark of that, I think it will increase your likelihood of being successful in adjacencies. And what do I mean by adjacencies. We have a relatively conservative plan right now in relationship to INT. We prioritize those tumors that have a high TMB and/or where IO or checkpoint inhibitors have worked and/or where KEYTRUDA itself has laid out in early stage.

So I think the louder the signal comes in for melanoma, I think it will somewhat derisk that relatively conservative plan. What we have not done is we haven't gone in metastatic. We haven't gone in tumors that are not IO sensitive or where a PD-1 works or it doesn't work. And the reason we haven't done it isn't that we think it's a silly idea. We're very glad that other people are doing it. But if that should hit, we will change and expand our program dramatically if that should happen.

The issue for me is to hit and hit fast because this is unlike a T cell engager, unlike a small molecule, unlike an antibody. I think the first-mover advantage here in being able to commercialize in melanoma will teach you -- give you all the repetition that you need, and that in itself will create a lot of information for both Moderna and Merck and give us an advantage. So that's why "we" have a relatively conservative plan scientifically, but the concept is to move fast and to move -- can move fast.

Yes. And so as you think about maybe the next couple of readouts you've got, muscle invasive bladder cancer and RCC, how to think about likelihood of success in those tumor types, where those fall in the spectrum of...

Yes. So they fall in around that conservative plan. You would say that for MIBC or for bladder cancer, the tumor mutation load is higher. But you also have to look at RCC, where RCC, the tumor mutation burden is not that different than MSS CRC. But in RCC, how many immuno-oncology agents work? I mean how many checkpoint inhibitor cytokines work? So I think both of them are good examples but they will give us a general sense of bookends in relationship to our conservative plan, and we will act accordingly as we see that. And we will open other trials depending on what the, sort of -- if MIBC hits it or something like this, we'll start thinking IO, higher tumor mutations; if it's RCC, it's I/O-sensitive, checkpoint sensitive, but a lower TMB.

Okay. Maybe, Rob, one for you. I know you guys had guided to over $70 billion in recent launches pipeline by mid-2030s, and you had a number of different buckets in here, oncology was one of those, looks like over $25 billion. I think from what I remember, INT was fairly minimal in that. And so number one, I guess, am I remembering that correctly? And number two, is it fair to assume that there could be upside now as a result of this new data that we got on a top line basis?

Well, maybe speaking broadly to the $70 billion, and we unpack the comments. But I think, yes, you should assume we see upside to the $70 billion, and I'll give some reasons why. It is specific to how did INT fit. So if you recall, we had $70 billion made up from 20 assets. 10 of those assets, we said, would make up 70% of the $70 billion, and those are the ones that we thought would have readouts really in the next couple of years. We initially expected INT just based on primary completion date, which is what we use as our -- the way we guide was beyond that. It was in 2029. So obviously, pulling it forward to the interim. It was not in the initial 10. It was in the 20. So it is in there.

But if you look at more broadly, what do we see as far as this opportunity. The other thing is not in that $70 billion. The Terns acquisition, the asset -- the TKI, we brought in with that, which we see itself as a multibillion-dollar opportunity. That was not in the $70 billion. Importantly, and this will come up, I'm sure in a moment, MK-2010, which is our PD-1 VEGF, was not in the $70 billion.

And as you know, we are starting multiple studies with MK-2010. So those 2 assets alone are new, they're upsides. And then on top of that, I would say, while we did have INT in there, just given now the fact that we -- if you assume technical regulatory success because that's what we always assume. But then you look at what is the commercial opportunity. I do think it's safe to say that the broad commercial opportunity probably could be bigger now given what we've learned and what we'll continue to see as the data flows out. So all of those things are why we have a lot of confidence that you're going to see us raise that number. We just have to decide when is the right time to do that.

Okay. Is that a this-year event or a next-year event?

Raising the number. To be determined in the near term, I mean, it's coming. Last year, we laid it out at the beginning of the year. We'll think about whether or not probably that would be the timing we think about it.

Okay. Fair enough. Just in the interest of time, I want to keep going here a lot going on. But sac-TMT, another more recent derisking pipeline asset for you guys.

Also it came much earlier than expected.

Okay. Another driver of upside to the $70 billion? What -- but I guess the question is just the one thing that I think we've been getting some questions on is differentiation still versus the competitive landscape. And so I know you guys have a strong view on this. We're going to get some data from AstraZeneca for data from their AVANZAR study, which we haven't seen yet. There were some data for Trodelvy or another TROP2 over the weekend at World Lung. So maybe just level set us on kind of where you see differentiation versus those other TROP-2s given some data over the weekend, but also in the event of the AVANZAR data and what that means for sac-TMT?

Yes. Maybe I'll make some high-level comments, and then Dean can get into the specifics. If you just recall, we have 17 Phase IIIs we're running, 13 of those are in tumor types where we think we'll be first in class. So -- and most of those, they're outside of lung and they're outside of breast. But they are meaningful tumor types. So it's important that and alone, the fact that we can be first-in-class is fairly important. As you look at the more competitive spaces, especially around lung cancer, Dean can get into why we think we have a unique asset. But the one thing I would add to that, that I think is not appreciated is going forward, the number of potential additional combination studies we could think to with sac-TMT, whether it's in combination with MK-2010, which is, as you've seen, is now on clinicaltrials.gov.

Other assets we have is unique because we have such a broad portfolio, we have a lot of different combination assets we can bring. A lot of those studies aren't reflected yet in their studies. We're still -- some are spooling now and more we're continuing to look at. So that in and of itself is something that's underappreciated. And then I think your specific question is, well, what about what differentiates us in the more competitive spaces, and I'll let Dean take that.

Yes. So as Rob said, the linchpin of the whole thing is that we felt the molecule when we looked at the molecule, was different than the previous two. And because it was differentiated, we decided to do 2 things. One is to race the indications where the other 2 weren't trying. We were actually surprised that they didn't move it forward. And you see with the endometrial data, there is a chance that we can be first in lots of these indications that are outside lung and breast and we intend to do that. The other thing that's important about that data is that we had gotten signals in China and when we got signals in China, there's always this question of would you get that signal in a global study. And the endometrial study derisks that to us to some degree.

In relationship to lung and breast, we've already had one that's not going to make it into first line -- one of the competitors. We'll have to see where the second one ends up, but we feel very good based on the Chinese data that this is an important ADC. We intend -- initially, we were very thoughtful of trying to be differentiated. But with the data that we've done with Kelun and with other data, we're extremely confident across PD-L1 that we could play with sac-TMT. The question is when do you play with it with KEYTRUDA and when do you play with it with 2010?

Yes. And when will you guys make that decision? Like what the pieces are you waiting for to make that decision?

Well, those studies are already ongoing. They're on clinicaltrials.gov. And I think moving them from Phase II to Phase III potentially as the data evolves, will happen in the next year, 1.5 years. But they're already actively going in Phase II.

Okay. One other kind of related one from AVANZAR is the biomarker population. And so their data, there's an opportunity for them to show ITT or just a biomarker positive or outright failure. So as you think about that spectrum of outcomes, what does that mean for your sac-TMT program in the event that, let's say, the biomarker population only is positive?

If the situation where their biomarker is only positive, we would look very deeply as to whether or not what our results in a non-biomarker selected would look like. I think the -- that is something that we would gauge, but we'll see as the data advances. And I also think that the other sort of thing is -- we always have biomarkers available for our ADCs, whether we actually use them in the clinical sort of labeling sort of thing is one that's built on what the data suggests.

Okay. Maybe just, again, moving on to another important more recent approval and product for you is enlicitide, and I know there's been a lot of focus on kind of the early launch and access. We've got, I don't know, 5 weeks of prescription data, so I won't ask you to comment on that. But again, just talk to us about maybe the importance of the label and some of the language in there on cardiovascular outcomes. And then what that means for guidelines and then how you guys are thinking about the access equation here, rest of this year into '27?

Yes. And maybe I'll just start with the, kind of, broadly where do we see access and then I'll let Dean speak specifically to the kind of the label and what some of that stuff means. But if you look at the strategy, we've always said we were going to bring. It was we wanted to have an asset that we could price at a competitive price, a low price such that we could democratize care and drive the volume to all the patients that need this.

If you look today in the United States, 30 million people in the United States are on lipid lowering therapies today, not at goal. 30 million people. #1 killer in the United States is cardiovascular disease and impacts from arteriosclerosis is a leading cause. So you have a silent killer that is affecting huge populations of our citizens that have an option to lower their LDL a further up to 60% on this medicine who aren't on it today.

So a lot of the conversation is, well -- and we get this all the time, how are you going to do? Do you think you're going to take share from the existing injectable PCSK9s? Let's be clear, that is not the goal. My goal is not to have 5% of people on PCSK9, which is roughly where it is today. It's to say, how do we get to 50% or more of the population who would be eligible on PCSK9s. Everyone who is on a lipid-lowering agent not at goal should be on -- with an add-on therapy. And we think we are best positioned with the oral LIPFENDRA, which is the brand name that we have.

So knowing that we wanted to make sure we price this in a way that would maximize access. And we've done that. I will tell you what we're hearing from the payer community. They recognize and appreciate the differentiated characteristics of LIPFENDRA, we're actually hearing that. And we have not seen anything other than the ordinary restrictions that you'd see with the new drug.

So I think we've been successful in getting broad access, and we're on a path. As you look forward, we think we'll have full commercial coverage to the majority of lives by the time we get to the end of '27. We expect to have Medicare coverage by 2028. Chance to pull that forward. We're working hard to do that.

So as it sits here today, I feel very good from an access perspective. I think the profile of the drug and to your point, the label is extremely positive and we are very bullish about this, but maybe you can comment on the questions around the CVOT and what the...

Yes. So the bottom line is we have a CVOT proceeding, but I do think the FDA understood that this molecule was designed to do what the antibodies did in relationship to biomarkers. And if you look at the biomarkers of ours, and you look at the antibodies, they, kind of, look like they're all in the ballpark.

I think the second thing that the FDA understood is, although we talk about PCSK9 generally, if you look at, for example, the PCSK9 siRNAs or other sort of things, they're not in the 60% range, although they're in the 50% range. So I thought it was interesting what the FDA did. They reminded people that we don't have an outcomes trial, but they recognize that this drug should be done in addition with a statin. So they say statins have cardiovascular outcomes in our label. And they also reminded everyone that although we don't have cardiovascular outcomes, we were designed to be like an antibody, and they remind everyone that the antibodies have cardiovascular outcomes. So we view that as all positive movement.

And what does that mean for guidelines? Before you have your own CVOT data, is there a chance that you get kind of parity with the antibodies from a guideline perspective? Or do you have to wait for your own CVOT data? Just trying to think through any implications for guidelines.

So if you're talking about AHA/ACC guidelines, I think always, there's going to be some, sort of, question as to -- until you have the cardiovascular outcomes and how do you think through it. But I think the larger question for AHA and ACC is 2 things. The first one is they finally have LDL. The second thing is for those patients who have secondary ASCVD, I think many people believe that their guidelines of less than 70 is not sufficient, it should be less than 55 and 40. I think that's the major issue.

And then the third issue that comes from guidelines is that CMS has never had a quality metric in relationship to LDL, which is shocking. And the question is whether the CMS will begin to do it. That to me is where all of our competitors and us should be pushing for.

And how should we think about the out-of-pocket channel here? I mean, is that a real opportunity? Or is it a function of, look, I mean, most people have commercial Medicare coverage with cardiovascular disease. So it's likely going to be fairly small as we've seen with, kind of, the antibodies? Or is there more of an opportunity for the out-of-pocket channel? And then maybe even step back more broadly, like how are you guys as a company thinking about leveraging an out-of-pocket channel or footprint, given some of the success we've seen for some other companies.

Yes. So I do think the growing acceptance of direct to patient is something to take note of. And I do think you're going to see more of it and it's something that we are looking at doing aggressively not only in the cardiovascular space, but more broadly, it is very asset specific. So not all drugs are -- will meet that space in the right way. KEYTRUDA would never be in that, for example, but there are a lot of opportunities.

And I do think it's an important way to continue to get directly to the patient at prices that often can be cutting out what's in the middle. So we are looking to do that with LIPFENDRA. We are -- we have already announced intentions and we had it as part of our MFN agreement to put this on TrumpRx.gov. We're looking to do that as we move to the back half of this year.

It's -- to that extent, it's immaterial as you think about 2026, and probably, it's going to take some while to ramp, but it is a channel that we are going to take advantage of. And as I said, not only here, but as we bring new assets, it will be something we'll look at each asset and ask because it's something that should also sit in that channel.

Okay. And any -- last one, any early feedback from kind of your sales reps out there in the field? I know you mentioned some of the payer feedback, but anything on the patient side you're hearing from your reps?

The short answer, it's all positive. The amount of press this has received, it frankly exceeded my expectations, the understanding of what we have is probably broader than we thought. So I would say early days, but everything is quite positive.

Okay. Great. Maybe moving on to Tulisokibart, your TL1A antibody for IBD. Maybe just again, any update on when we might see that first set of full Phase III data? Is this something that we could see at the UEGW conference? And then maybe just help us think through that second Phase III trial that you guys have ongoing in terms of timelines for data and anything to call in terms of similarities or differences versus that first data set?

Yes. If I could reframe the question a little bit, which is our interest in Tulisokibart is not IBD. Our interest in Tulisokibart is to be a major node, a major cytokine node across indications. That's why we're doing GI, IBD. That's why we're doing derm like HS. That's why we're doing rheu. And our hope is that this node and this antibody can be one of the best, if not the best biologic in each one of those indications and be one of the safest, if not the safest. Because if we're in that situation for each one of them, that will be great. And in that situation, your comparator changes.

In IBD, you think of IL-23 and HS, you'd think of IL-17AF. So our ambition is broad in relationship to that. Specifically to your question, we need 2 Phase IIIs to be able to file. We should be getting some of that data this fall. I don't know that I will have all the data for any conference this year, but more likely the beginning of next year.

Okay. And then Rob, what does that mean more broadly? Again, if this is a cornerstone for an immunology franchise, again, I've seen some of your peer companies kind of struggle to scale in immunology because of, again, that kind of -- maybe they've got one asset, but maybe it's not like a best-in-class, first-in-class or later, and they don't have enough other assets around it. So how do you think strategically around what TL1A is for the company and your presence in immunology?

Well, I would start by saying we are committed to playing in immunology as an important therapeutic area. And if you look at what we have, both with our TL1A with Tulisokibart, but also what we have, which hasn't been fully disclosed, but in our -- we have a lot in actually our Phase I pipeline moving into Phase II, which as we move over the next year to 2 years, you'll start to see increasing cards turn over. And I think our strategy will become more clear.

But as Dean said, whether it's in rheumatology, whether it's in dermatology, in IBD, we are covering the landscape with the studies we have going. I think the important point you raised is, do you have a drug which is best-in-class, first-in-class? We need to see the clinical data. We need to get the final outcome. If it plays as we hope and we believe it could, and we do have something which is a best-in-class, a new mechanism, as Dean has pointed out, I think that's a different situation from a competitive landscape, it's hard for people to close you out if you have a drug that brings unique characteristics.

So we need to know that. But beyond that, how do we build around it with a portfolio of assets? As I said, many we have internally. We also continue to be open to adding through business development. So this is an area where if we see interesting science, we will move opportunistically because we do think that this is an area we want to be in for the long term.

Okay. Maybe just a couple of quick hits here in the last minutes. One is just on China. I know that has been a source of innovation for you guys, Kelun, LaNova. Again, maybe another asset that I'm missing. But I guess the question we get sometimes is there a risk that either the U.S. government or the Chinese government tries to stop these kind of cross-border deals. I mean what's your take on that?

Yes. I don't want to get -- I don't want to try to speculate on what the U.S. government will or won't do. What I will say is the conversations we're having with Washington is really around respecting and understanding the concerns around national security and making sure that we don't take that lightly, but also recognizing that there's innovation happening in China that should be available. We want to have available -- made available to U.S. patients, to European patients and others. And the real focus needs to be on how do we keep our competitive edge. We are the leader as the United States today. We need to focus on continuing to maintain that. The area where we see the greatest opportunity continues to be in how do we modernize, how we run clinical studies in the United States, primarily as you think about early Phase I first-in-human studies, that's an area where China has a significant advantage in both time and cost.

If you look at the TrialBlazer program being run right now by the FDA, we're very supportive of that. So let's focus on getting the best system in the United States to keep our lead. Let's put guardrails to ensure that we don't trip into national security concerns. And then other than that, let's let the market work and have access to those assets. But to be clear, as Merck, we look at China as an opportunity, but we look globally. We don't source only from China. We source from around the world. There's great science all over the place, including what we're doing in our own discovery. So we're investing in all of those areas to make sure that we have the breadth, regardless of what happens geopolitically.

Yes. Last one is AI. I had to squeeze one in here. Just what's one nonobvious current use case you've seen at the company at any part of the organization?

Yes. I would say I think people assume that we're using AI a lot, you hear a lot of discussion about target identification and this notion of how can I go in silico, find a target and bring it through. We continue to believe you're never going to go straight from a virtual study into humans and ultimately through development, we think that you need the combination of the wet lab with the dry lab, if you will.

But that said, where we have seen meaningful benefits it's, frankly, when we talk about the fact that we're seeing above average PTRS, including especially as we look at our Phase I pipeline, a lot of that is driven by what we have been able to already do with AI, which is how do you think about molecular design and molecular design optimization. And if you can do that early, you can start to get out a lot of the safety issues. You can get to an optimized molecule.

That increases your probabilities it makes it through. It allows you to move faster to get to the optimized target, which brings lower cost. And we actually are benefiting from that and actually are building those savings into our budgets today. So that's something I think is fully -- not fully appreciated is around how you think about molecular design.

Great. Well, I think we're up against time. But Rob, Dean, really appreciate it.

Thank you all.

Thank you.

Great. Thank you for joining us for the afternoon session today. We have team Merck with us. So with us, we have Caroline Litchfield, the CFO of the company. We have Dean Li, the Head of R&D, President of Merck Research and everything. So thank you very much for joining us today.

Thank you for having us.

So I will turn it over to you, Caroline, for all the -- to give us the overview of all the great things you are doing at Merck. And yes, let's just start.

So thank you all for being here today, and thank you for your interest in and support of Merck. Since we were here a year ago, we've made tremendous progress. And that progress is all anchored towards driving our long-term growth ambition. This time last year, we were talking about 20 or so human health products that had the promise of delivering impact to patients and more than $50 billion in non-risk-adjusted revenues by the mid-2030s. At the start of this year, we announced at the JPMorgan conference, we see more than $70 billion of non-risk-adjusted revenue from this suite of human health products. So the transformation of Merck's portfolio is underway.

We've launched several new products. We've seen progress across our clinical book of business, and that's across oncology, cardiometabolic, ophthalmology, immunology, HIV. On top of that, we continue to augment our pipeline with value-creating scientifically focused business development. That includes the acquisitions in this last year of both Cidara and Terns. And we've got an Animal Health business that continues to exhibit strong growth. So we're excited and confident in our future.

And we're going to fully invest behind the opportunities we have with our expansive pipeline and our launches to drive growth into the future. We've got many clinical readouts coming, and I'm sure we'll talk a lot about that. But overall, we are confident in the execution of our strategy, and we're confident in our future. So we look forward now...

Awesome. We are also looking forward to it right now. So last year, we have Eliav here, and I kept asking you what's sac-TMT that you have all these trials going on, what gives you confidence to make such investments. And his response was that we appreciate that you have not seen that what we have seen with Kelun data that are generated in China. Now we are seeing some glimpses of that. So talk a little bit about in last one year or so, what you have learned with sac-TMT and what is still underappreciated for the asset at this point?

Yes. So for sac-TMT itself, you could argue it's the third TROP2 ADC. Whenever you're coming in with a third TROP2 ADC, the minute you say it, they're like, why are you doing? And the concept for us is that we had already seen some data just from preclinical that made us think that this ADC, the linker payload was going to be a cornerstone and would have a different benefit risk ratio, especially in combinations.

The other sort of thing that was really important is that we've had a close relationship with Kelun. And so we trust them implicitly in relationship to how they conduct their trials in China. And the reason why that's important is we almost use it as a reconnaissance force to figure out where we should play. So our initial focus was when we looked at everyone else's TROP2 ADC, we're actually very surprised how focused they were on breast and lung and how not focused they were in other indications. So we put in 17, and 13 of them were not in breast and lung. But we said in breast and lung, we would be thoughtful and we would strike when the time was right.

And what you've seen in the last year is that strategy coming out. Our endometrial is likely to be the first TROP2 ADC, and those 13 trials are moving. But in lung and breast, those data are coming through. You saw in Kelun in China data, in Phase 3 data, very compelling data across the PD-L1 standard. And so I think that gives us great confidence in moving our sac-TMT into lung and being more aggressive about it. You'll probably see data about breast cancer that will allow people to do a comparison. But the other sort of thing is we think the data for sac-TMT is substantially differentiated that not only does it give us an opportunity to be in lung and breast with sac-TMT, but it has us be in a differentiated position to consider things like PD-1, VEGF.

Right. And a lot of us are actually seeing sac-TMT as a replacement for KEYTRUDA, but it does seem like -- it's actually targeted chemo basically. So it could go much further than that. So how do you internally see this asset -- as an asset which like in terms of like just like protecting lung cancer versus like broadening.

Yes. I mean, essentially, our initial strategy was not to protect lung and breast and to go everywhere else because we were -- we were a little bit surprised that other people hadn't done that. And you've seen, let's say, where the growth of KEYTRUDA and other agents have been outside of lung and breast. It's in women's cancer, it's been in those sort of places. So we felt that, that was ideal. More recently, we're now -- the Eye of Sauron is moving back into lung and breast. And that's where we're focused on.

And I think people have asked, are you going to try to do the whole KEYNOTE-189 with sac-TMT? And the bottom line is we intend to go with sac-TMT in the breadth of PD-L1 indications. But one of the things that's available to us is that we believe in many of those indications, we just need to use pembro. But in some of those indications, we may have a unique position to drive a PD-1/VEGF. And so we're being very thoughtful in relationship to that. So it's -- actually, we went outside of lung and breast, and now we're moving back in.

Now it's funny, right? I mean, like this question has moved from why are you running 14 trials to why are you not -- why are you only running 14 trials?

Right. I mean we want to strike when the time is right, and it's to our advantage.

Got it. Completely makes sense. So I mean, you have an event at ESMO as well, you'll see a lot more data there. How far are we from seeing a VEGF/PD-1 plus sac-TMT kind of those combination trials starting at this point?

So I think in the clinical trial side of the government, it becomes very clear to people that we are exploring indications of a PD-1/VEGF with sac-TMT and that we are clearly exploring PD-1, VEGF with WELIREG. And I think people can immediately calculate, okay, there's 50-plus indications for PD-1s and PD-L1s. There's maybe 6 to 7 indications with VEGF. And then of those, the question is, does Merck have a third arm, which truly distinguish that they can go in, in combination. And so what we've said is those 2 agents, our sac-TMT and our WELIREG look different than other people's agents. And so that's a place where we're wondering, hey, can we use it to really amplify what PD-1/VEGF can do.

Got it. Got it. So some of that -- I mean, like I think at ASCO, you talked about it. In due course, you'll have...

Yes. I mean those trials in the clinical trials, I mean, they're posted.

Helpful. Thank you. So going to the strategy side of things and then looking at the -- like -- I mean, like all the success that Dean's group has had in the last 12 to 18 months here and then M&As and all, when you look at the model like 4, 5 years down the line, like how do you see the patent playing out in your internal model? Like is it -- because the -- a few years ago, Rob had this ambitious goal of growing through the LOE. So how close are you to realize this dream?

So our ambition over the last several years has been to diversify within oncology and diversify outside of oncology. And as you've just discussed in oncology, we're feeling very good about the progress we're making with a number of great assets. And similarly, outside of oncology, we feel extremely good. As Rob has described, as we look forward to the LOE period of KEYTRUDA, we do not see a cliff in terms of how revenues may evolve. Instead, we see more of a hill with a quick return to strong growth.

Now that's on a risk-adjusted basis. If we were to look at our own numbers on a non-risk-adjusted basis, the path to growing through the KEYTRUDA LOE is something we continue to aspire to and could become a reality. But the reality is we're not running our business to achieve a certain profile in a single year. What we're doing is we are prosecuting this expansive pipeline in a way to enable us to have sustainable growth into the future, and that remains the priority of our company.

Got it. Very, very helpful. So going back to oncology, so INT. So success we have seen with melanoma, again, I think Phase 2, like it does look like -- I mean, I don't know, data will reveal themselves, but -- with the early success in melanoma, how comfortable should we feel about the other indications you are also pursuing here?

So all in all, even though INT is not a conservative program, the way that we've actually prosecuted is reasonably conservative. We have focused INT where KEYTRUDA works and works in early stage. So that's where we've focused. And then the other place we focus is in a span of tumors that have varying tumor mutation burdens, we've done that. So in the situation with melanoma, it's highly sensitive to IO agents and there's a high tumor mutation burden.

I think that when people see the data, when it gets presented hopefully at a meeting this fall, they will study the Phase 2 and ask how close is this to the Phase 2? Because if you can replicate something close to the Phase 2, which as a sort of oversimplified way of looking at it, what you have is you almost double the number of people who are cancer-free on top of KEYTRUDA. And it isn't like KEYTRUDA doesn't do, it does do something. So that's pretty good.

But the also important sort of thing is you know from a Phase 2 that if you look year 1, year 3, year 5, those people responded, stay responded. So when people see the Phase 3, I think there -- it's not unreasonable to sit there and say, how close is the Phase 2? And they may extrapolate and say, this probably will look like this in Phase -- in 5 years, 7 years, maybe. So I think that will be an important point.

The stronger that data is, it's no different than when KEYTRUDA and OPDIVO came out. The stronger the data was for OPDIVO and KEYTRUDA in melanoma, the more likely you thought it was going to work in lung, which would make it more likely. So I think it wouldn't be unreasonable that if you saw something close to Phase 2 versus not seeing something close to Phase 2. If you saw something close to Phase 2, your pretest probability, at least in some of these IO sensitive and higher tumor mutations, I think many people will calculate in their brain that becomes more likely.

Got it. So like I think you talked about like melanoma is probably more immune -- IO sensitive tumor versus RCC is probably on the other spectrum. In an event that it works in Phase 2 RCC trial, like how big an opportunity does it open up for you?

Well, I think what people will do is they'll consider them as bookend, right? They'll sit there and say, melanoma, okay, RCC is IO sensitive, but it's a lower tumor mutation. So they'll go everywhere between melanoma and RCC and say, okay, non-small cell lung cancer becomes more likely, head and neck becomes more likely. That's how they'll calculate it. They'll sit there and say, well, RCC has around the same tumor mutation as MSS CRC, but MSS CRC doesn't have it.

So I think what someone will do is they'll look at that bookend and they'll do the KEYTRUDA story over and probably probabilize that bookend. And I think that's how people will interpret the data. And to be very honest, that's probably how some of us would interpret the data.

Got it. Makes sense. With all that clinical success, you are creating a good problem for your CFO. In terms of -- like obviously, with the success, you have to invest heavily in the R&D as well, which is the right thing to do. But like -- so this is a question we get from investors a lot that now that the pipeline is really vibrant and growing, you did some deals as well. How -- what are the puts and takes when you think about the guidance for next year? How should we think about expenses and revenues for next year? And I don't want you to give guidance, but obviously, like can you help us understand that?

So we're not giving guidance at this stage, but to give some themes as we look at our business in 2027. 2027 will be another year of investment for our company because we will, as we've noted, invest in this expansive pipeline, and we will invest in our launches so that we are successful in the marketplace. As you look at the P&L, on the top line, we would expect modest growth. We'll have increasing contributions coming from our launch products. They will be partially offset by some headwinds we anticipate on products that face generic competition or will face generic competition.

Notably, we have BRIDION, we have JANUVIA, and we have Adempas that loses LOE at the end of this year. KEYTRUDA remains such an important product for our company for the world, but growth is slowing, as you would expect, given its current phase in its life cycle. We are looking for some pricing pressures in the world, specifically in Germany, where we've seen some policy changes that will impact, I think, growth for KEYTRUDA next year. And we expect our Animal Health business to continue to have strong growth.

As we look at gross margin, we're expecting some improvement in gross margin as there's the roll-off of a royalty on KEYTRUDA. From an expense perspective, as you rightly note, we are in a fortunate position that in a disciplined way, we will invest fully behind our business. And we would expect our investments to grow at a similar rate as what we've seen in 2026 when you normalize for any of the BD upfront or the funding we received for sac-TMT. So we're expecting expense growth of around mid- to high single digit. And then the only other line to call out would be on other income expense. We'll see interest expense tick up a little given the debt that we issued during this year for the business development that we've done. But in summary, a year of modest top line growth, driving expenses to support our pipeline to enable long-term growth for our company.

Very helpful. Thank you very much for that. So now I want to move beyond oncology because you have a lot going on beyond oncology as well. Maybe starting with the EyeBio asset. I mean, you'll have data this year in one of the trials. So the question here is, it's a trial, non-inferiority trial versus Lucentis; however, does -- do you internally believe that you have potential to demonstrate superiority there? Because the argument is that you are going after the weakest drug there, but a little bit refractory setting. So you're going after a different market there. How should we think about -- how did you think about the commercial opportunity when you designed the trial?

Yes. So we had the fortunate concept that when we're designing the trial for MK-3000. We also know that we have MK-8748. So the 2 of them together, although we're prosecuting each one independently, makes us think about the field a little bit differently. So all the anti-VEGFs, whether you go from Lucentis to EYLEA to Vabysmo, they've all been non-inferior trials, right? And so what we're hoping is with 8748, which is not MK-3000, but it's an anti-VEGF/Tie2 agonist. We are hoping that, that one will be a best-in-class anti-VEGF.

So that to us is like going right down in the belly of the beast and saying, of all of these molecules, this one will be the best. In relationship to this Wnt agonist, all of the other major medicines have been VEGFs. There haven't been an anti -- another sort of non-anti-VEGF. And people recognize and ophthalmologists recognize that anti-VEGF is really important, but anywhere between 30% to 40% of people don't respond or stop responding. So what we wanted to do is create an option for them. So all of a sudden, they have 2 hands to fight. They have the best anti-VEGF and they have the first non-VEGF pathway.

And we believe that in true practice, what will happen is ophthalmologists will begin to mix and match them on their own. So for us, it was just really important to have a really clear signal that if -- right, no one's had a new mechanism of action, and we're hoping that MK-3000, remigromig is that first non-VEGF pathway. And if we can do that and also come up with 8748, I think we could really create a situation where ophthalmologists will think about their field for diabetic macular edema and for neovascular AMD, 2 of the major places very differently with both agents in their hands.

Is there a reason to believe Wnt would also work in AMD?

I think you would say that there is a chance that Wnt would be it, and it's more from the anti-VEGF sort of field. In general, things that have worked in neovascular AMD have worked in DME and DME and neovascular AMD. I think for 8748, you've been very, very strong because there's so much precedent. What people would push back is, well, that's great. You have a new mechanism of action, prove it to me. So the issue is that whenever you have a new mechanism of action, I do think that you have a high standard to convince people, and it behooves us to prove that to people.

Makes sense. So with the Tie2, the data on OCT and [indiscernible], they are pretty strong actually compared to anti-VEGFs as well. So how do you envision like this playing out? Like -- is that the reason you believe it is probably the best in trial? Like what gives you...

Well, you just see the different VEGFs and you see Vabysmo, right? Vabysmo is essentially noninferiority, but there's a sense that it dry the eye faster. We're hoping that whatever that spot number is, we're -- ambition is to be superior to it. And that's what that data suggests. And it's not how dry it is, it's how fast, right? What the ophthalmologists, they want to dry you out fast because it's that wet, dry, wet, dry, that thing, that's what disrupts things. So it will be how dry we can get them, but also how fast we can get them. And so when you look at this, the OCT is how they start thinking about it. So for them, OCT is not just a biomarker, it's how they actually think about treating. They actually use that number.

Yes. I mean they treat based -- on the basis...

That's what they treat. It's -- we may talk about heme malignancy. Heme malignancy starts talking about MMR and DMR, right, in some of our trials. People will treat to that number. People are beginning to treat in practice to OCT. So we think that is an important readout.

Very helpful. Moving to TL1A. So I mean, congrats on the success of ulcerative colitis trial. how -- so there are 2 schools of thoughts there. Like one is that TL1A, it doesn't have to be superior. It like -- it doesn't have to be numerically better than IL-23 or anything because it is super clean drug. This has a place, and it's a new mechanism of action, so it should have a place. And then there's the other one because like with IL-23, AbbVie and all these guys are going into combinations and all. So maybe the bar to move into first line will be higher, so it becomes a second-line drug or combination will be important. How do you envision the market in the next 4, 5 years?

So I would separate the different places, right? So in our mind, we're trying to make TL1A a really important node. Other important nodes are TNF and IL-23 and IL-17 and they dominate in different indications. So we'll have to sort of play this out. I think for GI, which is ulcerative colitis and Crohn's disease, I think people start thinking of drugs like IL-23 is -- they're highly effective and they're reasonably safe.

I think some people start talking about other mechanisms like integrins that some people believe are maybe not as effective as the IL-23s, but they're extremely tolerable. So people stay on. Our ambition for whether we're talking about GI or Derm or Rheum is that among the biologics, we are the best, if not the best, but we are the safest as well. And that in each different indication will be important. And it will also be important because it gives us a degree of flexibility because if you have one of the most effective, if not the most effective and you're extremely safe, should you do a combination strategy, you're in a very good position than if you don't have that profile. So that's the profile we're looking, whether it be GI, whether it be derm, whether it be rheum.

Got it. Very helpful. Another question I have is the asset, which is -- which I know you have -- you have an expertise in PCSK9, oral PCSK9 here. So Amgen, Regeneron, they all try to get into primary care market and statin is pretty much a primary care market right now. So to get into that segment, so this is an oral, so primary care should be using it, but how important it is to have an outcome data, not only in secondary prevention, but Amgen now has data with the VESALIUS trial in primary prevention as well. And you've got a really good label actually there. So talk a little bit about like how do you make inroads into that market?

So I'll have Caroline talk about the commercial push and pull. I'll talk scientifically from it. So just to be really clear, not all PCSK9s are the same. The antibodies, I think, in general, people think of LDL-cholesterol lowering of 60%. If you look at the siRNA or other things that affected PCSK9, I think the number is more in the 50%. So not all PCSK9 is the same. I think the field and the FDA was very clear. They understood that this was designed to do something very similar to the antibody.

And essentially, it was designed with the concept of can I do the same thing that a biologic does, but do it in a pill. And what people saw from the biomarker data, which is LDL and ApoB and this, the profile looks surprisingly similar in a biomarker sense to the antibodies. We still need to do the outcome trial, but I think many people in the field sit there and go, okay, this was designed to interdict PCSK9 LDL like the antibodies. It gives you a biomarker profile that looks similar.

They're going to have to do the outcomes trial. But I think the FDA recognized it and you saw how they recognized it because they didn't make any comment in terms of not having cardiovascular outcomes in the label. What they emphasized is this should be as an add-on in statins, and they reminded everyone that statins has outcomes trial, and they also reminded everyone that the monoclonal antibodies, which this was designed to mirror was also in the label. But we do have to do the outcomes because we have to prove that. But I think for many cardiologists and many people seeing the profile of the LDL and knowing the history of PCSK9, I think many people will be very comfortable prescribing it, especially if it's extremely accessible. And then from commercial, I'll have you speak about that.

So we're very excited about the opportunity we have to bring an oral PCSK9 to really address this epidemic that exists. What we have with LIPFENDRA is we're entering a market that now has guidelines in place after many years where those guidelines did not exist on treating to a target level of LDL. And so those guidelines will really help unlock some of the inertia that exists in this marketplace. In the U.S., there's 30 million people who are taking statins who are not at goal.

About half of those are secondary prevention, about half are primary. And we think initially, we expect utilization to be more in that secondary group, those who have established ASCVD. We're getting really strong feedback at this stage from those who have seen the data, understand the data, understand the accessibility of this oral product and see the pricing strategy that we've had as a company. And initial scripts are looking good. So our confidence in LIPFENDRA and its ability to be multibillion dollars in peak revenue is high. We're working hard to break that inertia, and we expect to see good uptake ahead of the CVOT study.

We did the survey, primary care doctors really like it actually. So that will be interesting.

Maybe this is too personal. I actually tested the system because I had a non-cardiologist write me a prescription. I got it.

That's interesting. Awesome. Thank you for that. So the last asset on pipeline side, I want to talk about is CD388. So I mean now you're running the -- like 2 seasons in Northern Hemisphere, 1 season in Southern Hemisphere. Just like I think -- just walk us through like any change in conviction and confidence in the trial so far? And it does seem like you do see Europe also as a market now opportunity as well. So talk a little bit about how your thought process has evolved since you bought [ Cidara? ]

To be honest, it hasn't really evolved that much. The critical piece of information for me is the way that you give this medicine, so it's essentially an antibody drug conjugate. That's the simplest way to explain it, where the drug is an antiviral. And the issue that comes up is that you go to your physician and you get 3 jabs. And there was a view that was held throughout the field that you really shouldn't launch it with 3 jabs. You should launch it with 2 jabs because -- at one time, right, you come in, someone gives a leg, leg and then do your bum or something. I mean it's -- so they really thought that 2 was really important.

So the minute that we do this, that means we have to change 3 jabs into 2 jabs. That immediately creates a time of when we can launch. So the concept for me is until that time comes, I'm going to get as much data as possible because it's not just that I get a label. Remember, this is not going to be sold at the price of the influenza vaccine that I just got from the drugstore. It's going to be more expensive. And so the question that comes up is we think that this is a really important product for the U.S. but also with MFN, we can't have a tenfold discount in Europe.

And so we need to find patient populations where we can hold that price in a situation where we have robust subpopulations. For example, it's not just immunosuppressed. If someone has cardiovascular risk is on LIPFENDRA, should they get it. That's the type of data because it's one thing for the label, which is really important, but especially outside of the U.S., how you deal with the HTA agencies will become really important. And the more strain, the more data, the more different subpopulations that we have, whether they're statistically prespecified or not will be important for those situations. So we're not delaying the launch in any way. The minute you decide that you're going to do 3 jabs into 2 jabs, you create this issue. So my concept is let me play it out all the way to the end and get the maximum amount of patients.

Very helpful. There's no Merck discussion without talking about BD. And there was a time last year or so, like we were waking up every Monday waiting for a press release to hit Merck bought something. So you have been very active, and it shows in pipeline now. Now where you sit right now, how do you think about, one, the need for BD? Number two, if you do see it, like how do you think about what would be the asset? What kind of asset or profile of asset would you be interested in?

We're proud of the BD that we've done thus far. We've brought some great assets into our company that have the opportunity to advance patient care and drive growth for our company in future. As we look forward, that strategy is unchanged. We will continue to look for the best science externally that when brought into Merck that will create value, address areas of unmet need and drive growth for the company. We're not desperate to do any deal, but we will continue to do the right types of deals for our company.

What we've talked about in the past, and that's consistent today is a sweet spot has been deals that are in the $1 billion to $15 billion range. And we've also talked about as we look at areas of unmet need, that including oncology, including cardiometabolic, but we also see immunology as an opportunity space. So BD will remain an area of focus for any cash that we have at our disposal but science-led to drive patient impact and growth.

Dean, anything to add?

Whatever money she has, I know how to use it.

Thank you very much. On that high note, I really appreciate you joining us today. Thank you.

Thank you for standing by. Welcome to Merck & Company, Inc. Rahway New Jersey USA Second Quarter Sales and Earnings Conference Call. [Operator Instructions] 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.

Thank you, Shirley, and good morning, everyone. Welcome to the Second Quarter 2026 Conference Call for Merck & Company Inc. Rodway 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'd like to point out that we have items in our GAAP results such as acquisition-related charges, restructuring costs and 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 U.S. Private Securities Litigation Reform Act of 1995.

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 and 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 & Company Incorporated 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'd like to turn the call over to Rob.

Thank you, Peter. Good morning, and thank you for joining today's call. I remain very pleased with the substantial progress we're making across our business, driven by strong execution, growing contributions from new product launches and the continued advancement of the next wave of innovation from our pipeline.

Earlier this year, we provided insight into greater than $70 billion of commercial opportunity we have from over 20 new products that we expect will transform our portfolio and, in many cases, the practice of medicine as well as fuel growth well into the next decade. We also outlined a series of clinical milestones that represent key events to substantially derisk this opportunity.

Since then, we've made meaningful advancements against that objective, including several important proof points that have occurred over than expected. This progress further bolsters my high confidence in the future of our company and our ability to create long-term value for patients and shareholders.

Turning to our second quarter results. We delivered revenue of $16.6 billion, reflecting continued strength across Oncology and Animal Health as well as increasing contributions from our recent launches. Importantly, while we're delivering for patients today, we're also making substantial investments in the next generation of innovative medicines and vaccines. We remain confident in our outlook for the remainder of the year, which Caroline will discuss in more detail in a moment.

We also achieved several important clinical and regulatory milestones. In cardiometabolic, the FDA approved LIPFENDRA, the first and only oral PCSK9 inhibitor to help reduce LDL cholesterol in adults with hypercholesterolemia along with diet and exercise. We're pleased to have worked with the FDA through the Commissioner's national priority voucher process to bring this important new treatment option to patients on an accelerated basis. We look forward to providing broad access for patients to help address elevated LDL-C a major modifiable risk factor for cardiovascular disease.

In Oncology, we received several approvals that underscore the ongoing impact of KEYTRUDA and the enduring strength of our oncology portfolio. At ASCO, we presented encouraging data that further demonstrate the durability of KEYTRUDA and at our investor event, we highlighted advances for a number of promising candidates across our pipeline. This included the first positive top line results from our expansive Phase III global clinical development program for sac-TMT, our TROP2-directed antibody-drug conjugate in certain patients with advanced or recurrent endometrial cancer.

In Immunology, we announced positive Phase III top line induction results for tulisokibart. For certain patients with ulcerative colitis and are starting to see the first of numerous additional trial readouts, reinforcing our confidence in the potential of this program. And at the age 2026 Congress last week, we shared compelling data from our broad HIV pipeline, including firslatrivir in combination with lenacapavir, which has the potential to be the first oral once-weekly HIV treatment for virologically suppressed adults.

We are excited to be returning to the HIV field with an array of important therapies, including the recent launch of Envinzo. Ahead of the meeting, we also announced initial access plans for alomotrivir, our investigational once-monthly oral HIV prep candidate now in Phase III studies, underscoring our commitment to help enable broad and sustainable access to this candidate upon its potential approval. We also continue to augment our portfolio through disciplined business development.

During the quarter, we completed the acquisition of Turns Pharmaceuticals, adding MK-4208 and a novel, potentially best-in-class therapy for certain patients with chronic myeloid leukemia. This transaction strengthens our hematology pipeline adds another promising late-stage growth opportunity and reflects our continued focus on pursuing science-driven business development that can benefit patients and enhance long-term shareholder value.

This quarter marks my fifth year as CEO. And as I reflect on the commitments our leadership team made in 2021, our strategy was clear: maximize the transformative potential of KEYTRUDA expand, deepen and extend our leadership in Oncology, bring forward new growth drivers across additional therapeutic areas and advance Merck's mission of using the power of leading-edge science to save and improve lives around the world.

Today, I'm proud that we are successfully executing on that strategy. Each year, we're making important progress in building a stronger foundation for our future. We're broadening and diversifying our pipeline. Advancing multiple potential blockbuster opportunities and achieving clinical, regulatory and commercial milestones that will benefit patients and enhance our long-term growth trajectory.

I believe Merck is substantially stronger, more diversified and better positioned for sustainable growth than it was just 5 years ago. While more work remains, I'm increasingly confident in Merck's future, particularly with the rapid pace of clinical and regulatory events now occurring. This confidence is grounded in the strength of our science, our disciplined approach to capital allocation, including business development, and the dedication of our colleagues around the world who work every day to deliver for patients.

I want to extend a special word of thanks to our global team for this substantial progress and for their commitment and execution on behalf of patients, shareholders, and all of our stakeholders. And now I'll turn the call over to Caroline.

Thank you, Rob. Good morning. We delivered growth in the quarter, led by continued strength in Oncology and Animal Health along with increasing contributions from our diverse and compelling new products across an array of therapeutic areas. Our strong commercial and operational execution continues to drive near-term performance while we invest in our outstanding pipeline to create long-term value for patients, customers and shareholders.

Now turning to our second quarter results. Total company revenues were $16.6 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 4% to $8.4 billion, with global growth driven by strong uptake in earlier-stage cancers and continued robust demand from metastatic indications.

Strong utilization in tumors that primarily affect women, including breast and cervical cancers, and increased use of KEYTRUDA in combination with Padcev in locally advanced or metastatic urothelial cancer were key contributors to growth. Sales of KEYTRUDA QLEX were $463 million. We have seen physician and patient adoption increase since the permanent J-code was established in April.

As expected, early use has been predominantly in patients who are either on monotherapy or in combination with an oral agent. We remain confident in the trajectory of KEYTRUDA QLEX adoption. Our broader oncology portfolio delivered another quarter of strong growth. WELIREG sales increased 67% to $271 million, driven by continued uptake from international launches and increased use in certain U.S. patients with previously treated advanced renal cell carcinoma.

We are excited that certain patients with earlier stage renal cell carcinoma may benefit from adjuvant treatment with WELIREG following the recent FDA approval of LKTESPARK022. In vaccines and infectious diseases, GARDASIL sales were $1.2 billion, an increase of 3%. Sales in international markets grew 6% while the U.S. was roughly flat as lower demand and timing of CDC purchases was largely offset by price.

In pneumococcal, CPVAXIVE sales were $184 million an increase of 40%. Growth was primarily driven by uptake from ongoing launches in certain international markets as well as higher demand in the U.S. In HIV, we are pleased to have launched IDVYNSO, our once-daily oral 2-drug single-tablet regimen of dereverine and islatravir for certain virologically suppressed adults.

We have seen encouraging early progress on access and reimbursement and look forward to broadening access over time. In cardiometabolic and respiratory WINREVAIR global sales were $588 million, an increase of 75%, reflecting continued strong demand from adults with pulmonary arterial hypertension.

In the U.S., we saw further progress with more than 1,800 new patients having received a prescription and an increase in the proportion of patients whose background therapies do not include a prostacyclin. Outside the U.S., we continue to progress with ongoing launches. OHTUVAYRE sales were $204 million, reflecting continued prescription demand from patients with COPD and as well as the benefit from the timing of specialty pharmacy purchases.

Our Animal Health business delivered another quarter of solid growth, with sales increasing 5%. Livestock sales grew 6%, driven by higher demand for ruminants and poultry products. Companion animal sales increased 5% due to new product launches. I will now walk you through the remainder of our P&L, and my comments will be on a non-GAAP basis.

Gross margin was 81.1% a decrease of 1.1 percentage points, primarily due to higher inventory reserves. Operating expenses increased to $12.6 billion. There was a $5.7 billion charge for the acquisition of Terns Pharmaceuticals in the quarter compared with a $200 million business development charge a year ago.

Excluding these charges, operating expenses grew 7%, reflecting increased investments in support of our launches as well as our robust early and late phase pipeline partially offset by benefits from our multiyear optimization effort and recognition of a portion of the external funding for sac-TMT development.

Other expense increased to $290 million, primarily reflecting financing costs related to recent business development transactions. Our tax provision was $882 million. As a result of the nontax deductible onetime charge for Terns, our tax rate was 160.3%. Taken together, we reported a loss of $0.13 per share, which includes a onetime charge of $2.31 per share from the acquisition of Terns.

Now turning to our 2026 non-GAAP guidance. We have raised and narrowed our full year revenue guidance range to be between $66.3 billion and $67.3 billion representing growth of 2% to 4%, including a positive impact from foreign exchange of approximately 1 percentage point using mid-July rates.

Gross margin is now assumed to be approximately 81%, reflecting higher inventory reserves. Operating expenses are expected to be between $42 billion and $42.7 billion, -- this range includes $5.8 billion for the upfront charge for terms and investment to advance MK-4208. This guidance does not assume additional significant potential business development transactions.

Other expense, which now includes the financing costs for Terns is expected to be approximately $1.4 billion. We now expect a full year tax rate between 35% and 36%, which reflects the nontax deductible onetime charge for Terns. We assume approximately 2.48 billion shares outstanding. Taken together, we expect EPS of $2.66 to $2.76 with a midpoint of $2.71, including a positive impact from foreign exchange of approximately $0.15 using mid-July rates.

This range also includes an upfront charge of $2.31 per share related to the acquisition of Terns as well as approximately $0.12 per share of ongoing costs to advance MK-4208 and finance the transaction. As you consider your models, there are a few items to keep in mind for the second half of the year.

First, for OHTUVAYRE. We remain excited about OHTUVAYRE's strong clinical profile and look forward to achieving its multibillion-dollar commercial potential in the coming years. Third quarter sales will be impacted by the unwind of specialty pharmacy purchases in the second quarter. We continue to invest behind our sales force and promotion to reach more physicians and patients in the U.S. We are also working with our specialty pharmacies to improve patient experience. We expect these actions to lead to accelerated growth in 2027.

Next, we anticipate that total U.S. KEYTRUDA year-over-year growth will moderate as we increasingly reach peak penetration across several key indications. Additionally, as a reminder, we benefited by approximately $250 million due to the timing of wholesaler purchases in the third quarter of 2025, which will not repeat this year.

For BRIDION, U.S. sales are anticipated to decline at a slower pace than previously expected due to lower-than-anticipated generic competition. Finally, other revenue in the second half of 2026 is expected to be significantly higher than the second half of 2025. This increase is primarily due to our revenue hedging program as well as an expected milestone receipt in the fourth quarter related to an out-license agreement.

Now turning to capital allocation, where our strategy remains unchanged. We will continue to prioritize investments that support near- and long-term growth including our new product launches and robust pipeline. We remain committed to the dividend with the goal of increasing it over time. Business development remains a high priority, and we maintain the ability within a strong investment-grade credit rating to pursue additional science-driven value-creating transactions.

We are on pace for approximately $3 billion in share repurchases this year, as previously communicated. To conclude, as we enter the second half of the year, we remain confident in the outlook of our business, supported by global demand for our innovative medicines and vaccines, including our many new product launches. The transformation of our portfolio is underway and we are well positioned to deliver value for patients, customers and shareholders now and into the future.

With that, I'd like to turn the call over to Dean.

Thank you, Caroline. Good morning, everyone. The second quarter was marked by several important regulatory and clinical milestones. Today, I will provide updates in cardiometabolic disease, HIV and infectious disease, immunology and oncology. I will conclude with key upcoming milestones as we look toward the second half of 2026.

First, in cardiometabolic disease, as Rob mentioned, we recently received FDA approval for LIPFENDRA, the first approved oral PCSK9 inhibitor. In the CORALreef Lipids trial, LIPFENDRA was shown to be highly effective in lowering LDL cholesterol with up to a 60% reduction when added to a statin.

Earlier this year, updated U.S. guidelines on the management of dyslipidemia from the American College of Cardiology and American Heart Association recognize that atherosclerotic cardiovascular disease remains the leading cause of morbidity and mortality and underscore the need for earlier intervention to help reduce lifelong risk from prolonged elevated lipoprotein exposure.

Guidelines also reestablished and lowered LDL-cholesterol treatment goals, including to under 55 milligrams per deciliter for individuals with ASCVD who are at very high risk of ASCVD events. The approval of LIPFENDRA is a major milestone in our effort to make PCSK9 inhibition accessible in a convenient daily oral option.

As an oral macrocyclic peptide, LIPFENDRA has the potential to extend the reach of this therapeutic approach globally. Additional regulatory reviews are underway in the European Union and China. We are also advancing combination approaches designed to further reduce LDL cholesterol and target additional ASCVD risk factors. Studies are ongoing to support the development of 2 potential fixed-dose combinations anchored by LIPFENDRA, 1 with rosuvastatin and another with MK-7262 our oral LP(a) inhibitor.

Turning to HIV. Yesterday, we hosted an investor event focused on our HIV program, including new data presented at AIDS 2026. IDVYNSO provides the foundation of what we believe will be a series of novel entries into the field. Our late-stage pipeline aims to address unmet needs for those living with or at risk of HIV through innovative oral options, including 2 once-weekly treatment regimens and a monthly oral option for pre-exposure prophylaxis.

In collaboration with Gilead, we announced full results of the Phase III ISLEND-1 and 2 trials evaluating the investigational oral once-weekly regimen of islatravir and Gilead's lenacapavir both studies demonstrated maintenance of virologic suppression and adults living with HIV who switched to therapy from a daily standard of care.

These results support the potential for Isle to become the first approved oral once-weekly treatment regimen for adults with virologically suppressed HIV. Results were also presented from a Phase IIb study evaluating the investigational oral once-weekly combination of islatravir and ulonivirine an internally developed investigational non-nucleoside reverse transcriptase inhibitor in adults with virologically suppressed HIV.

Based on these results, we plan to advance ISO/ULO into Phase III studies for people living with HIV who are previously untreated and those with prior treatment experience. We also continue to evaluate our monthly oral HIV prep option, alematrivir in 2 Phase III studies anticipated to read out next year. Next, in infectious disease. We are progressing our Phase III study of MK-1406, an investigational long-acting strain agnostic antiviral designed to prevent influenza.

Enrollment was completed in the Southern Hemisphere. Plans are now in place to continue the study through a second northern hemisphere flu season to strengthen our global regulatory submissions. We remain on track for potential approval in 2029. Moving to immunology to lesocabart became the first anti-TL1a monoclonal antibody to demonstrate positive results in a Phase III trial.

In June, we reported on the induction only study of the ATLAS-UC trial in patients with moderately to severely active ulcerative colitis, tulisokibart met the primary endpoint of clinical remission as well as key secondary endpoint with no new safety concerns identified. We look forward to the upcoming readout of the larger induction and maintenance study, which together with the induction only study would form the basis of a regulatory filing and will be presented at an upcoming scientific congress.

These findings reinforce the potential of targeting TL1A to help address immunofibrosis, a key driver of disease progression across multiple immune-mediated inflammatory conditions. We have advanced a broad Phase II development program to further explore this hypothesis and now have results from 2 of these studies.

In SSc-ILD, the study did not meet its primary end point. In hidradenitis suppurativa, we are pleased to share that the study met its primary and key secondary endpoints. Results will be shared in due course. Finally, in oncology, KEYTRUDA continues to generate compelling clinical data and regulatory approvals, including in earlier stages of disease.

Recently, building on the approval of KEYNOTE-905, the FDA approved an expanded indication for KEYTRUDA and KEYTRUDA QLEX, each with pets as treatment before and after surgery for adults with muscle invasive bladder cancer based on the data from KEYNOTE-B15, this regimen is now improved regardless of cisplatin eligibility and is the first and only perioperative immunotherapy plus ADC regimen to extend survival for these patients.

We are also pleased that the FDA recently approved KEYTRUDA and KEYTRUDA QLEX in combination with WELIREG for the adjuvant treatment of certain patients with clear cell renal cell carcinoma based on the LITESPARK-022 study. This marks WELIREG's first approval in earlier-stage disease and brings the total number of earlier-stage indications for KEYTRUDA-based regimens to 13.

In June, at our ASCO investor event we shared updates across our broad and diverse oncology portfolio. We also highlighted a series of pivotal readouts expected over the next several years. We are now beginning to see the first of those milestones materialize with the announcement of positive Phase III results from our global profuse development program evaluating sac-TMT.

In TroFuse-005, sac-TMT demonstrated statistically significant and clinically meaningful improvement in both overall survival and progression-free survival versus chemotherapy in certain patients with advanced or recurrent endometrial cancer. We plan to apply the National Priority Review Voucher for sac-TMT towards our filing in endometrial cancer.

These results represent the first readout from our global TroFuse program which includes 17 Phase III studies. The TroFuse program was intentionally designed to pursue both first-mover opportunities where sac-TMT can establish early leadership and indications in breast and non-small cell lung cancer where we can apply novel development approaches. This global effort continues to be informed by promising results generated by our partner, Kelun from their program evaluating sac-TMT in China.

Positive results from the OptiTROP-Lung05 and more recently, OptiTROP-Lung06 further strengthens our confidence in the potential of this differentiated TROP2-directed ADC. In closing, we anticipate a busy second half of the year. with multiple events and milestones, including in cardiometabolic and respiratory, the September 21 PDUFA date for WINREVAIR for the label update based on the Phase III HYPERION study, in immunology for tulisocobart, the second readout from the ATLAS-UC trial and the presentation of data from the Phase II HS study.

In ophthalmology, data from the Phase III BRUNELLO study of remigromig also known as MK-3000, our novel wind agonist being evaluated in patients with diabetic macular edema. And finally, in oncology, potential approvals for WELIREG plus LENVIMA in advanced renal cell carcinoma and for IDXD in extensive stage small cell lung cancer and data presentations from across our broad oncology portfolio, including detailed results of the Phase III Tropuse-005 study. Please mark your calendars for the evening of Monday, October 26, and where we will host an investor event at the European Society for Medical Oncology in Madrid.

I look forward to providing further updates on our progress. And now I will turn the call back to Peter.

Thank you, Dean. Shirley, we're now ready to begin Q&A. And we kindly request that analysts limit themselves to 1 question today so we can get to as many questioners in the time that we have. Thank you. .

[Operator Instructions] First question comes from Akash Tiwari with Jefferies.

Dean, you any stated a biomarker strategy would be the right approach for first-line -- but with sac-TMT, we've seen a signal regardless of PD-L1 expression with the Optitroph105 and 06 data, what are the chances we could see a broad sac-TMT pembro trial that goes head-to-head against KEYNOTE-189 and is it fair to say we could see SAC TMT combos with both pembro and a PD-1 VEGF for first-line lung?

My simple answer is yes on all accounts, but I'll just step back a little bit, which is for a -- sac-TMT we've stated, we think it's a cornerstone ADC. I mean it's a TROP-2 ADC, but it has a novel linker and payload. And as described in the prepared remarks, we've sort of split the Phase III into 1st mover where we go into indications where we thought we could be first. And actually, what we're hoping is that the shops 005 and endometrial sort of gives validation to that strategy.

And as we've noted, we've talked to the administration's FDA, and this will be the 1 that goes for national priority vouchers. In breast and lung, we've said that we need to be differentiated given other TROP-2 ADCs. But as you point out, the Keen Optiro lung 006 gives us a lot of confidence in the target and to target it across the full spectrum of PD-L1 -- so yes, we are going to rethink KEYNOTE-189, which is KEYTRUDA plus chemo, and now we have a TMT as an ADC as a next-gen chemo.

I do think that we're going to be very thoughtful as to the IO agent and when we should use KEYTRUDA and when we should use other agents such as MK-2010, and -- and as you might imagine, we're advancing MK-2010. With that in mind, we are moving quite fast in relationship to initiating trials some that are signal finding some that are dose and scheduling to optimize with novel agents, and we're advancing trials that can go from a Phase II to Phase III seamlessly.

Our next question comes from Umer Raffat with Evercore.

Dean, congrats on the HS trial update for the TL1A, I'm just trying to think out loud to what extent as we go into these new indications, is the activity we're seeing for these TL1As beyond what we would have expected from a TNF. I'm sure you can appreciate where I'm coming from on this?

Yes. Thank you very much. So just to step back a little bit. I think the question is posed and the fact that TL1A is a member of the TNF superfamily, the TNFs have been really important drugs. They have been advanced. There is often problems with combining them because of their safety signal. In relationship to what we've seen so far, clearly, when you think about immunology, you think of 3 buckets, you think of GI, you think of derm and you think of rheumatology.

In GI, clearly, we're very we're very eager to move forward in ulcerative colitis and Crohn's disease, and we're really eager to see the other half of the UC study. In the derm sort of space, we have it in HS and I think that's important as well as we have psoriatic arthritis. I think the positive readout for HS gives us more confidence in the derm sort of possibilities for this drug.

And so that's where we're looking at. I still think that within the room space, which is, let's say, RA and to some degree, psoriatic arthritis, we'll have to sort of play that out as the data comes out. But I can just tell you, for example, for rheumatoid arthritis, we have very clear biomarker data suggesting we should go after TL1A, and clearly in something like rheumatoid arthritis there are animal models in preclinical where you can estimate what your activity is, and we have that data that gives us the strength to move forward in rheumatoid arthritis.

Our next question comes from Terence Flynn with Morgan Stanley.

Two part for me. I was just wondering, Dean, if you could help us think about ahead of the Astra data of ANSA data, what you'd be most interested to see in that data set and implications your sac-TMT development strategy? And then anything you can say, I know it's a colon study, but OPTOTROPNG-06 just in terms of control arm performance in that trial. Any comments?

Yes. So let me take the last question first. We have a great partner in Kalun. We see very detailed data and we are very comfortable with the data that they've shown us and it gives us great confidence in moving forward. I would just highlight that some of the data that we saw is why we, for example, moved quickly to endometrial. So we have a lot of confidence in how they run their clinical trials and their data. I forgot the first half again.

Avanza.

Avanza. I think the critical thing is, I think the vans are -- I think we're waiting to see what the readout looks like. We're looking to see what it looks like in Alchimers comers, what we look like in relationship to biomarker selected. And that will give us some views as to how do we advance ours, the need for a biomarker. You can always have a biomarker, but that doesn't mean that you always need it.

And then the other sort of thing is how we think about advancing it in relationship to combination with an excellent PD-1 like KEYTRUDA or whether or not we should move it forward with an excellent PD-1 VEGF.

Our next question comes from Michael Yee with UBS.

Great. On TL1A, 2-part question. You had 1 positive Phase III in UC but not a whole lot was said. So how do you think we should think about the profile in ulcerative colitis appreciate in the second studies coming and then it's supposed to be all about fibrosis, but then the SSC study wasn't positive today. So how does that change your thinking around Crohn's and that fibrosis opportunity.

Yes. So thank you very much for that question. In terms of the TulaSocaBar Study 2, I mean we're very eager to see Study 1 because together, that will be the package that we sent to the FDA. And we are looking forward to that readout as we advanced it.

Again, in Crohn's disease, there's a clear signal, not just from us but from others. And it's what do we see in Phase III. So I think we're very interested in moving those forward. You can look at some of the derm in the room indications that I spoke about. They will also have fibrosis component. In relationship to SSC ILD. I would just step back. I don't know any anti-cytokine that has worked. So this was a bold move to move that forward. It's a challenging and refractory disease. We see no safety concerns. But I will tell you that when we publish that data as you might imagine, we will.

I look very carefully at the placebo arm. If I see no progression in the placebo arm, it is an SSE IOD, but if I have no progression in the placebo arm, the chances that I will be able to show benefit in a treatment arm becomes much more difficult. So I would not throw out the immuno fibrosis based on the SSE IOD study not reading out positive in the specific patient population we recruited.

Our next question comes from Geoff Meacham with Citi. .

Dean, on the friend launch, I wanted to ask how you guys view the pace of maybe initial access. I wasn't sure what the right reimbursement expectation or if you thought the outcomes trial maybe would be more needed as a commercial tipping point.

So why don't I turn the commercial to Rob, if that's okay? And then I can answer the remaining questions from a scientific standpoint.

Yes. Great. Thanks for the question, Jeff. If you look at it overall, I would just say we're very pleased with what we're seeing so far. Obviously, you saw the label. We have a very clean label, 1 we feel very good about. And with the fact that we have up to 60% LDL lowering, I think this is going to be a meaningful treatment. We're seeing very high interest from physicians and patients based on the approval announcement and ordering has begun last week, and we expect to be able to have it to pharmacies here shortly.

As we look at it from an access perspective, overall, we're, I think, in pretty good shape. You remember, we really tried to set this up for broad access in the way we priced it and the way we're going. That said, we do believe it's going to take time to get that access established. So we are expecting to see the pace not be as fast out of the gate. But with long term, continue to expect to see this to be definitely a blockbuster opportunity as we move forward. I'll let Dean speak specifically to the broader question from a science perspective.

Yes. So 1 of the thing I do want to highlight is there's often a lot of discussion of this FDA or this administration FDA, I can tell you, in our conversations with this administration's FDA, they wanted to use Liffendra as a cornerstone way to demonstrate what they're trying to do with their priority sort of review.

Most of the programs in that priority review only touch one of the sort of the pillars of what they're trying to do. But they were very clear to us they want us to touch all of these pillars. And those pillars is to target public health crisis, an innovative breakthrough, a large unmet need, especially in chronic disease, which is a pillar of this HHS.

They were very clear they want onshoring and supply chain and resilience in the U.S., and they were very interested in accessibility in relationship to increasing accessibility. So those 5 sort of pillars, that's what the FDA and us are racing to do as we launch this important product.

Our next question comes from Chris Schott with JP Morgan.

I guess with the pipeline derisking we've seen over the past year, can get any directional views or updated color on what you're envisioning Merck's earnings profile could look like as we move through the KEYTRUDA LOE? I know the focus of the company is more on the return to growth as we look out into the early 2030s. But just would be any thoughts on that transition period of earnings could look like over that, let's say, 2028 through early 2030s period.

Yes, Chris, thanks for the question. As we've said in the past, we feel very good about the progress we're making with the over 20 products we have coming, $70 billion of commercial opportunity, and we've already started to see meaningful clinical derisking happening at a pace faster than we expected as well as good solid launches from the products that have launched.

So as we sit here today, we feel very good, as I've said in the past, -- we see that as the LOE period is more of a hill than a cliff. Nothing has changed in our view. I do think you're going to see a shallow dip with a fast return back to growth.

And candidly, if we look at it on a non-risk-adjusted basis, we still aspire to grow through it. There still is the potential more to do to achieve it, but we're working to get there. So as I sit here today, I feel very good about where we are and the progress we're making. Always more to do, but I feel good about the hand we have right now.

Our next question comes from Courtney Breen with Bernstein.

Just one on LIPFENDRA, following up on the comments regarding kind of fixed-dose combinations. You highlighted rosuvastatin in your own Lp(a). Particularly with rosuvastatin, I would love to hear a little bit about how you're thinking about which dose you might consider. Is this just for those patients that need further escalation once they've made it to the 40 mg, recognizing there are some more adverse events there?

And then secondarily, are you looking at kind of continuing other combinations. We've heard GLP-1 combinations with the PCSK9s from peers and wanted to understand if you're still advancing or considering this opportunity. Finally, we haven't seen it yet pop up on Tronox. Just wondering kind of when we can expect that access channel to begin to become available?

Why don't I let the TrumpRx go to Rob and then I'll take the rest of them?

Yes, we're excited about the opportunity. And as you know, in our MF agreement, we did commit to putting Lifendra on Trump Rx. Those plans are underway. We're working on obviously getting the initial launch moving -- and as soon as we get that going, we'll get it on TrumpRx. So more to come on timing there.

Yes. In relationship to your combination question, thank you very much. I mean right now, we have an oral PCSK9 that was designed based on the learnings of the antibodies, and we have been able to achieve up to 60% reduction in LDL cholesterol. We are hoping that with rosuvastatin, we would provide to be all the doses. But that combination, we think that we could get up to 80%.

I mean, if we could get up to 80% in a combination, that's a good day for medicine. So those are the sort of way that we think about the rosuvstatin for the LP liter way, we'll have to see what the LP(a) actually does in relationship to the reduction -- but we are hoping that in a patient who has high LPA that our combination will be able to give unprecedented CVOT outcomes in relationship to that.

In relationship to GLP, we have focused and said that we're focused on oral combinations. And there is clearly the ability to combine GLP and PCSK9. One of the things that we are very thoughtful about is that for the GLPs, you kind of do the step-up sort of dosing -- there's a lot of nausea and vomiting. So we can combine GLP plus PCSK9, but so far, we have not announced that, that's a combination that we're actively doing in the clinical trials website at this point.

And this question comes from Jason Gerberry, Bank of America.

Just another lavender question. How do you guys think about the opportunity for injectable PCSK9 switch versus is the bulk of the opportunity more in PCSK9 naive patients. And 1 thing that we've noticed with injectable PCSK9 relative to statins is pretty low use in the primary care setting. So how do you see kind of the availability of now an oral when you say democratize access to sort of adoption dynamics in the primary care setting?

Yes. Thanks for the question. As we've said many times, we are not focusing this market on how do we take share from the injectable PCSK9s. If you look today, injectables only reach about 5% or less of the total market. We're sitting today here in the United States with 30 million people receiving lipid-lowering therapies, who are not at their recommended LDL levels and who -- even more who go untreated.

So the potential here is much bigger. What we are about is market expansion and helping people understand that cardiovascular disease continues to be the #1 silent killer in the United States. We now have a drug that reduces LDL, which is 1 of the leading causes of arteriosclerosis, leading to that cardiovascular death, by up to 60% on top of statins and everyone who is at risk should be on 1 of these medications.

So our goal is to expand, build the market, educate the market, and we're doing that with what we're doing with the guidelines. Obviously, this will all take time because there is inertia we're working against. But if we are successful, this frankly, should raise the water for all boats and not be 1 where we're taking share.

Yes. And in relationship with the inertia, I think like, for example, the American Heart Association, the American College of Cardiology and other important associations realize the inertia. So they specifically changed the guidelines. And for right now, for example, for secondary ASCVD, they actually said the vast majority of that secondary ASCVD should be less than 55. There's another patient population in there that could be less than 70.

But the vast majority of people with secondary ASCVD should be less than 55, which is consistent with what Europe and other countries do. And in the prepared remarks, I did say that we are not just advancing this with an approval and a launch in the U.S., but we're under regulatory sort of discussions and review with the European Union as well as China.

And to add to the comments that Rob and Dean have made -- what we've seen thus far is extremely strong feedback from key scientific leaders, understanding the change in the guidelines, understanding what this product can do to help patients.

What we need to do is to translate that to the primary care setting. So that will take some time for us to do so. But our sales teams will be focused on ensuring the right education to the primary care setting as well as to patients on the importance of this medicine.

Your next question comes from Mohit Bansal with Wells Fargo.

I have a question regarding the flue drug program, CD38. Can you talk a little bit about what -- like what were the reasons why you decided to add 1 more seasonal northern hemisphere here. And I think the big question here is that was this decision based on any data you have seen? Or is it was just to satisfy with regulatory components rather than any confidence or lack of confidence in the data so far?

Thank you very much for that question. So just to highlight, this is a first-in-class once-per-season strain agnostic antiviral that we're doing for the prevention of flu, especially for those people who are at high risk. What we have said all along is that we plan to launch in 2029 and that, at the same time, I needed to do CMC work in relationship to getting it from 3 shots to 2 shots.

And so that's the rate-limiting step. I also said that between now and that time, I would do everything to have the most robust label and the robust packages that would allow us to have a broader footprint of sites to support a global registration and allow me to get the right value proposition in ex-U.S. markets, especially something that we have to think in the day and age of MFN.

We've also added key secondary endpoint, which is all caused hospitalization, which I think will be critical in that pursuit. And finally, we're collecting data on subgroups and diverse circulating viral strains throughout the world as we do this. I was also very clear that I did not need and would not take an interim. I did not take or saw an interim. I am going to maximize what this molecule can do in the time frame that I need to such that I do nothing to imperil the launch timing of 2029, but that have the most robust label as well as robust real-world evidence that will be important for health authorities.

Maybe just to summarize all that, there's no change in our confidence nothing we've seen in data. This is all about strength of filing given the fact that we have the time because we do have to do the bridging study that Dean mentioned.

Our next question comes from Evan Seigerman with BMO Capital Markets.

Kind of a key theme from this call talked about the $70 billion a potential opportunity that you talked about over the next wave of products. What's the biggest risk to achieving this number? And conversely, which programs in the past 6 months have increased in your confidence?

Yes. Thanks for the question. I mean, obviously, I would say, if you look at where we have confidence from what we've seen, it's the fact that we're getting readouts faster than expected. When we talked about this back in January, we had highlighted sac-TMT as well as IDXD as not having readouts until we got until 2027. We've now seen positive readouts from both.

The Tuli has read out faster than we expected. -- everything is moving. So as we sit here today, my confidence is higher than it was in January because we are seeing meaningful derisking. As you recall, at that time, we said there were 10 programs that represented 70% of the $70 billion. And the fact that so many of those are already having positive data.

So we are clinically derisking them, and we're seeing good launches of those that are underway including an accelerated launch of LIPENDRA by several months. It's hard to frankly point anything I'm worried about. I'm actually feeling quite bullish across the board. Got to knock on wood because things are going well. But credit to our scientific team and the strength of the clinical studies we put in place. I feel very good about where we are.

thank your next question comes from Asad Haider with Goldman Sachs. .

Maybe for Dean, on the PD-1 VEGF bispecific program, just any updates on how the pace of that development is progressing and how you're thinking about any potential read across from Summit how many data coming up? And any update on where you are with potential combination trials with the PD-1 VEGF and your ADC assets?

And if I can just have a quick follow-up on TL1A, I know it's been discussed a lot already, but I just appreciate any context or color that you have on where you are with evaluating combination approaches, which is whether field and IBD seems to be moving towards, so how are you thinking about TL1A as a single agent in terms of its competitiveness versus these combo trials that J&J and Avia aggressively are pursuing?

Yes. In relationship to the PD-1 VEGF sort of story, the way that I think about it is there's a large body of data in relationship to where PD-1 is active, we ourselves have 44 and other people have others. So there's that. There's also a body of evidence of where VEGF is active as well. So you look at that overlap, and that's the place that you would go first.

The other sort of thing is that in some of those tumors, we have unique assets that can be combined and that we know are active. So we're going to focus our efforts on PD-1 VEGF in those 3 sort of then diagrams where we are uniquely able to move forward. We are very interested in following the Summit Akeso data. We think that that's important data for us to follow. But this is our sort of general strategy of PD-1 VEGF in relationship to PD-1, where VEGF is active and where we have unique assets that we know are active that could be combined.

In relationship to combination, you're exactly right. The whole immunology field is trying to think about how it can go to combinations. There has been lots of combinations in the past. T&F and IL-23, there are some evidence that, that would be important. So when we look at TL1A, we're looking to have 1 of the most effective, if not the most effective anti-cytokine, in whatever the indication we have -- but we think it's also very important to know that the safety profile is extremely clean, which then makes it possible to do combinations.

The combinations that you would do, for example, in IBD would be different than that of HS, which would be different than what you might do for rheumatoid arthritis. So for each 1 of those indications, we are looking at the profile of our TL1A and also asking what is the ideal combination for that indication.

Your next question comes from Luisa Hector with Berenberg.

It's another 1 on LIPFENDRA, please. Just the specific wording on the label, which talks about production, but then the cardiovascular outcomes trials have shown to be have shown that you get a reduction in LDL also leads to the reduction in events, specifically for monoclonal antibody PCSK9 inhibitors.

So just wanted to check whether that wording is a help or a hindrance as you speak to payers and as you go about your promotion? And then still on this CVOT topic. What is the timing of your LIPFENDRA CVOT? And can you comment on how you can ensure that drop in use of increasing for weight loss won't impact the result. Would you expect that to be balanced across arms if it does happen?

Yes. So let me answer that question. I need to be a little bit careful to talk about what the intention of the FDA of putting note that they put in the label. I think it's going to be extremely helpful. We believe that LIPFENDRA should be added on top of statins. So I think that's really important. We also know that the design principle, the design principles of LIPFENDRA, the agency understood was informed by the 2 antibodies out there.

So I think that it could be helpful from a commercial standpoint, but I think that was the way that we -- that the FDA and ours, the discussion was. I should emphasize that we do not have CLT right now, and we have an ongoing trial that will read out in 2029.

Great. Thank you, Louisa. We're going to end the call there. I know there's a pure call about to start. So thank you all for your time and attention this morning. We appreciate it. We look forward to catching up at your convenience.

Thank you. This does conclude today's conference. We thank you for your participation. At this time, you may disconnect your lines.

Welcome to the Merck & Company Inc. Rahway New Jersey USA. Investor Event following the 2026 International AIDS Conference. [Operator Instructions].

I would now like to turn the call over to Mr. Peter Dannenbaum, Senior Vice President, Investor Relations. Sir, you may begin.

Thank you, Amanda. Good morning, everyone, and thank you for joining us for Merck's HIV Investor Event following the 26th International AIDS Conference that took place in Rio de Janeiro, Brazil last week. Before we get started, I'd like to 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 U.S. Private Securities Litigation Reform Act of 1995. Such statements are made based on the current beliefs of our company's management and are subject to significant risks and uncertainties.

If for 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 & Company Incorporated 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 and our SEC filings are posted to the Investor Relations section of our company's website.

Joining me today are Dr. Eliav Barr, Senior Vice President and Chief Medical Officer; Dr. Liz Rhee, Vice President of Clinical Research for Infectious Diseases, and Brian Foard, Executive Vice President and President, Specialty Pharma and Infectious Diseases business unit.

Now moving to the agenda. Eliav will begin with an overview of the HIV landscape and our strategy. Liz will then discuss the data that was presented at AIDS2026 and Brian will finish by discussing the commercial opportunity associated with our portfolio before we then move to Q&A. During Q&A, we will be joined by Gregg Szabo, Head of our global HIV franchise.

With that, let me turn it over to Eliav.

Thank you, Peter. Good morning, everyone, and thank you for joining us today. We are meeting at an exciting time for our HIV development program. At AIDS 2026 we presented important updates across several programs that have a potential to improve outcomes for individuals living with or at risk of HIV infection. Most notably, we shared positive Phase III results from the ISLEND-1 and ISLEND-2 studies, evaluating once-weekly ISLatravir plus LENacapavir while continuing to advance our broader efforts in both treatment and prevention.

Now before discussing our strategy and the data presented at the AES conference, I wanted to step back and frame how we think about HIV today. For more than 4 decades, Merck has remained committed to HIV research innovation. Over that period, the HIV epidemic has transformed from a uniformly fatal disease into a chronic, manageable condition for many people around the world.

At the same time, we are far from ending the damage caused by this epidemic. Despite the availability of active anti-retroviral regimens and prophylaxis options, we are far from meeting the 2030 goals. Public health authorities have set some years ago.

Progress has slowed for many reasons. The most important of which are the known limitations of current HIV treatment and prevention regimens and the evolving nature of the epidemic. Now putting a real dent into the HIV epidemic will require a diverse set of highly efficacious treatment and prevention strategies that reduce the burden on people and practitioners and fit seamlessly into the fabric of the communities impacted by HIV.

Now many of the medical tools needed to further reduce the impact of the HIV epidemic are already within reach in our pipeline. We are focused on developing simple, easy-to-use pills that can be highly effective oral treatment and prevention regimens. Now we've made tremendous progress over the past year in our clinical development program. We now have a new approved daily treatment option, positive Phase III data supporting a potentially first once-weekly oral treatment regimen, continued advancement of another weekly oral program to provide more choice and ongoing Phase III development of a monthly oral PrEP pill. Today, we're excited to share with you our innovative weekly oral approach to treatment and monthly approach to prevention. With that, let me turn it over to Liz.

Thank you, Eliav. Good morning, everyone. I'm so pleased to be here this morning to share with you the data we presented at AIS 2026 across both of our weekly oral treatment programs. I'll begin with the Phase III results for islatravir lenacapavir and then discuss the Phase II data for islatravir ulonivirine and the path forward into Phase III. This slide highlights how dramatically HIV treatment has evolved over the past decade. It has progressed from the early days when complex regimens required as many as 16 pills per day or more than 5,800 pills per year to the modern single-tablet regimens that are taken daily. Today, we are evaluating the potential for once-weekly oral treatment, reducing the floor for pill burden from 365 tablets per year to just 52. The data we presented at ADS on our 2 weekly oral treatment programs that are given weekly support that next step in HIV treatment evolution.

We'll start with ISLEND-1, which is a global Phase III double-blinded study evaluating islatravir lenacapavir, once-weekly 2-drug combination given orally against the daily 3-drug treatment of bictegravir FTC TAF, studied in virologically suppressed adults. In this trial, a total of 607 participants were randomized 1:1 to each treatment group. The primary endpoint was HIV RNA greater than or equal to 50 copies per milliliter at week 48 by the FDA snapshot analysis. Secondary endpoints included rates of viral suppression, CD4 cell count changes and treatment discontinuations. Results for -- in ISLEND-1 for islatravir lenacapavir show that noninferior efficacy was achieved against the comparator bictegravir FTC TAF. The regimen demonstrated efficacy as well in terms of rates of viral suppression, which were above 90% through week 48. And importantly, there was no treatment-emergent resistance to either islatravir or lenacapavir in this trial.

These strong efficacy results support the potential for islatravir lenacapavir as the first complete once-weekly oral treatment regimen for HIV. In ISLEND-2, the second Phase III trial, we also evaluated islatravir and lenacapavir. But in this study, the design was open label and the comparator was a variety of daily oral treatment regimens. In this study, we enrolled 626 participants who are randomized to these 2 regimens. And similar to ISLEND-2, islatravir lenacapavir also demonstrated non-inferior efficacy. Rates of viral suppression as well in this study remained high at approximately 95%. Importantly, in ISLEND-2, because of the open-label study design, we had the opportunity to examine participant satisfaction with weekly oral treatment. Participants reported being more satisfied with islatravir and lenacapavir than with their standard of care therapies that they had come in on and as well found islatravir and lenacapavir to be less of a burden compared with daily orals.

We were very satisfied, and we are very pleased to see the satisfaction rates. In addition, safety across ISLEND-1 and ILand2 were consistent. islatravir lenacapavir was well tolerated with a safety profile comparable to bictegravir FTC TAF and standard of care regimens. There were no clinically meaningful changes in lymphocytes, CD4 counts or body weight that were observed, and there were no participants discontinued due to declines in CD4 or absolute lymphocyte counts. Taken together, these data support the potential for islatravir lenacapavir to become the first oral once-weekly oral single tablet regimen for the treatment of HIV. Across both Phase III studies, we observed high rates of viral suppression, no resistance signals and safety and tolerability comparable with the control arms. We look forward to submitting islatravir lenacapavir to global regulatory authorities and working to bring this innovative weekly option to appropriate people living with HIV as quickly as possible.

I'll now turn to our wholly owned investigational once-weekly oral treatment regimen containing islatravir and ulonivirine. As we've discussed in the past, the once-weekly 2-drug combination of islatravir and ulonivirine has the potential to be the smallest weekly pill approved with no loading dose and a favorable DDI profile. In addition, this is being evaluated not just in virologically suppressed but also in treatment-naive participants. At AIDS 2026, we presented data from the Phase IIb trial of islatravir and ulonivirine with week 24 results demonstrating that the combination maintained viral suppression and demonstrated efficacy comparable to continuing daily bictegravir FTC TAF. There were no participants on the islatravir ulonivirine group with an HIV RNA greater than or equal to 50 copies per ml and viral suppression rates were high at over 94% of participants remaining suppressed. Importantly, there were no treatment-emergent resistance cases detected. In the trial, islatravir ulonivirine was generally well tolerated. There were no new safety concerns identified. In addition, the adverse event profile was comparable to bictegravir FTC TAF, and we observed no meaningful effect on lymphocyte counts or CD4 counts. Based on these results, we plan to advance islatravir line into a comprehensive Phase III program. The SYMPHORIA studies will evaluate this combination in both virologically suppressed adults switching from daily therapy and in adults with HIV without prior treatment experience. The Phase III trials in virologically suppressed adults SYMPHORIA #1 and #2 are anticipated to open in the first half of 2027. SYMPHORIA #3, the study in treatment-naive participants is a Phase II/III trial. The Phase II component has been completely enrolled, and we anticipate results in the first half of 2027. With that, I'll turn it over to Brian.

Thank you so much, Liz. And good morning to everyone. I'd like to first start off by saying that it is particularly exciting to join a company with such a rich history over 4 decades and enduring commitment to HIV. I'm energized by the science, the innovation and the possibility of helping provide new options for HIV prevention and treatment. Now as you heard from Eliav's, continued progress against the HIV epidemic will require a diverse set of prevention and treatment strategies. The HIV landscape is also continuing to evolve. People with HIV are aging. Roughly 1/3 of people living with HIV have comorbidities today and the need to manage multiple different therapies for comorbidities is likely to increase. While the existing antiretroviral medicines are generally safe and effective, certain classes also can impact renal, bone and other areas of health differently, further highlighting the need for multiple treatment options with different mechanisms.

And for the majority of people living with HIV who choose daily oral treatment options, despite the important progress that has been made, the daily pill burden remains. Daily dosing can contribute to treatment fatigue and stress as well as concerns about inherent HIV status disclosure. In prevention, opportunity remains to reach more people who could benefit from HIV PrEP. Starting and remaining on PrEP can be complex and many people who could benefit from prevention remain unreached. We are advancing a series of potential options designed to address these evolving needs. Idvynso, our newly approved once-daily oral treatment, marks the beginning of a broader portfolio strategy. Idvynso is the first and only non-INSTI, tenofovir-free once-daily complete 2-drug regimen to demonstrate non-inferior efficacy in a head-to-head Phase III trial versus 3-drug regimen, BF/TAF. Idvynso provides people living with HIV an important new option when looking for switch therapy.

The key drivers of switch include tolerability, desire for simplification from multiple tablet regimens to 2-drug single-tablet regimens, comorbidities and drug-drug interaction considerations. We're pleased with the launch progress so far, including the early access announcements and look forward to access ramping up over time. Beyond Idvynso, we are preparing to bring forward weekly oral treatment options and looking ahead to our entry into PrEP, where we are aiming to launch the first monthly tablets. I will address each of these opportunities in turn. We are particularly excited about the potential for ISL/LEN to be the first once-weekly oral treatment option. The need for additional treatment options remains clear as many people living with HIV continue to experience challenges related to daily dosing fatigue, stigma and the practical constraints of injectable therapies. Weekly oral therapy offers a less frequent dosing approach that aligns with preferences frequently expressed by people living with HIV.

In collaboration with Gilead, we look forward to sharing the positive results from ISLEND-1 and ISLEND-2 with regulatory authorities with the goal of bringing ISL/LEN to adults living with virologically suppressed HIV as quickly as possible. One of the strengths of this opportunity is that it combines what we believe is a highly differentiated product profile with the capabilities of 2 global organizations with a shared commitment to advancing innovation for people living with HIV. From a launch perspective, planning is already well underway. The collaboration structure allows both organizations to prepare for commercialization while coordinating around a shared global strategy. For the long-acting oral program, Gilead will lead commercialization in the United States and Merck will lead outside of the U.S. Finally, I'd like to briefly touch on Alimatravir, our investigational monthly oral PrEP.

This differentiated approach offers the potential for discrete monthly dosing and a rapid onset of protection predicted within 1 hour. Alimatravir is a molecule developed specifically for prevention. The Expressive 10 and 11 trials are anticipated to read out in 2027. Recently, we announced initial plans intended to support rapid, broad and sustainable access to Alimatravir in low- and middle-income countries should it ultimately be approved. Those plans include voluntary licensing agreements covering more than 129 countries, support for regional manufacturing capabilities and investments intended to facilitate timely access following approval. We believe innovation has the greatest impact when it reaches the people who need it most, and this announcement reflects our long-standing commitment to HIV and global access.

Now stepping back, we believe the combination of Idvynso, ISL/LEN, islatravir/ulonivirine and alimatravir creates a meaningful long-term opportunity. We see an opportunity of greater than $5 billion on a non-risk-adjusted basis by the mid-2030s. These programs reflect a long-term commitment to advancing HIV science and a vision for a future in which prevention and treatment are increasingly simple, accessible and fit seamlessly into the fabric of the communities impacted by HIV. And with that, I'll hand the call back over to Peter.

Thank you, Brian. Amanda. We're now ready to begin the question-and-answer portion of the call. Before we get started, I'd like to request that today's questions remain focused on our HIV treatment and prevention programs.

[Operator Instructions]. Our first question comes from Trung Huynh with RBC.

So just 2 questions from outside. The ISLEND-2 CD4 data that showed continuing -- continually gradual decline of the ISL/LEN arm versus Biktarvy over 48 weeks, even though both arms ended at equivalent levels. ISLEND-1 and the ISO Ulu Phase IIb, they were both modestly better than Biktarvy on this metric, which helps contextualize. But how are you interpreting the ISLEND-2 curve divergence? Is that a baseline imbalance artifact? the class signal you're monitoring or something that you believe will fully resolve at 96 weeks? And how does FDA engage with this in the context of labeling discussions?

And then second question, just can you walk us through the ISO/ULO SYMPHORIA Phase III program in the treatment experience patients specifically design experience patients specifically design, enrollment time line, any expected readout -- and relatedly, what does the 48-week secondary endpoints and treatment-naive Phase II/III data need to show for you to be confident in an NDA path towards that 2030 approval target?

Thanks for the questions. This is Eliav Barr and I'll moderate, but I'll take the first one and then Liz can take the second one. With respect to the CD4 counts in ISLEND-2, there was a small statistical difference in change in baseline CD4 T cell can at the week 48 time point. But we didn't consider it to be clinically meaningful for a variety of reasons. First, as you noted, none of this was seen in ISLEND-1 nor in the Phase II ULO studies.

There was a baseline imbalance as you also noted, the CD4 T cell comp was higher in the ISLEND group compared to standard of care at baseline and the changes were greater in those -- the changes that we observed in terms of CD4 cons were greater in those with the highest baseline counts. So we think that it's probably a regression to the mean. And we looked at a variety of different other factors in the studies, including the percent changes in baseline CD4 T cell counts and discontinuations and other metrics that both Gilead and Merck together assessed from the perspective of changes in CD4 counts. None of these were any -- were statistically significant.

And so bottom line is that we don't see this as being at all clinically meaningful. We don't anticipate this to be a problem with this drug or any islatravir containing regimen going forward.

And in terms of the SYMPHORIA trials, let me turn it over to Liz.

Sure. Thanks, Eliav. So for the Velogica suppressed indicationlogical, we are planning 2 studies, as I've indicated earlier, SYMPHORIA-1 and SYMPHORIA-2. Both of these studies in terms of primary endpoints will follow FDA guidance. with the primary endpoint being those with viral load greater than or equal to 50 analyzed by the FDA snapshot. We would also be looking carefully at safety, of course, in these studies. And I think with SYMPHORIA #1, which is an open-label study, we would have opportunity as well here to collect PRO or patient-reported outcomes such as satisfaction as we had done in other weekly trials. At this point, we are anticipating starting studies in the first half of next year. The details of the secondary endpoints and time lines of the trials, we don't really have ready to share at this point in time, but we will share them in the future when they are ready.

We are in the process of sharing our plans and discussing with the FDA.

Just to be clear, I think the SYMPHORIA studies are going to be a very important addition of the Q week regimen. Just to remind everyone, we'll have both treatment experienced and treatment-naive patients. This is something we heard loud and clear at the HIV meetings, a lot of interest in starting people right on QWek to really help them in that period of time when they're still grappling with the fact that they're HIV positive. So we're really looking forward to starting those studies, and we'll let you know about the time lines when we're more set with them.

And one type of regimen is not going to fit all, so one size does not fit all. In addition, as people living with HIV age and deal with comorbidities, there is particular concern on effects, for example, on cardiometabolic factors, on weight that can lead to people needing to switch due to tolerability issues as well as drug-drug interactions as people are taking more medicines for their comorbidities. So Elliot, to your point, we hear loud and clear from providers and also patients themselves, people living with HIV that they want more options and that integrase is not going to solve every problem for them.

Our next question comes from Evan Seigerman with BMO Capital Markets.

Malcolm on for Evan. So you framed a $5 billion non-risk-adjusted opportunity in the mid-2030s from new and potential HIV launches. I know that this reflects Merck's share of collaboration revenues. Can help us think about the relative contribution of treatment versus PrEP within that $5 billion target?

Thanks for the question. I'll ask Brian and Gregg to address.

Yes. Thank you so much, Eliav. And I think it's a really great question. And just as we're talking about today, think about it overall, first and foremost. We're talking about four potential therapies, one is approved in the marketplace today with IDVYNSO and then three additional potential options for those living with HIV or looking for PrEP. And so we framed it first and foremost in the treatment category. The treatment category today in 2025 is about $26 billion. We're expecting that to continue to grow to more like $32 billion by the mid-2030s.

We're also expecting the PrEP market space today, which is a much smaller market space. It's about $4 billion today. We expect that to more than double over time, and we see this as a significant and meaningful reason for us to be in this space with these potential therapies. So maybe, Gregg, if you want to give a little bit more detail to it.

Thank you, Brian. I would really start by mentioning the very positive reception that we had at the Congress last week for our data and for our portfolio. We had a strong positive reaction across scientific leaders, prescribers and advocates, and it really gives us growing confidence in our potential to achieve that greater than $5 billion revenue by the mid-2030s. I think that as Brian laid out, we've got several options, and each of these programs is well differentiated and I think brings significant value to the space.

In talking about the treatment market, which is the larger market, we do see evolution today, and we expect it to continue into the future towards two-drug regimens and also towards long-acting regimens. Ultimately, we expect long-acting regimens to represent a solid majority of patients by the mid-2030s, and we feel the two weekly orals will have a strong place within that segment. Each of these assets, including alimatravir in the PrEP space, will be contributors to that overall $5 billion number. And I think alimatravir just has such an exciting profile with rapid onset once monthly discrete oral dosing, and we believe that also will be an important option within the PrEP space.

Our next question comes from Alex Hammond with Wolfe Research.

Can you kind of walk us through how we think about alimatravir in the context of the PrEP market that's actively organizing around injectables? Who the target patient population is, how you're thinking about that window before you as an amplitude establish those deep prescriber and infrastructure relationships? What the access and pricing strategy might also look like in both the high-income and high burden markets?

Thanks for that question. Let me start by saying that for the PrEP market, what we've heard very loud and clear is the need to have regimens that are seamlessly integrated into communities that require minimal medical intervention, that enable patients to have access in various locations, that don't require the need for advanced care. And with all of that in mind, we think that an oral monthly would be very, very useful indeed. In fact, if I have to say what was just a wow moment for everyone at the AIDS meeting was alimatravir. We could not get away from anyone who wanted to say something about alimatravir, to think about alimatravir as part of their treatment regimens and so on. Maybe I'll turn it over to Gregg to talk a little bit about his impressions.

Thanks, Eliav. I would start by saying that despite the availability of a number of highly effective PrEP alternatives today, either daily orals or injectables, we still see many new infections, and we still see that a relatively small percentage of people who can benefit from PrEP are actually taking it regularly, certainly less than half the people in the United States and less than one in five globally. And there could be a number of reasons for this. Some of them are just low perception of risk on the part of the patient or low awareness of PrEP, but there's also a number that are potentially mediated by the drug profile itself, and these include things like concerns about side effects or tolerability, the stigma that's associated with using PrEP and also suboptimal ease of implementation and accessibility within the health care system.

So we feel very confident in an oral once-monthly pill. We believe this is something that's easy to access and that it doesn't require HCP administration. The fast onset of action, that was something that got a lot of favorable feedback at the conference last week. Current options often take days to be effective. We believe that alimatravir can be effective within an hour. It also has a favorable DDI profile, which can be really important within this population. And with regards to stigma, this is something that can be very discretely taken or stored to really protect the user's privacy and avoid stigma. So ultimately, we feel like this opens up new models of implementation to increase the number of people using PrEP, and we also feel it has a very strong value proposition relative to all the other options that will be available.

Maybe just a couple of extra points here. While it's too early to really specifically speak about the access strategy as it relates to that, we do think that it does have a compelling value proposition and key differentiation, which should assist in gaining access.

We're also, too, and I want to make this point because I think it's an important one. We're encouraged by the SCOTUS ruling for the USPSTF that was important for individuals to access PrEP with no out-of-pocket cost and has implications for all preventative and services and medicines. And so the environment is set up for innovation, and so we're excited about potentially bringing that innovation.

Our next question comes from Geoff Meacham with Citibank.

Another one on the weekly oral. I just want to get some perspective on the PK/PD. Do you have residual drug extending beyond a week? I'm just thinking about real-world compliance and the risk of resistance. And then commercially, would you view this as a switch opportunity at the onset? Or is it more upstream to perhaps newly diagnosed patients?

So let me ask Liz to talk a little bit about PK/PD and the forgiveness that's already in the -- in our 2-week regimen. And then I'll ask Brian and Gregg to talk about the commercial potential. Liz?

Right. So for both of the oral weekly regimens, islatravir, lenacapavir as well as islatravir, ulonivirine, the doses were selected to enable a window for forgiveness of about 7 days. And this is to take into account the fact that people may forget to take their dose on a certain day, they need a window to catch up essentially. So that week of forgiveness means that if you forget your dose on a Monday, you have a week to get back on, and then if there -- if that window is exceeded for each of these programs, we have thought really carefully about how people would need to then restart the regimen. So this has been factored into the development program in the Phase III studies. So from that perspective, we feel that there will be very clear instructions for participants on what to do if they do miss a dose and outside of that forgiveness window.

And indeed, in the Phase III trials, compliance was extraordinarily high and a lot of satisfaction around the use of q-week and subcu. But maybe I'll ask Brian and Gregg to talk about the other piece.

Maybe just at a really high level, and then I'll pass it over to Gregg for a bit more details. We know, again, in the treatment space, as I mentioned before, this is one of the biggest areas today, and we anticipate it will continue to grow. And just as Liz nicely said, we believe it's because individuals like options, and this is really important to continue to bring options. I know you didn't necessarily specify which weekly option, but it's exciting to be bringing two, to be quite frank. And so maybe Gregg can give a bit more details about the two opportunities as we see it.

Yes. Thanks, Brian. And I think you're right. I mean options are important. Obviously, if you look at the daily market, there's been continued innovation there that ultimately has led to more and more satisfaction for patients as time has developed, and we think the same thing can happen with long-acting therapies as well. If I start with isl-len, again, I think there was a great reaction at the Congress last week. This has the potential to be the first weekly oral regimen to market. There's really strong patient interest and it's highly differentiated. And I want to double down a bit on the patient interest because I think this is something that is really important from the perspective of the long-acting oral regimen. It has the potential to address pill fatigue. This is an important issue for people living with HIV. And also the potential to address what can be injection fatigue. I mean any -- this is designed ultimately for people who want more freedom that they can get with less frequent dosing, but not be tied to a physician visit for administration.

So obviously, we're excited about isl-len because it brings together two highly potent agents that have the potential to maintain the viral suppression and do it with reduced dosing frequency. But then if we move to isl-ulo this is also a highly effective program based on our Phase II data so far, effective with a small two-drug tablet. This has the potential to be the first weekly regimen that will address treatment-naive patients. As Eliav mentioned earlier, this could be an important opportunity to really start people, especially when they're undergoing reaction to being diagnosed with HIV.

Also importantly, there's no loading dose associated with isl-ulo. As I mentioned, the small pill and it has a favorable DDI profile, so we believe that the unmet needs and the desire to switch to easy oral dosing for once weekly will persist beyond the launch of islatravir and lenacapavir, and we see isl-ulo continuing to expand that market category. And over time, we feel the biggest opportunity is really moving people from daily to weekly, supported by a portfolio of differentiated options.

Our next question comes from Vamil Divan with Guggenheim Securities.

So maybe two follow-ups on one, just on the comments you were just making around isl-len versus ulo, so I appreciate some what you said there on the benefits of ulo, may provide in terms of no loading dose molecule paired with DDIs. How about the other way around, if both of them are available, what would be the benefits of isl-len other than maybe getting to the market first? And then the second, you spoke previously around the $5 billion commercial opportunity and the sort of breakdown between PrEP versus treatment, I'm curious if you can give any sort of similar breakdown on how you see the U.S. versus the ex U.S. contribution to that greater than $5 billion number.

Thanks so much, Valim. Let me take the first, and then we can talk about the commercial elements. So it's exciting to have islatravir, lenacapavir as the first drug because lenacapavir's safety profile and efficacy profile are well known and understood. They're part of a lot of -- lenacapavir is part of a lot of regimens, and so we have here a new class of drug that has a strong and well-defined efficacy safety profile. And people are aware of the drug-drug interactions that one needs to keep in mind.

So islatravir and lenacapavir, I think, will be an excellent first option and a continued option over the course of the years along with islatravir and ulonivirine. So if I could switch to Gregg.

Thanks, Eliav. I would just say that this product, these products are highly differentiated, and I think they're going to have a big impact in that regard outside the U.S. as well as in the U.S. We're not specifically breaking down the opportunity across geographies at this point in time. But I would say one could imagine something similar to the breakdown in the current market for HIV.

One last point that I'd make about that, too, is we get this question commonly about these two assets. I think one is important. The first asset actually comes with the power of two organizations that have been in this space for a long time. But we think about that space, the long-acting is really where the growth is going to be in the future. And so we believe that marketplace is going to be largely dominated by the long-acting therapies, and so while we don't -- we're excited about bringing two therapies, we're not necessarily thinking about one versus the other. We think the space is going to have options, and we think a lot of the growth is going to be there for the longer-acting treatment versus PrEP.

Our next question comes from Chris Schott with JPMorgan.

Just coming back to the role of your initial weekly islatravir-len. Can you just elaborate a little bit more in terms of the role that can play in the treatment experience market? I guess specifically, what percent of the market do you think this can address? And when you think about switches, how quickly can ramp as we think about that commercial opportunity?

And then my second question is just given some of your peers are pursuing injectables in both PrEP and treatment. Is this an area Merck is looking to explore as you just mentioned the market is bifurcating less options, like is there an opportunity to take these assets into longer treatment regimens?

So let me take the second one first, and then I'll turn it over to Brian and Gregg. Of course, we're looking at all different options, and we have a robust discovery pipeline. The past few years at Merck, we really focused on simplification. And if you think about LIPFENDRA for example, as a simplification option compared with injectables and then you apply that to the HIV space, it's the reason why we spent a lot of time thinking about easy to administer long-acting orals that will ultimately make it just much less complicated to get patients their medicines with reasonable access. So that's where we are right now. But of course, we're looking at all manner of opportunities to provide both treatment and prevention. We'll look at that in our discovery pipeline, and we'll be able to share some of that as the drugs progress into later development. So Brian, Gregg?

1

Maybe I'll start and then, Gregg, if you want to add anything additional to it. I think first and foremost, the market today, the treatment market today is largely daily therapies. I mean, so we believe the longer-acting therapies are going to play an important part, as I just mentioned a moment ago. And number two, as you look at today from a switch standpoint, about one in five people living with HIV switch annually for a variety of reasons, tolerability, long-term toxicities concerns, comorbidities, as we've mentioned before, and desires for simpler regimens. And so we believe, again, for a variety of reasons, it will create a significant opportunity there. But I don't know, Gregg, if there's any additional points you want to make?

Yes. I would just reinforce again that we do see current evolution in the market, both within and away from, I guess, the daily class. So within the daily class towards two-drug regimens and then towards two-drug long-acting regimens. We do expect that to continue. And as mentioned earlier, we really expect the long-acting regimen to ultimately represent the solid majority of people within the market. Within that, we could -- we see a solid place for the q-weeklies. We could see that ultimately getting to about -- overall, about 1/3 of the overall treatment market. And I would just reiterate the strong patient preference. And I think that will also help with the initial ramp is there is a strong patient-driven aspect to these long-acting oral therapies. There are people that want to get away from that daily pill and want to also may not be right for injectable treatment. So we do feel that progress will be substantial in this space.

Our next question comes from Daina Graybosch with Leerink Partners.

Two on alimatravir, I hope I said that correctly, wonder if you could talk about a weekly monthly prep versus a weekly oral prep, why monthly might be better or differentiated from weekly? And then a second question, you talked about the hours onset. Is that something you can measure as an outcome? And will you measure it in many of your registration trials so that gets on label? And does that matter for that differentiation to really get out there and be used by clinicians in the community?

Thanks. I'll ask Liz to comment on the clinical trials program. In terms of weekly prep versus monthly, the ideal for people who are in a prevention mode, right, this is not infected individuals, is to have as little as possible need to do anything really to get protected. So just as much as -- as little as you go and go somewhere to get an injection, you want to just get it and be done with it. So I think that the longer the interval on the oral, the better in that circumstance. The other piece of that is with regard to the second question that I'll turn it over to Liz to talk about is I don't want to think about it and plan ahead because it's Saturday night, et cetera, et cetera. So being able to have your PrEP available and effective within an hour is consistent with what life is really like. And Liz, do you want to talk a little bit about the PK.

Right. So actually, at CROI earlier this year, we presented PK data for alimatravir and justification for the 11-milligram monthly dose that was selected. And as part of the dose selection process, we looked carefully at the PK and at the onset when we expect drug levels to be at above the threshold that we expect to be efficacious. So the 11-milligram dose has this baked in where you'd expect levels to be protective within 1 hour. There's no need for a loading dose. There's no need for a higher dose to start with. I think the dosing regimen itself is quite simple because of these PK attributes. In terms of the label, I mean, the PK section of the label will include all of this data. We are collecting PK data in the Phase III program, and we'll be able to report that out.

And I would add that there's been a lot of interest in this PEP study, post-exposure prophylaxis program, and we are taking that under advisement. Maybe I'll turn it over to Gregg for the commercial side.

Yes. And maybe just one last comment that I would make that one of the key things for PrEP is avoiding the stigma associated with taking PrEP and having a longer option such as a monthly and an oral option where you're not having to have frequent trips to the physician to have that administered, this can be very helpful. So a monthly versus a weekly, for example, just gives you less opportunities from being observed, taking the product. It gives less opportunities for somebody finding stored products. So it allows for a lot more discretion that can really help to protect the users' privacy. And we think this will ultimately be something that's very important within the community.

Our next question comes from Carter Gould with Cantor Fitzgerald.

I want to come back to alimatravir. As you think about the bar for efficacy here, I recognize the studies are against DF/TAF, but the cross-trial comparisons are pretty straightforward and PURPOSE 1 and 2 set a pretty high numerical bar there. In light of all your commentary around the differentiating features, does Merck sort of address this with potentially some more leniency on efficacy in terms of the bar they might be held to? Or from a clinical and regulatory perspective, is it going to be critical they match that sort of very high 90s sort of bar we saw in PURPOSE 1 and 2?

Yes. The standard that is applied for all of the prep drugs are the same with -- in terms of regulatory agencies, and so our expectation is that this will need to have the same kind of efficacy that would meet those statistical criteria.

Our next question comes from Jason Gerberry with Bank of America.

Just two follow-ups. You mentioned potentially the ability to get 1/3 share in the treatment market with islatravir-len. What is your assumption regarding ability to take share from injectables? Do you view the injectable space as sort of a separate segment that's harder to claw away share? And is the assumption mainly that it's an oral switch? And then just as a follow-up, any updates? I mean last time you did this call about a year ago, you talked about your injectable options being early stage, but when do you think we could be in a position to potentially get an update on the efforts Merck has with its injectable offerings?

I'll take the second one first. We're still looking on a variety of injectable options. You see that there's a lot out there, so we don't want to have just something that would be "me too." It would have to be differentiating, and we're working on that. In terms of the commercial elements, Brian, Gregg?

Yes. I'll first start off by saying one of the things that we reiterated a bit earlier is that we feel like in the treatment marketplace, you're going to see the marketplace continue to move to the longer-acting therapies, the weekly therapies. And we're really excited about that today. It's largely daily therapies if you think about where the market is today. So we see the marketplace going to continue to grow, and we think it's going to be growing primarily because of these longer-acting therapies. But Gregg, maybe a bit more specifics.

Yes. I just want to address. I think what we had mentioned earlier around 1/3 was for weekly options, not specifically for isl-len, so I do just want to correct that comment that was made. And I think your other question was, do we see it as primarily coming from dailies versus injectables. I think the value proposition is there for either. But as Brian has mentioned, the market is still today and expected to be next year is still dominated by daily, so I think the pool in which we're operating is likely to be much higher on the dailies side.

Our next question comes from Michael Yee with UBS.

Maybe two questions here. On the weekly treatment option with Gilead, can you just talk a little bit about the economics there and how you think about a profit share there given that the partner already has wholly owned rights on the standard of care and complications of a partnership there in that context and how that works? And then a second question on the monthly prep, which sounds very exciting. Can you talk about the window and margin there for retreatment and compliance there? I know you said fast onset of action, so perhaps there's definitely room just because of the fast onset, but how that works there with the monthly pill on the PK if you miss a dose.

Thanks so much. Liz, could you comment on the forgiveness of the q-monthly? And then I'll ask Brian and Gregg to talk about the economics.

Yes. Thanks, Eliav. And actually, this was also addressed in the data we presented at CROI earlier this year that I've mentioned before about alimatravir. So the 11-milligram dose allows for approximately a week of forgiveness in case the dose is missed.

Thanks. And Brian, Gregg?

Yes. So across the programs that we have with Gilead, Gilead and Merck will share global development and commercialization costs, 60-40, respectively. And then for the long-acting orals, as we said, Gilead will lead commercialization in the U.S., Merck will lead commercialization ex U.S. and Merck and Gilead will share global product revenues 50-50 up to around $2 billion, or up to $2 billion and then 65% Gilead, 35% Merck thereafter.

Perhaps I can just add to that we've had a very productive partnership with Gilead. And I would start with what is the most important point, which is that working together, Merck and Gilead is allowing us to provide a new and important option for people living with HIV. In fact, this is the only way or the way that we could get to the market the fastest with something that will be highly desired by the community. And so ultimately, we've worked well so far, certainly in developing the launch strategy. We're beginning to move into execution. We've established appropriate governance for all the key decisions. We believe it's working well, and I think both companies are firmly committed to establishing the oral weekly category. And isl-len, as we've noted, has the strong potential to be the first option.

Great. Amanda, I know it's a busy morning for most. So we'll take time one more question please.

Our last question comes from Louise Chen with Scotiabank.

I wanted to ask you if you think you have what you need for a full product offering to HIV patients in both your commercial and pipeline products? Or are there other areas that you think will be important for you to be involved in?

So maybe I'll start with the future. Look, I think everyone is looking for new therapeutic classes. This is a disease that people have to grapple with today for 50 -- up to 50 years, and so there are always going to be important enhancements that will need to be made. There's a lot of desire for functional cure. We're working on a lot of those elements, and I think we've got a very unique set of discovery assets and also capabilities given our interest in immuno-oncology and immunology in general to think about how we might address that. But these are our long-term plans. I'll turn it over to the -- to Brian and to Gregg to talk about the commercial element.

I think it's a fantastic question. I think, and I'll pass it to Gregg here in just a minute, I think the key thing for us is to do as we've continued to do for many, many years now is to continue to collaborate with the community and make sure that we understand exactly what it is that they need. And so I think from that, we'll continue to work tirelessly, I think, to develop innovation -- innovative options for the community. Gregg, anything else?

I would maybe just say that we already have, I think, a very clearly defined and well-sequenced portfolio strategy. Each of these assets is really designed to address distinct unmet needs. Each of these assets has meaningful scientific differentiation, and we're putting around that. We've undertaken extensive internal and external benchmarking to make sure that we have the resources, the capabilities, the investment levels that are aligned with the competitive dynamics of the field to make sure that we can be confident in our ability to allow us to compete, and we're confident that we can invest at that level. So I think this begins with IDVYNSO. We're already out there in the marketplace across medical affairs, market access, commercial function, actively engaging with stakeholders, leveraging our long-standing relationships. And so far, the progress has been good, and the reception has been very positive.

Excellent. Well, thank you, Louise, and thank you all for your interest and time this morning. Please reach out to the IR team for any immediate follow-ups, and we look forward to speaking with you tomorrow. Thank you.

Thank you. That concludes today's conference. Thank you for participating. You may disconnect at this time.

All right. We're just about at time. So let's keep moving with our next session with Merck. I'm very excited to have Rob Davis, CEO; and Dean Li, EVP Research Labs. Thank you both for being with us today.

Rob, maybe before we begin, I want to just give you the opportunity to level set us, big picture, on how things are going, sort of, midpoint of the year, how are things tracking towards the derisking of the commercial targets that you said that you'd achieve at least half of by the end of this year. So high-level comments on...

Yes. No, happy to do it. Well, one, thank you for having us. Good afternoon, everyone. If you look at where we're at, it's already been a very eventful year for us so far. And I would say our transformation is well underway.

If you look at the readouts we've had, it's pretty much hitting every area of our portfolio, whether it's Oncology, some important readouts coming from ASCO. HIV, news came out yesterday of our approval of islatravir plus lenacapavir. Ophthalmology, things are moving. Across the board, we feel very good about what's happening in the pipeline. And as I think about proof points, you're starting to see them and they're accelerating, and that's very important.

We're well on track to our goal. You mentioned the 50% of the $70 billion by the end of this year. We're actually ahead of schedule. You saw we had important readouts for sac-TMT, I-DXd, actually about a year ahead of what we thought. So as I sit here today, whether it's that, what we're doing with business development, bringing in Terns, which is another important asset. Our Animal Health business continues to do incredibly well, growing strongly on a new product portfolio strategy, very similar to the Human Health business.

Across all those fronts, what I'm probably most pleased about is it feels like people are starting to dig in and get a real sense and confidence in the breadth and depth of our portfolio and more there, but the fact that you're starting to see investors start to appreciate that, makes me very happy.

And I would just close by saying, as I think about where we sit today, my confidence that we are positioned for good growth coming out of the LOE is as high as it's ever been. It was already high. It just gets better. We're going to keep doing what we're doing. We're never satisfied, but we're operating now from a position of strength, and I think that's probably most important. And credit to Dean, to our MRL colleagues, how they've transformed the pipeline in the last 4 years is frankly quite amazing.

And there's a lot to talk about the pipeline transformation, which we're going to get to. But maybe before we do that, Rob, I just want to stick big picture for a bit. You touched on this briefly, BD, and I apologize in advance for asking you this question again because you've been asked in so many different ways. But I think everyone is always interested in hearing about your latest framing on the M&A lever. Just given the confidence that you're expressing on the pillars that you've already put in place for the transformation of this company that now seem well underway. So what are the gaps that are left to fill? Level set us on size, TAs, et cetera?

Yes. If I was going to summarize it, I would say we are going to continue to execute the exact strategy we've been doing over the last 4.5 or 5 years. And it starts with always asking the question, where is there important science that is happening, addressing an unmet need? Where we see that, we look at the portfolio and we try to think strategically about the portfolio.

And as I think about your question of where we are, I don't know if I see gaps at the moment, I see opportunities. Where I would see further opportunities, oncology. We want and intend to be a leader in broad-based oncology. And I think we now have the portfolio to do that. And we have strength to leverage by adding to it. So we'll continue to focus on oncology. Cardiometabolic is a space we're interested in. Immunology is a place where we're interested in. But we're going to continue to do that. And as you think about it, where we see the science aligned with our portfolio and if we can see value, we will move. We have been operating under a one pipeline strategy since Dean and I really came into our roles. And that means we want to bring in the best, whether it's internal or external.

So this isn't -- we're not doing business development to fill a gap to -- and so there's never a finish. It is just part of an ongoing strategy of how we develop a sustainable growth model that is going to take us not into 2030, not into 2035, but 2040 and beyond. And that's why from a size perspective, that $1 billion to $15 billion, which has been the sweet spot we've been operating in, that continues to be where we operate. We've said consistently that we would go bigger, but it has to be something where we see an important scientific opportunity and we have to see value creation. And obviously, the bar as you go bigger gets harder because it reduces your opportunities to do other things.

So that sweet spot, $1 billion to $15 billion is where we'll continue to focus. You look at what we've done, Verona, Cidara, Terns, those are the type of deals. I think you should continue to expect to see more of that.

Excellent. So before we kind of start drilling into some of the science, with Dean. On one more high-level question, Rob, that we're actually asking all of our management teams is -- and that's on the external environment and the operating external environment for the industry. You've got the midterms coming up. You've got some regulatory uncertainty with FDA leadership vacuum. You've got attempts to codify MFN that's set to expire in about 3 years. So what are you paying the most close attention to? Where are the banana peels that you could run into either on the drug pricing side or on the MFN side or anything else that we should be aware of?

If I look at where the FDA is and what's happening, I would start by saying we need a steady, stable, predictable FDA. That's very important. If you look back over the last couple of years where they've been focused, I do think they were making moves in the right direction, and I hope they continue under whoever comes in now to take over. And that's around how do we move better into the Phase I first-in-human studies. The question always is, why are we looking? Why do so many companies go to China, as an example. Well, it's because you can go faster and cheaper. So why don't we try to make the U.S. [Audio Gap] by addressing and simplifying our Phase I clinical processes that [Audio Gap] we want to see that focus. We want to continue to see a focus on AI. So those are the things we are promoting from an FDA perspective.

From a macro perspective, the push to try to continue to get reforms around PBM insurance, now 340B, I still believe that if you look at total drug spend, it's only 15% of the total on the innovative drugs. 90% of all drugs prescribed are generic. Generic prices in the United States are the lowest in the world. So that is a highly efficient model. So why not focus where the real challenge is, it is the $0.50 that goes into the middle. Why do we lose $0.50 of every dollar when you're not a part of the development, not taking any of the risk, not having to manufacture. We need to address that macro system.

And as an industry, both as Merck and now as Chairman of PhRMA for this year, that's where I'm pushing. How do we continue to work with the administration and with Congress to address those fundamental infrastructure issues but -- that I think are real opportunity. So if we can continue to drive for stability and predictability in the FDA, focus on making our system more efficient and address some of these macro challenges, we're positioned to be the world leader for a long time, but we need to make those moves to do it, and that's where I'm focused.

Okay. So maybe with that, and I have a couple of other big picture questions, we'll come back to those because I want to bring Dean -- I want to bring you into the conversation.

Let's maybe start the discussions coming off of ASCO. But before we get into some of the updates you saw there, I want to just address the EVOKE trial that you and Gilead announced the discontinuation of last night, where the KEYTRUDA plus TRODELVY combination was being tested in first-line metastatic non-small cell lung, PD-L1 high patients. So how should we think about the implications of that for sac-TMT in that indication? What, if anything, should be the read-through there?

Yes. So I [Audio Gap] comparison. And so one has to be a little bit thoughtful on how one does it. But this is in the PD-L1 high. It is looking at the addition of a TROP2 ADC with PD-1. It's very similar to a trial that we discussed at ASCO, where there was impressive data. And in the data that we just had a discussion where we actually put the headline out yesterday with our other partner, Gilead, it didn't meet the bar.

So the way that we look at it is not all TROP2 ADCs might not be the same and that we're very focused on our partnership with Kelun on their unique TROP2 ADC, sac-TMT, which we think is differentiated in the molecular design, and we're very interested in replicating the data that you saw at ASCO in relationship to the China trial and doing it globally. So we think that the opportunity for that potentially is greater, and our job is to bring that through.

So I guess that's a great segue into maybe unpacking that a little bit, arguably, the OptiTROP-Lung05 trial, which I think you were referring to is stronger validating data for sac-TMT than what you saw last night. So really no read-through there despite those both being TROP2 ADCs.

So maybe talk a little bit about the OptiTROP-Lung05 trial. What did you learn and what didn't you fully learn from that program? What are the most important gating points in terms of just trials? And what would you like to see before taking the next steps in the -- for the development of this program in the KEYNOTE-189 population, which has clearly set a very high bar.

Yes. So the first thing is when we brought in sac-TMT, the TROP2 ADC, we were very clear. We thought that this was a differentiated molecule and that there was enormous opportunity outside of lung and breast. So when you see the 17 Phase III trials we have, we've highlighted 13 of them are in tumor types and indications where we're the first movers. What we said in breast and lung is that there will be TROP2 ADCs before us, and we need to highlight the differentiation. And I think we're beginning to do that in lung. And I think there's also data that probably will come out in the next year or so in relationship to breast.

In relationship to lung specifically in KEYNOTE-189, the concept is you have pembro plus chemo in all-comers in non-small cell lung cancer. And the question is, at what point would you take sac-TMT and put pembro in that sort of place. We've decided to do PD-L1 greater than 50%, and that's clearly been a useful strategy.

But the broader thing as to when would you "blow-out" the program within lung. We're already blowing out the program without talking about lung. One of the questions that we always asked ourselves is, will there be innovations on the PD-1 side that we should take into account. And so that's something that we're looking at carefully now with important data coming from Akeso in China. And so we're studying that. deeply. But we've already "blown-out" the sac-TMT program. We're focusing in one component -- part, which is lung.

And I guess the lens for that program on the Kelun side is now starting to shift to the OptiTROP-Lung06 6 trial.

Correct.

So give us some high-level framing on what you would consider to be a successful outcome for that trial? And how does that trial add to your knowledge base around sac-TMT activity across the spectrum of non-small cell lung, including in the less than 1%...

I think that will be an important trial because it will tell you how much weight sac-TMT can hold in the challenging of KEYNOTE-189 and whether or not it would be -- it holds it well enough or would it be better if it held it with another alternative to a PD-1. And I think that's what it will teach us.

And we work very closely with our partners in Kelun. I mean they've just been excellent partners. And so we have -- using their data, almost like a sentinel, allows us to reshape the global trial. So we're very eager to see that data as we decide how broadly we take sac-TMT and whether or not the combination partner should be a PD-1 or something else.

Let's maybe unpack the -- another big theme coming out of ASCO, which you were very much at the center of as well, which is the progress on the PD-1-VEGF bispecific class. So I guess, first, Dean, externally on the HARMONi-6 data that you saw from Akeso. I'd just love to get your thoughts on the issues that were raised by the discussant on the stage after the data was presented that fueled some substantial discussion and debate among investors. I mean, are these really substantial concerns around this global translatability in terms of differences and age? Or is this just skeptics trying to poke holes in the data?

So I think everything the discussant said is legitimate, and we take them seriously. I think the person who spoke was very clear of the things one has to think through. But just stepping back, one of the things that's been very clear when you add PD-1 and VEGF, whatever the VEGF part has been, has been you can hit PFS, but it's been hard to hit OS. That's been a constant sort of theme. We've seen it in our own pipeline. Other people have seen it in their pipeline as well. But you need to step back and sit there and say, is this a clean PFS to OS? You'd have to say that it's clean in relationship to the OS appear to hold.

There are all the other caveats that one has to think about. And so one has to be very thoughtful how one advances it. And so when we look at that data, we sit there and go, on one hand, there haven't been many things that have translated into PFS and OS, and this one is. So we do not -- we think that's an important contribution. But I think the caveats that the discussant said, informs us as to how do we think to move it forward and in what partner should we move it forward and in precisely what indications we would move it forward.

Clearly, if you look at PD-1s and VEGFs, there are opportunities in lung, but it's not just in lung. It's an HCC, it's an RCC, it's in cervical, it's in ovarian. There's many places where a PD-1 and a VEGF works. So we're doing the hard work to sort of sort out where and when we should target those different indications. But equally important for us is not just where we put the PD-1, VEGF, but what's the combination partner? Should it be chemo, should it be Sac-TMT, should it be a different ADC, should it be a different molecule.

So let's unpack that a little bit more. At ASCO, just regarding your own PD-1-VEGF program that you alluded to a little bit right now. You noted that it was Phase III ready, which was intriguing and suggest it's moving potentially at a more rapid speed than certainly, I think a lot of us had thought. So I guess we'll just ask the question, like what data are you waiting for externally or internally before you get comfortable, in your words, to let the dogs out? I think you phrased it...

I'm going to have to live that one down a little bit. But...

What indications can be...

Yes. So clearly, we work extremely closely with Kelun. So us understanding where some of the other agents are will be really important because it's not just around the PD-1, VEGF. We believe that PD-1, VEGF could be an accelerant to other novel molecules, whether they're antibody drug conjugates, whether they're precision targeting.

So it is about PD-1, VEGF. There is more information that will be coming out. But equally important, it's the combination partner that you put in, in a specific tumor indication. So for example, you've talked about the OptiTROP. How that OptiTROP plays out will inform us as to when or whether we should -- how we would advance that sac-TMT in lung and who the IO partner would be.

Okay. Very clear. Another big theme out of ASCO that obviously got a lot of attention was RAS. And you discussed Merck's KRAS programs at your own ASCO event. So how do you see the applicability to lung cancer? And what are the tumor types you see rationale to target? And how is Merck approaching development very broadly?

Yes. So when you think about the RAS, you think of 2 major tumor types, there's many more. But you think of lung, you think of pancreas and you think of CRC. What we have the ambition to do is to displace KEYNOTE-189, not with a PD-L1 VEGF necessarily or Sac-TMT, but in those patients who have RAS mutations that you take a PD-1 and a RAS inhibitor and you don't take any chemo. And you see that in our G12C programs that are advancing, and there's many programs in relationship, not just in metastatic but earlier. We also believe that in CRC, it's very important. There, the combination partner is not PD-1, it's cetuximab. How well can your compound compete in that combination.

And then we've also said that we have a non-G12C RAS molecule, 4716, that one could imagine that whatever we see with our G12C, one would begin to replicate with our non-G12C in lung and CRC. We give enormous credit to RevMed. They've really made an important contribution for pancreas. I think many people will drive to pancreas, and we will make the decision when or whether to drive into pancreas, depending on how we look at where we can do the most good. I do think that many people will enter the field targeting pancreas given the important data of RevMed.

Okay. I have one more oncology question, and then we're going to keep moving because there's so much to talk about in the pipeline, which is a great thing, Rob, as you alluded to earlier.

Just at the ASCO event, Dean, you noted the historic nature of the INT program, partnered with Moderna. So just remind us on your technology, how the technology approach is differentiated there? What have you learned now in terms of what's been derisked in melanoma? And what's the path forward there as you look to expand into other indications and turning this asset into a scalable platform business?

Yes. So I have to give enormous credit to our partners. Previously, I talked about Kelun, but I must talk about Moderna. Their technology is differentiated. And the fundamental issue for cancer "vaccine" or individualized neoantigen therapy is people have done this for 30 to 40 years. And they've had to pick a single neoantigen. That's very difficult in solid tumor. What the Moderna technology allows us to do is to make a spread bet. We don't have to pick one. It's 20-plus, right? We can pick 30, and that's critically important. And so the ability to pick so many neoantigens and put it in a vaccine is important.

We have focused where IO has worked. We have focused where KEYTRUDA works. We have focused where KEYTRUDA works in earlier stage. And so that's where we are focused. And the melanoma data that we saw in Phase II, I think, is thought-provoking. And if we can repeat that in the Phase III, I think it will move the field in a substantial way.

One of the things that you also notice is that when you think about mRNA, sometimes people worry about durability. But for the melanoma, the 5-year data, I mean that's pretty durable, right? There was no more injections. It was pretty durable. That confidence led us to open up additional trials and even earlier stage in lung as well.

So as that moves forward, [Audio Gap] where you see KEYTRUDA at a minimum [Audio Gap] you could see us be very interested in moving INT in that form. We would also look at other people who are doing it in non-IO sensitive tumors and metastatic. And if they get positive readouts, we would react to that as well.

Okay. Let's keep moving. Dean, let's move to cardiometabolic. Enlicitide, just has the filing been made? And if not, what are the remaining gating factors? And you have this CNPV program. Any impact on that from Makary's departure?

Yes. So I can tell you that I actually had a meeting because after the Makary departure, the FDA wanted to make very clear to us this is on. And so we have every indication that the national priority voucher given for enlicitide is moving forward.

In relationship to how it's done, you -- it's almost like a rolling submission. And once they're satisfied, they send you a letter and then they say the PDUFA date is going to be this time. Whenever we receive that letter, that's when we will make it public. But now in the CNPV program, when you get that letter, that PDUFA date is really fast upon. It's no longer 6 months or 9 months. It could be within 2 months. So we believe that's moving forward, and we're very eager to move that.

And we think it's going to lower LDL in a substantial way. And the -- the point that I would also make out is the AHA and ACC has done a tremendous work in changing the guidelines. It used to be, hey, take a statin and call me later for the last 12, 13 years. And what they said is we're going to give you hard targets that you need to meet. And I think what that will do is it will increase the need for having patients not just on statins, but other mechanisms like PCSK9 and both the antibodies and our small molecule. I believe that the expansion will not be what percent of the PCSK market who gets. I think that there could be a substantial increase in the PCSK9 market.

And I guess as we think about the development of the enlicitide program more broadly and you think about combinations and particularly including with GLP-1s potentially, just what are you paying the most attention to in terms of market developments? And Rob, I actually want to bring you into this conversation as well to talk a little bit about just obesity and how strategic that is to you. So maybe starting with you.

So I would just say enlicitide is really important for that patient population. Clearly, GLPs are really important. I think people know that we have a GLP-1. We've been very focused on being very clear that we're not going to be playing in the peptide injectable or the peptide oral. We want to play in the small molecule GLP, and we want to play in the small molecule combination space. Those programs are moving very fast within our program, but in relationship to the markets of both obesity but also enlicitide. Rob?

Yes. No, I think Dean said it, I mean, we are interested in looking at the broader obesity space, but less about obesity than it is the comorbidities. So it is more broad in the way we think, and that's where the combination strategy comes in. And as he said, it is about oral small molecules and how we can combine that is the focus area.

So that's kind of where we're focusing. And you'll probably see more from us in that space coming out into the early 2030s. But there's a lot of work to be done with enlicitide in the interim period, not only as a mono agent, but also with our fixed-dose combination potentially in combination with Lp(a). So there's a much broader portfolio that we're thinking about across the broader cardiometabolic space.

Okay. Maybe just on WINREVAIR, Dean, just any update there, too, on FDA discussions on the Phase III trial design, feedback on time to clinical worsening as a primary endpoint and just timing on next updates there.

Yes. I don't want to get ahead of the FDA, but the time to clinical worsening to me is like really important. That's the most meaningful thing to the patient and to the provider. So I just want to make sure that to me has to be a prominent part.

I mean just to sort of step back in PAH, I think PAH, I think sotatercept/WINREVAIR and activin signaling inhibitors has changed how we talk about that field. And the question is, in a patient population that has HFpEF and has PH physiology, which is one of the hardest patient populations, can we make the same contribution. And so we're very eager to do that and move that forward with the FDA and increasingly with the community because they recognize in this patient population, they largely have nothing.

Okay. Let's maybe move to immunology, TL1A, tulisokibart, we're approaching the pivotal Phase III ulcerative colitis readout, I believe, in August, September. So I guess, how should we be thinking about the bar for that pivotal? What would constitute a positive trial? I mean your Phase II data set a really high bar already.

Yes. So I would just step back and what do we hope? What do we hope is that TLA -- TL1A, which is a member of the TNF superfamily gets talked about, no different than TNF is talked about, no different than IL-23. We want this to be a node that is really important. The second point that I want to make out is we think we want to make it not just a node because of its efficacy, but also because its AE profile is so low, so it opens up combinability. And the third thing that we think is really important is that we think that there's a narrative about immunofibrosis. Those other agents are really important and an important node, but they're not -- people view them as immunology agents, not fibrosis agents.

So although we're doing ulcerative colitis and Crohn's disease, what you see our clinical development is quite extensive. And in comparison to others, much more extensive. We have it in HS, we have it in psoriatic arthritis, we have it in rheumatoid arthritis, we have it in SSc-ILD. And we are hoping that as we see data from this, can those different indications make that concept of immunofibrosis come alive. And if it does, then it gives us a beachhead to expand, deepen and extend with other biomarkers and other combinations, all being different depending on what the indication is.

Okay. Maybe just moving on to your HIV program.

Thank you.

Do you want to comment on the data from yesterday? I'll leave that as an open-ended question for you.

So we're very pleased. We have talked about islatravir and that family as an NRTI next generation with translocation inhibition. But what we've always said is this could be a new anchor medicine. And you see it in isl-dor, which is a once a day with non-integrase, 2-drug regimen, first 2-drug regimen without an integrase. We're launching dor-isl. We have both naive as well as switch data. You have this isl-len now, q week. We have positive data. We'll be talking to the FDA with our partners, Gilead. They're the ones who have the market authorization, but this could be the first q-week treatment, a 2-drug q-week treatment with 2 novel mechanisms with no integrase.

And then you also have our own islatravir-ulo, which is, again, trying to show everyone islatravir can be that base. and another q week. And then the fourth thing is it's not islatravir, but it's islatravir like, MK-8527. Can we be the first compound that can make a prep that's q-month oral. I mean, to us, that's that excitement. So we laid out 4. One is getting launched, one, we have positive data and hopefully, 3, 4 fall into place as we hope.

I'm very excited about that program, too. It's great to see the enthusiasm. Let's talk about ophthalmology and retinal disease. You've got the BRUNELLO study is reading out the Phase IIIs in DME, I guess, third quarter, fourth quarter. So just level set us on how we should be thinking about the program because as I look across consensus models, there's not a lot reflected for that.

Yes. So I would just step back and say our ambition here is within the company, and Rob and I -- is palpable. What we're hoping to do is to put 2 mechanisms in retinal vascular disease, [Audio Gap] which is a Wnt agonist. And the concept is, could this be the [Audio Gap] vascular endothelial growth factor pathway molecule, an agonist that could treat in diabetic macular edema. So all the other sort of drugs in diabetic macular edema and age-related macular degeneration are vascular endothelial growth factor based. This would be the first non-VEGF.

The reason why that's important is that VEGFs have transformed the field, but there are many patients who don't respond well with VEGF immediately or with time. So we hope that we can be the first non-VEGF mechanism of action moving to that field.

But I also want to make sure that we also think that we want to be the best VEGF mechanism as well. So we have MK-8748. It is differentiated from Vabysmo in the fact that like Vabysmo, it has an anti-VEGF arm. But differentiated for VEGF, we have a component that agonizes, that activates Tie2, and we are very bullish about that. So what we're hoping to do is provide the retinal field, can we really have an excellent anti-VEGF offering in MK-8748 that is differentiated. And can we also provide them with the first non-VEGF pathway in MK-3000. If we can do both of those, then we believe that we can actually advance this field. And I think Rob can speak about the commercial. When you look at the commercial opportunity in eye, it's not insubstantial.

Yes. I mean it's worth pointing out just to kind of size this between DME and AMD, it's about a $15 billion market. As Dean said, 40% of patients will either -- show today either partial or no response to VEGF therapy. So there's a lot of switching that happens in this space, a lot of unmet need. And if we have now 2 agents that can [Audio Gap] we think that's a meaningful opportunity. We're talking about the Wnt, which we will see positive -- or we will see the data readouts coming. But we also accelerated our Tie2 into Phase III faster than people had expected. That's moving now in AMD. So you've got now our Tie2 moving in AMD. We've got the Wnt moving in DME. And so our ability to have a meaningful impact, probably bigger than people expect and sooner than people expect, is real.

Great. Great to see the progress in that program, too. I guess in the last couple of minutes, quick maybe rapid-fire, Dean, what's in the invisible pipeline that Rob talked about that excites you the most?

I think it's invisible. But I would just sit there, I go, you look at our pipeline, we are laying out new beachheads. And when we think about those beachheads, we can expand, deepen and extend. There becomes incredible opportunity to add on other mechanisms to the ones that are in the visible pipeline. So much of it is this.

But I'll just lay out at ASCO, I, for example, for antibody drug conjugates, everyone was so focused on Sac-TMT. I need to remind them, I've got 3 with Daiichi Sankyo. But the other thing is I've got one in heme, and I've got like 4 or 5 heme assets moving, maybe 3 of them with readouts in '28, '29. And also, we laid out there, there's like 2 or 3 other Kelun antibody drug conjugates that we haven't declared that will be very important as we, with Kelun, decide when to make that reveal depending on their data and our data. So there's a lot, but some of the "invisible" is kind of visible. It was on a chart at ASCO.

Great. Great framing. Rob, any closing comments in the last few minutes?

No. I think the hardest thing here is the -- we have so many opportunities. The breadth of our pipeline is so impressive, not only in the late phase, greater than 20 assets driving over $70 billion, all either now launching or will be launching very soon. 70% will be completely derisked by the time we get to 2027 from a clinical perspective. But we have an equally exciting Phase I pipeline as well. You can think about macrocyclic peptides, you can think about antibody drug conjugates and others. So our sustainability as a growth engine is real, and you're going to see it increasingly play itself out as it already has through the proof points we put on the board so far.

Well, great to see all the progress. Thank you so much as always for being with us. I really appreciate the update.

Great. Thank you.

Good morning, everyone. My name is Akash Tewari. I head our pharma and biotech efforts here on the research side for Jefferies. Joining us is Merck, a company that really global company with focus on multiple disease areas. But we have Marjorie, who heads their oncology efforts, and Merck is certainly a leader there, and we're fresh from coming from ASCO. So I'm really excited for this conversation.

Marjorie, maybe I'll hand it off to you for some opening remarks, and we'll get to going.

Yes. No, great. Thanks so much. ASCO was an exciting time for Merck and for us. Our partners, Kelun Biotech presented data from OptiTROP-Lung05, which is a Phase III global study looking in non-small cell lung cancer at the combination of sac-TMT combined with KEYTRUDA versus KEYTRUDA alone, showing clinically meaningful improvements in progression-free survival and a trend noting immature data and overall survival for those people who had non-small cell lung cancer with a TPS of greater than 1%. We also had updated data sets from KEYNOTE-942, which is a combination of pembrolizumab and INT, an individualized neoantigen therapy as treatment of people with certain melanoma Stage II and III, and that 5-year durability data was quite compelling.

We also had compelling data from the 5-year update from KEYNOTE-522, looking at people who have triple receptor-negative breast cancer as well as other updates across the oncology portfolio. So it's a great meeting for Merck. And there was a lot of really exciting external data as well, which made it on time and helps us to be excited about our continued path forward.

Understood. And I certainly agree. It was definitely a good ASCO for Merck. I wanted to start on lung, and I'll take it from a different angle, which is the question we often get from investors, and frankly, I've asked on investor calls as well. Why hasn't every study in lung started yet? And I can sense that your team has been consistently very diligent, and you mentioned data-driven, I think that's right. But there's a dynamic on this, which I don't think is well appreciated, which is pembro in lung may actually end up having a much more diversified revenue stream than I think people appreciate. People think about KEYNOTE-189 as a massive driver, but you guys have run adjuvant studies and maintenance studies. And so this idea that frontline lung in that traditional sense is the be all and all may not actually end up being the case. Could you give some color on that in terms of when we think about pembro's revenue drivers today in lung, how diversified is it in the United States?

Yes. I am not the best person to speak to this. So I apologize already, but I should have these numbers, and I do not. It is not the #1 revenue generator for Merck. I can't speak to where that comes from. But you're right, we now have multiple studies in the adjuvant setting, including 6 that have overall survival and more of the revenue, particularly future-looking revenue coming from KEYTRUDA Qlex and we anticipate in those settings, less so with the 189 regimen.

Understood. Now maybe going into ASCO and I'd love to give -- you obviously have a PD-1/VEGF in development that's Phase II-ready. And your team has been very prudent in terms of where you want to develop that asset. But I'd love to get your take because you've said, we want to get more data from the field externally before we figure out our own development program. Obviously, we've got some important data sets from HARMONi-6, the ROSETTA data from BioNTech and then also the lack of a PFS on HARMONi-3. How is Merck's view on where PD-1/VEGFs fit a role, particularly in lung, changed post-ASCO?

This is such an interesting development for all of us as we think about how to optimize therapy for people with different kinds of malignancies. Through the KEYTRUDA program, we have more than 20 studies that we have done with different combinations of KEYTRUDA with VEGF inhibitors, including bevacizumab, where we have 2 approvals, lenvatinib, where we've seen some compelling data in endometrial cancer as well as in renal cell, and other VEGF TKIs. And so we've learned a great deal about the combinations over time. And historically, it's not been a one-size-fits-all approach for these kinds of combinations.

And what has really been the question, and I think people are more excited after ASCO is could the bispecific of putting these 2 together and potentially improving the therapeutic index by putting them together because the safety appears to be a little more tolerable and maybe you can increase the efficacy actually of the PD-1 as well by the structure. Is that going to be what it takes to open up VEGF more broadly across multiple tumor types.

And I think we're still left with more questions than answers. So HARMONi-6 was great data. I want to congratulate Akeso, the investigators. It is clinically compelling information. It's the first Phase III randomized data set we've seen with the bispecific that shows consistency between PFS and OS. But open questions remain regarding the translatability into global studies, the translatability into different subsets of non-small cell lung cancer, referring back to what you said with you even look at HARMONi and you look at HARMONi-2, where you didn't necessarily see that same correlation between PFS and OS.

There are also open questions about -- in that particular HARMONi-6 study about the differences in age that was seen, where you saw most of the benefit for those people who were less than 65. And in a different magnitude, people keep talking about 407 and KEYNOTE-407. And I'd like to point out that, that study, the control arm, there was 60% crossover. I don't know if people remember that, 60% of the control arm crossed over to pembrolizumab. And the age hazard ratios, there was a small difference, definitely between those who were less than 65 and those who are older, but the magnitude of difference was not the same that was seen in HARMONi-6.

And so I'm excited because the curves separated and they stayed separated. Will they continue that way? I don't know the answer to that. When we look at the HARMONi -- HARMONi-2. They didn't seem to do that from the data we know to date. So I'm curious, and it's an area where we want to continue to develop and explore. But how these agents will combine in different tumor types is to be determined. So we're always -- as you said, we're data-driven. We're very disciplined, and we will go where there's opportunity where we think the science and the clinical need makes sense.

Great answer. And there's a few threads I want to kind of pull on. I mean, a, you mentioned in 407 because I think there is this perception, well, squamous is slightly easier than non-squamous. But you mentioned there's a lot of -- there was actually a lot of crossover in the 407 study. So maybe just generally, this idea that pembro chemo in non-squamous versus pembro chemo and squamous, there's a difference in terms of how difficult it would be to beat that regimen. It sounds like you're saying that's not actually the case. Both are going to be equally difficult to surpass. Is that maybe the right?

I think that people -- KEYNOTE-189 has set a really high bar, and that's great news for patients. It's set a very high bar. And the other thing that we know is over time, clinicians get better and better at keeping people on therapies as they learn how to identify who best benefits from treatment, how to modulate side effects, so dose intensity gets better. It's doing a really good job for patients. There's still a huge unmet need, so you want to develop things. I don't know that I would say that it's -- the bar is different as a barrier to entry for squamous versus non-squamous. They're different biologic subtypes.

Generally, the effects are somewhat similar for a checkpoint inhibitor between the 2 histologies, the huge meta-analyses. There are more neoantigens in squamous, and so you might get a little more robust response there. So that may be why you're seeing the barrier to entry. The other aspect is that non-squamous, there's more division of that histology into subgroups such as RAS mutations are more present in those who have adenocarcinomas. And so it's more about how does the biology and the current therapy and thinking where the future is going, how then do you want to develop in these different spaces. And so again, we still have more questions than we actually have answers at this time.

Understood. Now one of the data sets that I think I sense is going to be incredibly important. I'm curious if you share the view is I think Kelun has an 06 trial with sac-TMT in less than 1% NSCLC. You got the 1% to 49% data from 05. And my view was it did look incredibly strong. But it sounds like the less than 1% is an important part of that puzzle. Why is that, right? What are you going to learn from that 06 trial and you're hoping to see with sac-TMT and NSCLC?

There are a couple of questions there. The first question is related to does the PD-L1 expression level have any influence on the activity of sac-TMT. And there's not a biologic reason to expect that to happen. I think is when you look at high PD-L1 expression tumor scores, that KEYTRUDA does better and better and other checkpoint inhibitors improve their activity as you get higher PD-L1 expression. And so the bar to beat and improve upon that is higher. So the magnitude of benefit tends to be a little bit less.

The question that is going to come from this is related to can you increase the benefit of the combination there where people do use KEYTRUDA for the less than 1%, but it's not uniform. And we have a lot of data showing that there is benefit in this population. So can you enhance that from an ADC combination. I think is one of the questions. We've seen some suggestions on tumor receptor-negative breast cancer that, that could happen that using an antibody drug conjugate. We've seen it in bladder cancer as well with a different antibody drug conjugate class. And so that to me is the question that I'm most curious about is, do you think that you can get something that is at least additive, if not better, by that combination? And that's what I'm hoping to see.

That is a fascinating answer because I will say, even talking to Kelun, they strongly believe that there is an inherent synergy between pembro and sac-TMT. And then there's also this dynamic of versus just traditional chemotherapy, you have a better durability of effect. So that's quite interesting, which kind of leads me to another perspective, which is KEYNOTE-189 was such a transformative trial because not only did you give great patient outcomes, but it was also the simplicity. I mean there's no QCS, there's no TMB. This is something that every doctor, it's histology, people understand this, and it can get used.

And you've talked about this concept of workhorse regimens. What's interesting to me is when I look at the OptiTROP-Lung05 data, I see a consistency of response. When I asked you about less than 1%, you're saying, I hope I see a consistency of response. And when I even look at the development strategy you had with Kelun, a lot of times, you ran studies in subpopulations, but you're ultimately actually running trials pretty much everywhere.

So to me, the read is actually we went conservative, but then we're seeing this drug is actually working more broadly. So that kind of brings me to ultimately what your strategy could be in lung. Could it be that it's not separate trials in different sub-cohorts, but it actually could be another KEYNOTE-189 regimen where whether it's a PD-1 VEGF or pembro that you could have a broad-based improvement across lines of therapy, and that's really ultimately where this is headed. I'm curious.

When we started the global program with sac-TMT, we tried to think ahead 3 to 5 years from starting these Phase IIIs, what was the therapeutic landscape going to look like? What was the clinical unmet need and where could we add the greatest value? And that explains where we are today. So for those who normally get pembrolizumab as a monotherapy, often these are older people who are not healthy, you don't want to give them chemotherapy for very specific reasons, sac-TMT is a cytotoxic therapy. It's an antibody drug conjugate, but it still has cytotoxic activity. So can you improve the efficacy because people unfortunately relapse and die in that population because they have metastatic disease, and so can that help? So that's that study.

The KEYNOTE-189 regimen, when you look at, you've got people who have squamous carcinoma and the biggest unmet need we saw was for a maintenance approach there. There isn't a maintenance therapy. There are different ways you could consider that population. It was you could add on to chemotherapy and KEYTRUDA, and often you compromise on the chemotherapy dose or the antibody drug conjugate dose or both, where the benefit is probably from the maintenance approach and that also can make it more tolerable. So we think sac-TMT is a tolerable regimen that could be given for long periods of time in combination with KEYTRUDA.

And then when you think about the adenocarcinoma population, we were thinking ahead, we knew that RAS was coming into this space. That segment is getting more and more subdivided. I think that the data from OptiTROP-Lung05 and then like you said, for 06 does raise the question of, is there the possibility that you will see some kind of sac-TMT combination across all of these subgroups. And so we don't have studies that we've talked about fully in all of the different populations. But I think we've got a very diverse portfolio, and you can look at the data from ASCO and you can make your own estimates about what we might do there.

Understood. Maybe just ending on sac-TMT, and you mentioned something that I think is incredibly important is it's a tolerable drug. And one of the things that I noticed with the 05 data was that the duration on treatment, which is to me incredibly important, was double that of pembro monotherapy, which is unusual. Usually, you wouldn't think the more cytotoxic combo regimen has that.

So a couple of things. Can you talk about really how you optimize the dose of sac-TMT and Kelun to their credit, too, when they started at 5 and 5.5 to then going to 4 , which seems like a Goldilocks dose, how you guys have learned to keep patients on therapy? How much of an improvement have you seen even from the early studies with sac-TMT to now the trials are running now? And how you expect that to translate into your own global Phase IIIs? Should we expect this durability of response to carry out that might actually be even better than some of the early trials we've seen out of China?

There's a lot wrapped up in that question. So let me think about how to approach this. From the dosing perspective, antibody drug conjugates, they do have cytotoxic payloads. And so there is usually a dose response you see with chemotherapy. And so you do see this with sac-TMT is that the higher the dose, you tend to get increased efficacy. You also get increasing toxicity, too. So we're trying to look for that best optimal activity versus tolerability when we were choosing doses. We also wanted to have one dose for combination as well as monotherapy. And we have multiple studies where we're using sac-TMT as maintenance.

And so going with the highest dose that is tolerable doesn't always make sense in combinations because combinations increase toxicity. They always do, whether it's a KEYTRUDA combination or any other kind of combination, side effects get worse. And the PK between 5 milligrams per kilogram and 4 milligrams per kilogram heavily overlap. And so it's the totality of data, and we see very consistent sort of durations of response, PFS in the Phase I and Phase II data sets that led us to choosing this. And that's why you saw 4 milligrams per kilogram combined with pembrolizumab in the OptiTROP-Lung05 study. So that's how we ended up with the dosing regimen that we so thinking about this is I'm not going to call it a workhorse or I'm going to call it a cornerstone ADC is that for the clinicians out there, having one dose and monitoring combination makes their lives a lot easier. It really does. And so that way, you don't have to think about it is in your pathways. You don't have to really question it. You just can't prescribe it.

The AE management, I talked about this in regards to 189. Doctors get better managing toxicities over time. And the opportunity we had here with our partnership with Helen is they were running studies ahead of us. And so we could learn from what they were doing. So an example of this is stomatitis care. TROP2 is expressed in the intestine. All of the TROP2 ADCs have some GI toxicity. And for an example, in the Kelun studies, they do not routinely use steroid mouthwashes. We use them in our Phase III data sets, and we have increased the use of it. We also use much more aggressive secondary growth factor prophylaxis because of the hematologic toxicity, and it also helps recovery of the intestine. And so we've been much more prescriptive about that. And these are AE managements that oncologists are very used to giving in their daily practice and don't add significant burden to patients.

So if you're able to make the experience tolerable, then that's where you get the benefit. How this will translate in global studies is to be determined. Global studies inherently are different than single region studies, whether they're China studies or a U.S.-only study. There's going to be variability there. And so we are teaching physicians in real time as they are getting used to these drugs. And so my hope is we have learned a great deal, thanks to our partnership and our very large Phase I/II program that we've done to date, and we continue to iterate and evolve what we're doing in Phase III programs. I'm encouraged by the endometrial readout, which you haven't seen the data yet, I have, very exciting. And so having positive PFS and OS is the first ADC in a Phase III data set endometrial, I think, supports that we are on the right path.

Understood. Now last one on just PD-1/VEGF and then I actually want to go broader. The [ Lenvima ] asset, I think the term Merck adopted was we're Phase III ready at ASCO. I will say the one question I think I've certainly thought of, and I've heard this from investors as well is like it's unusual for Merck to present unconfirmed responses. I mean you guys are very straight and narrow. You give confirmed responses, you give proper durability. And at AACR, I think both in the poster and in the abstract, it was kind of the same data cutoff.

And so the question I've always had is really how did that data mature over time? Really encouraging 55% response rate, but it was unconfirmed. Is there any qualitative color you can give us in terms of as you've given that therapy for longer duration because that's really what you have internally, how that profile has evolved over time?

I don't like to talk about data that's not public yet in any kind of form. And so we have confidence in the data that we presented. Otherwise, you wouldn't have seen us present information like that. And so we wouldn't call an asset Phase III ready unless we thought that what you would see is what you would get.

Understood. That's helpful in and of itself. Now maybe stepping back and hitting on also CML. And you guys just did some external BD there. I was happy. I actually, I covered Terns. So it's always great. But there's been -- I think to me, it has been kind of frustrating because there's this idea like, oh, I read the deal documents and the response rate changed and this is not the asset we think it is. And I'd love to give you an opportunity to kind of -- what is your perspective when you saw the 701 molecule in terms of, a, safety and durability of response. But b, I really want to hit on efficacy, right? I remember talking with Amy at Terns and she was saying, we have the opportunity to maybe run a head-to-head study against Scemblix or run a study that where we feel like we could be superior against standard of care, which is something Scemblix never showed. So specifically on the efficacy front, what is your view of that molecule and what it can deliver?

We're really excited about the acquisition of Terns and TERN-701, which I think we've now renamed MK-4208, but we're calling it 7013. And this drug, we really appreciated that we think that they have improved the therapeutic index. And that's -- it's -- the way that they have presented data is very consistent. When you look back at the original Scemblix Phase II data sets and Phase I data sets and the other second-generation TKIs, they use the same terminology. So that way was an apples-and-apples indirect -- so that's where the data set is. We were able in diligence to look at patient level data and look at every single patient, including the ones that weren't presented at ASH last year and look broader. And so when we made the statements that the efficacy, you've got incredibly fast kinetics of time to response.

We were able to independently verify and look at each patient and verify that. When we say that MMR is around 2x what you would expect to see from more recent assets. We have verified that information and DMR 2 to 3x similar direct comparisons, again, all of the caveats and limitations there. All of that is very accurate information. And so we think this is something that is -- does have the opportunity, as Amy had said, when she was CEO of the company, of being able to really improve outcomes, not only in this sort of relapsed/refractory population where it's originally studied, but I think a lot about the first-line setting because clinicians still worry.

Thankfully, the transformation in acute leukemia has dropped dramatically. And so it's less than about 10% right now. It's really come down. But what you want to see is that very fast response. They do get better over time. I think there was updated data presented at ASCO on Scemblix that's showing over time, things get better. But you really want that deep, deep response and then you want the durability of it because it opens up the potential for potential for some people to go off therapy. And this is a chronic disease. And after several years of therapy, if you keep someone very suppressed, you might be able to stop their therapy and give them a break.

This goes into the tolerability as well is that most of the significant toxicities that have been reported in this class have occurred in the first 6 months. And so I think that, that's definitely there are class effect side effects that you are going to see that all of them are going to have. But it's the magnitude of them, the frequency and how you manage it that improves that therapeutic index. And I think Terns has done a really nice job there. So we're excited. We're continuing on with the program and the progress. We're about a month into the acquisition and the integration, and we really are excited about the potential opportunity in the future with this asset.

Understood. And maybe just a final point on that. In terms of the design, I know it's early in terms of a Phase III. I think quite an important part about deep molecular response and that could be curative. Could you run head-to-head studies? Could you run or a trial where it's more traditional to what Scemblix did, which is in kind of frontline against standard of care. Is there a discussion internally for your team to take the more aggressive approach? Or will more traditional.

So we're some month in. So give us a little time.

That makes sense. Now maybe stepping back, the ADCs you don't get asked a lot about are the Daiichi ones. And that at the time...

Because they're great.

Okay. So -- and that's incredibly important because, again, one of the largest pharma partnerships ever, I think probably the largest at the time of the deal. But I think there's been mixed headlines. There's -- it's a really competitive landscape. And there's always this question of, well, which one of these assets is Merck right now most excited about. I'd love to kind of give you a chance to refresh in terms of the data that you have internally because you're running these kind of dynamic Phase II/III trials, larger Phase II studies. So there's a lot of data you have internally that maybe is not public yet. Of the 3 assets, which one do you feel like since you've acquired it, you've gotten much more excited about as you've gotten more clinical data?

This is always hard because it's like asking what your favorite child is or -- so what is it that you like to do? The IR team will laugh because if i get asked a question, I always like to mention one specific drug is my favorite drug because they're also different and special. They each have fantastic potential. And that's what I think is -- we saw that initially when we did the diligence and we started initial discussions.

And as we're seeing data come out, if you look at I-DXd, we've got a PDUFA date in October for small cell lung cancer, where there's tremendous unmet need, about 4% survival at 5 years for this horrible malignancy and very compelling efficacy from the Phase II data set, we have ongoing Phase III study and potential for combinations also with MK-6070, which is our DLL3. We have ongoing Phase III studies looking at I-DXd in esophageal cancer as well as in prostate cancer, which they're all exciting to me. And I think the continued data that we're seeing keeps me excited about this asset and the potential. And we have other Phase II studies ongoing, which we've not publicly disclosed.

If I move to R-DXd, another one where it's, again, exciting and compelling data. It is -- you see very marked responses in platinum-resistant ovarian cancer. So we have Phase III studies ongoing in the platinum-resistant setting. We have large Phase II data sets and more Phase IIIs soon to follow in this indication. We are also looking at R-DXd in other tumor types. And so we're waiting for emerging data to help inform where else this drug could potentially go.

And then with P-DXd, we started a Phase III in breast cancer. And so HER3 is really important in breast cancer in a way but I think is not always appreciated. And so we've started one where in hormone receptor positive breast cancer, including a combination with KEYTRUDA, where normally you don't give KEYTRUDA. And it's partly what you mentioned earlier about the ADC combination, -- can it improve the likelihood of benefit to a checkpoint inhibitor because of increased antigen exposure. Is there something there that makes that happen?

And with this, we also -- in the study, in HER2 is allowed in the control arm because it does have very, very, very low HER2 levels in there, and we know that there is expression response with ADCs generally across the board. We also are doing Phase II studies, and this is public information, looking at HER2-positive because HER3 is particularly important in HER2-positive disease. And HER2 has done an amazing job. I'm a former breast oncologist, I'm now drug developer. And for me as a breast oncologist, HER2 has been transformative in HER2-positive disease, but there's still a ton of unmet need and people diagnosed with de novo breast cancer. So opportunities for multiple different kind of combinations to innovate there.

And a quick one on that, de novo. I mean, this question, I think Lilly presented some data with her Nectin-4. And there's -- to me, this is like -- this is a huge problem. You have all these TOPO ADCs. They're all going frontline. You're going to have this issue in ovarian. And I think there is early signs that if you retreated with TOPO, you're not getting a response at all. It is regardless of even changing the target. So when you talk about HER3 for breast, is that -- what's your confidence that you can retreat with the topotoxin and get a response? Or is it more we're trying to go to populations where Enhertu really hasn't gone?

I think to be determined. And so there are multiple different data sets. It's -- well, if I take a step back and just talk about chemotherapy, and so I'll go back to my history as a breast oncologist, we even would never treat someone with paclitaxel to go to docetaxel. We would never treat someone with Adriamycin to go to Doxil. You don't do them sequentially like that. And so there have been data sets presented that have shown that if you do ADC A with the TOPO and the ADC B with the TOPO, you don't see a lot of activity. That doesn't surprise me.

The big question is at what treatment-free interval do you get sensitivity back and does that happen? Because you can retreat with taxanes in breast cancer if you have a period of time between them and get quite robust activity. Same thing is true with anthracyclines. You can retreat with Doxil if you had Adriamycin and get quite robust activity. So I think it's to be determined. If the mechanisms of resistance are different with the TOPOs, you can get topoisomerase 1 mutations and you also can get change in efflux pumps. And probably, it may be that specific TOPO payload that could make a difference on whether or not there's response to. So a lot for us to learn and think about moving forward.

Understood. I have a little break on my next meeting, so I'm selfishly going to ask one more question. She's giving me a scalp, but it's fine. On the Moderna INT partnership, and I say this is -- I'm probably -- I was more skeptical than anyone else. I was like, there's all these LAG-3 studies in adjuvant and they've all failed actually. And you continue to present really interesting data regardless of PD-1 expression of a durable response, which I think is quite interesting. I want you to talk about the signal you've seen in melanoma and how it might apply to lung. Have you -- has your confidence in that program increased? And what are you learning about the biology of these personalized cancer vaccines that maybe we don't appreciate?

So for those who are not familiar, 942 is a study looking in Stage II and III melanoma of pembrolizumab versus pembrolizumab combined with INT, 5-year follow-up information, you saw that there is almost a 50% reduction of distant metastasis as well as relapse-free survival. So I'm rounding up one number rounding down another number. So really compelling activity that's prolonged. They also have exploratory data showing T cell clonal expansion that was maintained even though the INT was stopped and it wasn't continued on, no boosters were given.

So the question that you're asking is how do we take that and apply it to non-small cell lung cancer. The reason why we started Phase III is we just opened up one in Stage I lung cancer -- non-small cell lung cancer relates to the TMB levels and the neoantigens, the similarities that you see between non-small cell lung cancer and melanoma. The underlying biology of what makes something immunosensitive is the most similar between these two diseases, which is why we started our Phase III programs. We have multiple Phase II studies looking more broadly, for example, renal cell, which is IO sensitive, has less neoantigens. And so will something like INT be effective there. And then other studies which are IO-sensitive like bladder cancer, we have Phase II studies ongoing to really understand that as well. So more to follow.

More to follow indeed. Thank you so much. I really do appreciate.

Thank you for standing by. Welcome to the Merck & Company Inc. New Jersey USA investor events at the American Society of Clinical Oncology Annual Meeting. [Operator Instructions] 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.

Thank you, Ivy, and good evening, everyone. Welcome to Merck's Investor event at the American Society of Clinical Oncology Annual Meeting. Thank you to all of you who've made the effort to be with us here in Chicago. It's great to see such a great crowd here tonight, and thank you for those that are tuning in via the webcast.

So we're excited to have this opportunity to speak to you about Merck's oncology program. During today's call, a slide presentation will accompany our speakers' prepared remarks and has been posted to the Investor Relations section of Merck's website.

Before we get started, we'd like to remind you that some of the statements that we make during today's call may be considered forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. 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. Please reference this slide in our presentation and our 2025 10-K, which identifies certain risk factors and cautionary statements.

So our agenda tonight will start with Dr. Dean Li, President, Merck Research Laboratories, who will make a few opening remarks. Dr. Marjorie Green, Senior Vice President and Head of Oncology, Global Clinical Development, will provide an overview of our oncology strategy and key progress across the portfolio, including important clinical data updates. Next, Jannie Oosthuizen, Executive Vice President and President, Oncology and MSD International will speak to the commercial landscape and the opportunity we see to further impact patient lives. Dean will then provide closing remarks before we get to Q&A. Sophie Opdyke is sitting here in the front row, Senior Vice President of Global Oncology Marketing, and she will also be available for Q&A.

So with that, I'd like to turn it over to Dean.

Good evening. It's a pleasure to see so many of you here in Chicago. One of the things, I think, is important is we're trying to create a cadence of what our strategy is and try to define what it is and hold ourselves to be predictable in saying that in 2021, we outlined 2 clear objectives: To sustain durable leadership in oncology, we wanted to maximize the positive impact of KEYTRUDA especially in earlier stages of disease; and to diversify our pipeline with novel mechanisms. And then since then, we have made steady and important progress in demonstrating the benefit of KEYTRUDA in improving patient outcomes, especially in the earlier-stage setting. Last year, we also introduced KEYTRUDA QLEX, a subcutaneous injection of pembrolizumab plus berahyaluronidase alfa, allowing the administration in as little as 1 minute when given every 3 weeks. And we have leveraged the data and insights gained from KEYTRUDA to advance a broad and diverse pipeline of innovative candidates and novel mechanism of actions. And I think Marjorie will speak to a few of them, but we use our experience with KEYTRUDA and what it can combine with in how we look at these novel mechanism of actions. And we also look where KEYTRUDA doesn't work so well and where we want new mechanism of actions as well. And then over the course of the last few years, these 2 objectives have been our guiding principles. And this evening, you will see some significant progress we have made in executing against them.

So let me put our progress in context because where KEYTRUDA goes allows us to figure out where other things should go and gives us a leveraging point in relationship than that.

So KEYTRUDA has now received FDA approvals for 44 indications across 19 tumor types as well as 2 tumor-agnostic approvals, and clinical programs continue to generate evidence with the potential to further transform cancer care. In 2021, we also felt that our ambition would be that 25% of KEYTRUDA sales would transition to go much more in the earlier stage indication by the end of 2025, and we've achieved that ambition. That ambition is important as we think in the future about our pipeline, but also setting up were subcut KEYTRUDA can go, KEYTRUDA QLEX can go.

And so today, KEYTRUDA-based regimens have received FDA approval for 11 indications in the earlier setting, of which 6 studies have demonstrated an overall survival benefit -- the gold standard for oncology trials. So KEYTRUDA continues to raise the bar in treating earlier stages of disease and improving patient outcomes and laying a road map for us to follow.

We have advanced our foundational position with KEYTRUDA to create a diverse pipeline by executing on 3 pillars that we think is important. Immuno-oncology, and you've seen KEYTRUDA, we've talked about KEYTRUDA QLEX, but it is around PD-1 VEGF. It is around INT as well. Precision molecular targeting that many -- some of the programs that Marjorie and also a very robust tissue targeting candidates in the ADCs, both internally but also with robust partnerships with Daiichi Sankyo and especially with QLEX. In total, we now have approximately 60 Phase III oncology trials, of which 40 are across novel pipeline candidates including our suite of antibody drug conjugates, T cell engagers, small molecules and individualized neoantigen therapy. These diverse candidates are being developed as monotherapy as well as in combination with KEYTRUDA or KEYTRUDA QLEX. And the culmination of the late-phase studies is a result of years of disciplined pipeline diversification, both through internal discovery and strategic business development. We believe that we are well positioned to deliver a steady stream or cadence of meaningful data readout over the coming years and further the impact on patients with cancer.

And with that, I will turn it over to Marjorie.

Thank you so much, Dean. If you think about the portfolio and Dean set up how we think about drug development and the assets in our organization, we think about 3 pillars of biology. And we do that because of the underlying mechanisms of growth and resistance of different cancers and being able to have drugs that can target specific biological pillars, and they can be combined together.

So our immuno-oncology medicines are designed to stimulate anticancer immune responses. These include KEYTRUDA QLEX, our investigational INT candidate and our PD-1 VEGF bispecific. Precision-targeting agents are designed to impact pathways that can derive cancer growth. This includes caldorasib, our investigational KRAS G12C inhibitor, which recently received breakthrough therapy designation in the first-line non-small cell lung cancer setting; as well as several agents from our growing hematologic portfolio, which I'll further touch upon later in the presentation. Finally, tissue targeting, which includes antibody drug conjugates as well as T cell engagers. These are designed to target chemotherapy and immune cell activation to tumors while attempting to mitigate effects on normal tissues.

The reason we've organized around these goes directly to our strategy. And so to have the maximum benefit for patients and meeting the needs of these patients as well as clinicians and society is we know that the best outcomes in oncology how when you give multiple drugs together or are the different mechanisms resistance for the heterogeneity that exists in most cancers combinations have had the best outcomes long term. And we've seen that for many of our KEYTRUDA studies with multiple diseases and multiple combinations. And so we want multiple mechanisms to have the best benefit.

We also want to develop agents, therefore, that have single agent activity that are active in and of themselves and that are combinable because that will give us the best opportunity to help the most patients with a specific kind of malignancy or a subtype of a malignancy. And we can have diversified regimens also that potentially can go across multiple tumor types depending upon the targets and the mechanisms of action.

We also want to improve the therapeutic index of our medications. That is to be able to help a physician and a patient understand for a specific tumor that a person might have, is there a biomarker that could predict benefit of therapy because every time someone is treated, a physician can tell someone, we'll hear the odds that someone like you might benefit from a therapy. But knowing for that individual sitting in the chair in front of you, it's often very difficult. We're talking about statistics. And as a person who sees a physician, that's really uncomfortable place to be. So if we can develop targeted therapy diagnostics, that will be really helpful to find those patients most likely to respond.

And critically, we want to bring these drugs into earlier stages of disease, as Dean talked about with what we've done with KEYTRUDA. And it's because we can have the greatest impact there. We can help the most number of people with cancer if we can treat the disease as early as possible, whether it is in the first line or second line setting in a metastatic disease or if it's in the potentially curative setting in the adjuvant or perioperative space.

So we take these 3 pillars, and we created diversified regimens that can be delivered generally across multiple tumor types. And so I'm going to start the update with one of the drugs that can do just what I talked about, which is a sac-TMT. It is one of our broadest programs in our pipeline. This is an antibody drug conjugate that we brought in through our partnership with Kelun Biotech. It's a differentiated Trop-2 antibody drug conjugate with a belotecan-derived hopizomaras1 inhibitor payload.

What we're particularly excited about is the bifunctional linker technology that's proprietary and is quite unique for the Trop-2 ADCs that are currently in clinical studies. This linker is designed with the intent to maximize payload delivery due to its very stable irreversible connection to the antibody. This is intended to prevent the payload for breaking off the circulation. There is a pH-sensitive connection that ensures intracellular payload release in tumor cells. There also is the allowance of the structure for bystander effect. The stability of the linker also enables a drug-to-antibody ratio of somewhere between 7 to 8, we say 7.4 to be very precise. But it's a very -- for the stability of the linker, this is a very high DAR when you look at other antibody drug conjugates. And so based upon its design and the compelling data generated so far, by our partners at Kelum, this has the potential to be a cornerstone antibody drug conjugate across a variety of different cancers.

So one such data set was the data you've seen at ASCO this year from OptiTROP-Lung05. This is a Phase III study conducted by our partners in China. And the study enrolled people who have non-small cell lung cancer, it could have been an adenocarcinoma or squamous cell carcinoma, with expression of PD-L1, 1% or higher, locally advanced, better as inoperable or metastatic non-small cell disease. These are people who had no prior systemic antitumor therapy, and they were randomized to receive monotherapy pembrolizumab or the combination of sac-TMT and pembrolizumab. The combination of sac-TMT and pembrolizumab provided a clinically meaningful and statistically significant improvement in progression-free survival by blinded investigator, blinded central radiology review in the overall study population.

This benefit was very consistent across subgroups. We're including those who had PD-L1 high expression, those with lower PD-L1 expression, squamous histology, non-squamous histology, age across all of the different categories, there was consistent benefit. And the intent-to-treat population, noting that this is very immature follow-up at this time, there is an OS trend observed noting again, it's very immature. And so no definitive conclusions can be made about that data.

But it's really exciting. It is. And particularly, we consider other Phase III data sets coming out of China and similar populations. It helps to demonstrate the promise of sac-TMT combined with pembrolizumab in our global trophuse 007 program, particularly trophus 007, we are conducting for participants who have non-small cell lung cancer whose tumors have a TPS score of greater than 50%.

We have other global Phase III studies in non-small cell lung cancer underway. The OptiTROP-Lung05 study adds to the growing body of data generated by Kelun Phase III studies. You're now seeing multiple proof points across well-conducted, randomized clinical data sets in multiple tumor types, including lung and in breast cancer. Most recently, Kelun announced positive results from OptiTROP-Breast03 study in the first-line triple receptor negative breast cancer space a few weeks ago.

Many of these proof points tie directly into studies that we have ongoing in our global TroFuse program. It is this collaboration we have a Kelun that allows us to expand and go into so many tumor types with confidence.

Our TroFuse development program is broad, and we think it's differentiated. TROP2 is highly expressed across multiple tumor types. And we've designed Phase III studies in tumors where there's an opportunity for us to meaningfully impact cancer care either with a differentiated development profile or where we can be a first mover.

As you see, we are advancing studies across gynecologic, breast, lung, gastric and bladder cancer spanning from mid- to late line in some settings, but mostly in the earlier stages of disease. We are also pursuing maintenance regimens in several of our studies. And many of these indications, these are first-mover opportunities in the way that we have developed our Phase III program.

In keeping with our strategy to improve the therapeutic index of our assets, we have a robust biomarker strategy in place for sac-TMT. We have a broad development plan; not every tumor may benefit from enrichment. The data that we've seen with our biomarker development conducted during our extensive Phase I/II studies in collaboration with our partners in China, has guided the implementation of biomarkers into our Phase III program.

I'm very pleased to share that TroFuse-005 is the first positive global Phase III for sac-TMT that has been conducted by Merck. This study demonstrated a statistically significant and clinically meaningful improvement in both progression-free and overall survival of certain patients with endometrial cancer. This is the first TROP2 ADC to show improvement in overall survival and progression-free survival compared with chemotherapy in certain patients with advanced or recurrent endometrial cancer and is the first ADC to have randomized Phase III data in this setting.

Endometrial cancer is the sixth most common cancer in women and it's increasing in incidence. There's significant morbidity and mortality, particularly in late-line settings, and there is no standard of care in majority of patients whose cancer progresses despite the use of I-O therapy like KEYTRUDA and chemotherapy. This builds upon our expertise in the disease where we have 2 -- we have innovated with therapies, including with KEYTRUDA. And we're excited about these results. We will be talking to health authorities, and you'll see the data at an upcoming scientific presentation in the near future.

sac-TMT is one of the 8 antibody drug conjugates that we are excited about and having clinical development today. We have one of the largest and broadest ADC portfolios in late-stage development and covering important cancers. Our ADC pipeline brings a diversity of targets, bispecifics and linker payloads. This provides potential opportunities to improve outcomes for patients and create unique combinations.

Now I want to move on to another important part of our portfolio, which is MK-2010. In addition to building upon tissue targeting therapies such as sac-TMT, where over half of our studies are being done in combination with IO therapy with KEYTRUDA, we are also building out immuno-oncology with MK-2010, which is our PD-1 VEGF bispecific antibody.

We publicly presented data for the first time from a collaboration study that was initiated by LaNova, and this was presented at AACR this year. The study demonstrated clinically meaningful data for MK-2010 as treatment for certain patients with advanced non-small cell lung cancer. For those in the first-line treatment-naive setting, the unconfirmed objective response rate was 55% among 11 previously untreated patients with PD-L1 positive non-small cell lung cancer at the 20-milligram per kilogram dose.

And what I like to look at is the waterfall. The majority of patients show tumor control or shrinkage. The safety profile of MK-2010 is consistent with what's observed with this new class of assets and allows us to be able to develop this drug potentially both as monotherapy and importantly, in combination with other drugs in our portfolio. We believe we are uniquely advantaged to fully explore the potential of the PD-1 VEGF access. While KEYTRUDA is central to our experience, much of what we have learned comes from combining it with different therapies and different mechanisms of action, including VEGF inhibitors. Although we are not sharing specific development plans today, as Dean noted, we are operating from a position of strength given the breadth of the studies we've conducted across multiple therapeutic classes.

In addition to the external knowledge about VEGF inhibitors and as emerging data comes about bispecifics, we have meaningful experience of our own. We have conducted multiple studies of KEYTRUDA combined with VEGF inhibitors, including Avastin combinations that have led to approvals beyond our own experience with a portfolio of novel agents that offer combination opportunities oriented towards combinations of the future rather than adding on to today's current standard, including ADCs like sac-TMT. Together, our experience plus our portfolio provides a strong foundation as we plan MK-2010 development across multiple tumor types in a rapidly evolving oncology landscape.

So now let me turn to our innovative hematology portfolio. You have seen our recent announcement about the acquisition of Terns Pharmaceutical, which brings us TERN-701. This asset further expands the portfolio in hematology despite multiple approved tyrosine kinase inhibitor, significant unmet need remains for improved efficacy safety and convenience for certain patients with CML. The team at Terns did a fantastic job of developing a highly selective, potent oral allosteric BCR-able tyrosine kinase inhibitor designed to improve upon prior generation TKIs. It's high target selectivity potentially enables higher dosing while limiting side effects supporting improved therapeutic index.

In a Phase I study, TERN701 demonstrated major molecular responses that are approximately 2x and deep molecular responses that are approximately 2 to 3x of those approved -- those compared to approved TKIs and historical data sets. We are very excited about this asset and look forward to advancing it into late phase development.

With TERN 701, our hematologic oncology portfolio now includes 5 assets that may be used across a variety of different hematologic malignancies in keeping with what our strategy is for Merck Oncology. Nemtabrutinib is a potent noncovalent BTK inhibitor designed not only to bind reversibly to BTK. But it also had activity against other kinases and is designed to help prevent some of the common resistance mutations that occur with covalent BTK inhibitors.

Bomedemstat is an LSD1 inhibitor. This is a mechanistically exciting drug with potentially disease-modifying effects in chronic diseases like essential thrombocythemia and polycythemia vera.

Zolibertimab vedotin is a ROR1 ADC currently ongoing in Phase III trials in diffuse large B-cell lymphoma, including a head-to-head study against Polivy. We have seen activity in GCB and non-GCB tumor cells and diffuse large B-cell lymphoma. We also have seen activity of ZB both as monotherapy and combination, and we are excited about the progress of this program.

MK-1045 is a CD19 T-cell engager potential utility not only in ALL, but across other hematologic malignancies.

And then TERN 701 rounds out our portfolio.

So again, thinking back to our strategy, the same principles apply here. We have created and curated a hematology pipeline of drugs that have great potential as a single agent and combination.

And then finally, let me provide you a forward look at the readouts you can expect from our innovative pipeline. We're excited about the portfolio. We have assets with compelling activity that have led to approximately 60 Phase III studies in our late-stage portfolio. That excitement and commitment to patients is leading to a series of readouts you've already started to see starting with TroFuse-005 in endometrial cancer. And we have a PDUFA date in October for IDXD, an extensive stage small cell lung cancer. There is a steady cadence of readouts extending through '27, '28, '29 across 10 new assets, reflecting the diversity of the portfolio and the broad reach we have.

I will now turn it over to Jannie to talk about the commercial opportunity.

Thank you, Marjorie. It's a pleasure to be here I have the privilege of addressing you in my new role as President of our Oncology business unit and Human Health International markets at a time of significant progress across our oncology portfolio. Our dedicated teams have established a leading franchise around the world. We continue to execute with excellence across multiple tumor types, driving patient impact and access to our important cancer therapies in over 100 markets. We have reached more than 4 million patients worldwide with our oncology medicines. Our suite of oncology products is approved in 58 indications across 25 tumor types, including 2 tumor-agnostic indications.

This portfolio provides a strong foundation for the broad range of opportunities Dean and Marjorie outlined. Our research colleagues continue to deliver compelling clinical advances, and we are excited by the reach and competitive pipeline. Importantly, the commercial organization, both in the U.S. and globally, is in place to deliver on that opportunity and further improve outcomes for patients. Today, I'll focus on the near-term programs, we're advancing with the same discipline and urgency that help establish Merck as a leading oncology company. I'll close with our long-term commercial aspirations for our broad and diverse late-stage pipeline.

We remain confident in the outlook for KEYTRUDA, supported by continued momentum in earlier stage indications and ongoing strength in metastatic settings. Sales from early-stage indications represented more than 25% of total revenue in 2025 and are expected to increase further. Indications approved in the last year, including in certain head and neck, ovarian and -- bladder cancers will drive a large portion of growth. And there remains potential opportunity for additional new indications both in earlier stage and metastatic disease.

We have built a strong presence in GU and women's cancers underpinned by the robust data KEYTRUDA continues to generate. By 2028, we anticipate that roughly half of KEYTRUDA's revenue will come from women's cancers and GU, reflecting the breadth of our clinical program spanning TNBC, multiple gynecologic cancers, RCC and bladder cancer.

Our commitment to innovation and addressing the unique needs of patients and health care systems extends to KEYTRUDA QLEX, our subcutaneous pembrolizumab with berahyaluronidase alfa. The launch is off to a strong start. In the U.S., we have seen a good acceleration in adoption since the establishment of the permanent J code on April 1. The adoption rate exiting the first quarter was in the mid-single digits, supporting our confidence that we are on track to achieve 30% to 40% peak adoption by the end of 2027. As expected, the majority of adoption is in patients who are on monotherapy regimens or combinations with other oral therapies.

A recent U.S. label update includes data evaluating patients' preferences between subcutaneous administration of KEYTRUDA and IV KEYTRUDA. Results showed 65% of patients preferred KEYTRUDA QLEX over KEYTRUDA IV where the most common reason being less time spent in the clinic. Outside of the United States, we have received approvals in the EU and U.K. and some other markets. We have made good progress in certain markets and expect launches in additional markets later this year. We anticipate 30% to 40% peak adoption on average globally, with peak penetration varying by market. We continue to be pleased with the impact we are having on certain patients with RCC and other VHL-associated tumors with WELIREG. We look forward to launching 2 additional indications for WELIREG later this year. The first one is LITESPARK-022, the combination of WELIREG with KEYTRUDA in adjuvant RCC, and it has a PDUFA date of June 19 this year. This builds on the foundation set by KEYTRUDA monotherapy based on the KEYNOTE-564 study, and if approved, would be the potential first IO combination treatment option in the adjuvant RCC setting. The study demonstrated meaningful improvement in disease-free survival.

The second one is LITESPARK, the combination of WELIREG with LENVIMA in certain previously treated advanced RCC, and it has a PDUFA date of October 4 this year. This is the potential first and only HIF2 alpha inhibitor plus a VEGF TKI regimen for patients whose disease progressed following anti-PD-1, PD-L1 therapy, and a demonstrated superior PFS versus a modern TKI with improved duration of response.

With these new opportunities in RCC as well as the future potential in combination with zanzalitinib, we believe WELIREG has multibillion-dollar peak commercial potential.

Next is IDXD, our B7-H3-directed ADC in collaboration with Daiichi Sankyo. IDXD has the potential to address unmet need for patients starting in extensive stage small cell lung cancer. Small cell lung cancer is a deadly, rapidly progressive cancer with high unmet need and very poor prognosis. Approximately 10% to 15% of all lung cancers are small cell, and about 70% of patients are diagnosed with extensive-stage disease. Unfortunately, the 5-year survival rate remains just 4% for those with distant metastases.

The FDA has granted priority review for IDXD in certain adults with previously treated extensive stage small cell lung cancer and set a PDUFA date of October 10 this year. This marks an important step for this potential first-in-class therapy.

Beyond extensive stage small cell lung cancer, we have ongoing registrational trials in second-line esophageal squamous cell carcinoma and metastatic castration-resistant prostate cancer, which represents a much larger patient opportunity. We're also exploring the combination of IDXD with [ galgatamine ], our T cell engager, also in collaboration with Daiichi Sankyo in small cell lung cancer.

As Marjorie described, our development program for sac-TMT is extensive and primarily focused on populations where we aim to be first-in-class. We are also exploring opportunities where we will be competitively advantaged due to the differentiated clinical profile of sac-TMT. Here, we outline the patient opportunity for each -- for each potential indication. The breadth of this program underscores why we believe sac-TMT has the potential to be a cornerstone ADC across a variety of different cancers. sac-TMT is being evaluated in the broadest range of disease and treatment settings of any TROP2-directed ADC with studies across early to late-stage disease in more than 7 tumor types, representing up to approximately 200,000 patients in the U.S., EU and Japan.

Building on Marjorie's comments, I want to emphasize the significance of the TroFuse-005 results. Patients with metastatic endometrial cancer have a medium overall survival of less than 1 year after progression on platinum chemotherapy, and there is no standard of care for the majority of patients whose disease progresses following IO and chemotherapy. sac-TMT is the first and only TROP2 ADC to demonstrate an overall survival benefit in endometrial cancer compared to chemotherapy in these patients with advanced or recurrent endometrial cancer. An approval would further built on our deep expertise in gynecologic cancers, we already have multiple indications and reinforce sac-TMT's role as a potential transformational therapy in this space.

We are building from a strong foundation as we advance the next wave of oncology innovation. We continue to see greater than $25 billion in nonrisk-adjusted commercial opportunity from our oncology late-stage pipeline alone by the mid-2030s. Importantly, this does not include the recent acquisition of Terns Pharmaceuticals, which has multibillion [indiscernible] commercial potential on its own. Over the coming years, we have the opportunity to bring 14 new products to market for the treatment of cancer across more than 80 new indications. As our product mix diversifies, we expect to establish a meaningful presence in hematology, building on our leadership position today in solid tumors.

In summary, we are highly confident in our oncology position and believe our strong presence will extend well into the next decade. With that, I'll turn it over to Dean for closing remarks.

So thank you so much for your attention here. This evening, we spoke to how we have executed on our oncology strategy, building on our strong foundation with KEYTRUDA while advancing an increasingly diversified pipeline of oncology candidates. In total, as you've heard, we have approximately 60 ongoing Phase III trials at this moment. I would imagine more will be opened. The broad impact of KEYTRUDA right to road map for the future as we develop molecules spanning 3 pillars of biology, immuno-oncology, precision targeting as well as tissue targeting, especially with ADCs.

Now we're deploying these candidates with the goal of maximizing benefit risk and convenience to patients while providing exceptional value for payers. Hopefully, today's presentation has contextualized our strategy and how we prosecute clinical trials. We believe that we are in a strong position to further improve patient outcomes in oncology.

I just want to emphasize that we're here at ASCO, and we're focusing on diversifying in oncology. But we've also said in 2021 that not only do we need to diversify oncology, we have expanded in other therapeutic areas. And I just would emphasize the cadence of readouts that you've just shown, especially what Jannie showed in the last is happening in the other therapeutic areas as well, in cardiometabolic with WINREVAIR otovir and the potential approval of elicitide and the follow-on compounds that follow that in immunology with tolasocopart as well as other immunology assets moving forward, especially in ophthalmology, where we have 2 assets moving fast. And in HIV, we've increasingly shown islatravir as a backbone. So I think this concept of us diversifying and expanding our pipeline since 2021 is important and relevant, not just for oncology, but also across other therapeutic areas and spanning multiple modalities, including small molecules and vaccines, macrocyclic peptide and complex and conjugated biologics.

And with that, I will turn it over to Peter for questions and answers.

All right. Very happy to take your questions. If you could state your name and your firm when asking your question, that would be helpful. So maybe Chris Schott to start.

Great. Just maybe a 2-parter on VEGF PD-1. Maybe just first, if you can just provide some context of your view on the data we saw at this conference and how that informs your approach as you consider development programs for 2110.

And then just when we think about that development program, do you think we've had enough derisking of the mechanism where we should think about Merck running a broad set of studies in a wide range of indications similar to what you do with TROP2? Or is this an approach where we could think about maybe a more gradual approach? I'm just -- I know you're not disclosing it, but how to think about that.

Loss of clinical development speak to that Marjorie.

No, no. Thanks so much for the question. I think we are all eagerly awaiting the data presentation of the HARMONY 6 data. And I want to congratulate the investigators and so for running a well-conducted study. With this -- the impact it has is that -- I think it's increased excitement, but also has left a lot of questions still remaining. And that's what I think your question is getting at.

So what was impactful to see was that I think that the hazard ratio for PFS have been 0.6. And unlike the other VEGF checkpoint inhibitor historic studies of chemotherapy combining with IO VEGF, the hazard ratio here was very close to the PFS hazard ratio. And this would actually include HARMONY 2, which had both squamous and nonsquamous in there that hazard ratio that had a much larger drop than you saw here.

The other thing that stands out is the AE profile was what was expected generally for adding in another mechanism, chemotherapy plus a checkpoint inhibitor, now will have a little bit more toxicity than the chemotherapy alone or a checkpoint inhibitor alone. And then you're adding a VEGF inhibitor on top of that, albeit the therapeutic index for safety does appear to have improved a bit with this particular kind of structure and formatting.

So the AE profile is what's expected. It was tolerable, had low rates of discontinuations and no surprising adverse events were noted.

They were very careful in how they talked about patient selection for this because of the historical challenges Avastin had in this space. So particularly in talking about cavitation, about blood vessel involvement. There also was an age cap of over 75. And we know that this is not a disease squamous cell -- non-small cell lung cancer is not a disease of young people. It's a disease of people who have been smoking heavily in their life and often older. I think in the United States, the median age for this might be around 70.

So there -- and when you look at the hazard ratios, for both PFS and for OS, they are not comparable by age. So I think it's clinically compelling. The curves. There's -- they overlap, then they separate.

Open questions. Does this translate into an older population? What is the reason that you have differences in outcomes and robust sample sizes for those younger than 65 and those older. Is there an AE profile? What's going on there? Is this sort of a random chance? It's not known. And the median follow-up is before that really -- you don't know what the OS is going to end up being because of the amount of censoring. It's still fairly early. So are those curves going to stay apart? Or are they going to start to come back together with time? And that's always been this open question when you look historically at the majority of studies that have been conducted with VEGF inhibitors and checkpoint inhibitors in non-small cell lung cancer.

So I dissected it, and the question is sort of what does that mean. And I think what it shows is that there are likely situations where the PFS will translate into a clinically meaningful overall survival. I would like to see this replicated in a global study. There -- the Chinese investigators do an amazing job of running really clean studies. And so I want to see this in a global study and what the data will look like.

The other open questions, you still have heterogeneity results and other tumor types. As far as the -- even in non-small cell lung cancer, if you think about the different HARMONY studies and the shapes of the curves and the hazard ratios, they're not as consistent as this. So to me, that means that there's still open questions about, is this something that will truly unlock benefit everywhere you have seen a VEGF inhibitor work and a checkpoint inhibitor work. And I think the answer is still we don't know.

But this is a positive finding, I think, it's great for patients in China, as I discuss and said. And for us, we've always in all of our studies and everything we do, including our sac-TMT program, we have a disciplined and very data-driven development program. And so we use all of those studies that you saw us flash up looking at all of our knowledge about VEGF inhibitors and checkpoint inhibitor KEYTRUDA combinations, we look at the emerging data. And then we're also thinking about the future because we're very excited, for example, about the OptiTROP-Lung05 data. We're excited about our KRASG12C program. We're thinking about what therapy is going to be looking like in a couple of years, not what it looks like today as we're developing our plan. We have a Phase III-ready asset with MK 2010.

Daina?

Daina Graybosch from Leerink Partners. In the -- in Kelun's OptiTROP-Lung05, I thought sac-TMT plus pembro looked pretty competitive when you compared it indirectly the pembro plus platinum-based chemo, both in 407 and 189. And I wonder what's holding Merck back from starting a head-to-head study with sac-TMT versus 189 and 407 beyond maintenance for 407?

So I'm going to turn this to Marjorie, but I will comment about many of my interactions with many of you over the last 2 to 3 years. And I would just sit there and I just would remind that when we first moved in sac-TMT, I think many questions were asked of why are you coming in to TROP2 ADC when there's 2 ahead of you. And I think what we said there is we don't think all the TROP2 ADCs are the same, just like we don't think all the HER2 ADCs are the same.

I think the other sort of thing that were remarked to us is that we thought that if you could get it right, you could be first in lots of tumors outside of breast and lung. And I think the endometrial data suggests that, that may be possible.

Now the question is because people said, well, you guys blew this out in 17. I've actually gotten questions of why did you blow it out so much. And now I understand your question is, why aren't you blowing it out further? Is that what I understand?

So with that, I'll turn it over to Marjorie.

Yes. No, thanks for the question. And I said our strategy, we are always looking to where we think cancer therapy is going to be. And so thinking back to when we started our program, we recognized from data in 507 and 189 from emerging therapies, and just biologically, we know that lung cancer is not one disease. And there is going to be increasing fragmentation of non-small cell lung cancer, including those who are eligible for KEYNOTE-189. And so we tried to think about where could we add the greatest value, considering that those who have non-squamous cell lung cancer have -- often have the RAS mutations, and that's going to be more subdivided into different therapies. There was the biggest opportunity for those who had squamous carcinoma and needed something to help give them long durable remission. That's what's led to that program.

The other one, TroFuse 007 was based upon -- there are people who don't want to give chemotherapy necessarily to everyone because they're not certain it's going to add benefit and high expresser PD-L1 scores. And so we wanted to show that, yes, we could do that. And again, further help to characterize different opportunities for clinicians and patients of how you could use this drug.

We didn't have the OptiTROP-Lung05 data when we were designing our program. And so we get had to think about how is the clinical practice going to change and recognizing where peer companies were how do you want to develop.

The other thing to consider is that there can be approaches where you combine ADCs and chemotherapy together. So if you're going to do a 189 head-to-head and try and take these populations together and to sort of replace, it is that you want to ensure that you've got really robust efficacy and some people have taken, let's combine chemotherapy in the ADC together. And there is one potential replacement study that's out there. But the combinations of therapy, when you look at other ADC chemotherapy combinations and some of the ones done in lung cancer, the response rates have not increased, suggesting the benefit may actually be the maintenance approach.

So are you going to get more toxicity? Are you going to impact the doses of either the ADC or the chemotherapy by combining them together and then adding a checkpoint inhibitor. And so I think our maintenance approach is where we think the biggest benefit is going to be there from what we knew when we started that study.

I don't speak to the future too much because it's a highly competitive environment as Angus who's in the room talked about in his Veropharm article. But I do think that it is important for us to look at our portfolio and look at

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the data generated in China to what we get in the global study. And I think one of the things I'll say is someone who's worked on antibody drug conjugates in 3 different companies is they are fairly consistent when you look at response rate, duration response and that translates into overall survival often. And so I can't forecast, as Dean said, what the TroFuse-005 study looks like. You'll have to wait until we're presenting it publicly, but it's compelling data that we think that we were able to have confidence in from the Phase II data enough to start the Phase III.

Great. Thanks, Steve. Michael Yee.

Michael Yee from UBS. With sac-TMT, it would seem to me that, obviously, you have the potential to also combine with a PD-1 VEGF. To what extent are you generating data either with 2010 that you are observing? Or that your partner Kelun in China is also generating data with sac-TMT with other novel agents including other PD-1 VEGFs that could be generating data that you could be learning from?

Yes, it actually gets a little bit to -- I think it was Courtney's question, is when you ask us what future looks like, one of the things that we ask ourselves is what will the future look like for a PD-1 in relationship to sac-TMT. And so that's something that, clearly, has been on our minds and clearly on the minds of our partner, Kelun, as well. But with that, I'll just ask Marjorie any comments you wanted to make?

I think that we have not publicly talked about our plans of sac-TMT in 2010. And so I'm going to keep that to myself at this moment. The same thing, Kelun's got their own stuff that they're doing as well. And so there's no public information available this time. Stay tuned.

Great. Thanks, Michael. Maybe in the back, Trung.

Trung Huynh from UBS. So some of your VEGF PD-1 competitors, they're optimistic for PFS-based approvals in first-line lung cancer. If you have a look at all of your TroFuse lung studies, they use OS as the primary endpoint. Is there a mechanistic nuance here? Does the FDA view ADCs differently than IO bispecifics for approval just based on PFS?

And then does HARMONY 6 make you want to move faster? Slower? Or does it not change your Phase III development time lines for this class? I know you mentioned you're not going to share your development time lines, but could we be sat here next year knowing what that Phase III program is? Your peers are accelerating quickly.

I love how the questions come. What I'll first say about the FDA is the FDA in the fields have been reasonably consistent. OS is a really important endpoint. And I would just emphasize, it's not just important for the FDA and regulatory agents fees, the payer who's being asked to pay for antibody-drug conjugates over chemo, they have some say in this. And so we think it's very important to keep that in mind, but I don't know how you want to dance around the rest of his question.

Well, I think the question PFS is a clinically meaningful endpoint across multiple diseases. It really is. And lung cancer, unfortunately, has been a disease where there have not been many really remarkable advances until maybe the last 10 to 15 years. And so people have wanted to see overall survival improvement. As outcomes get better and better, it becomes more difficult to actually demonstrate overall survival. And so there may be a future where PFS could be considered in the United States as the only endpoint needed as long as you can show lack of detriment. You're not hurting people with the OS and that people are getting some benefit there. I don't know that we're there today.

And if you think about antibody drug conjugates, they are much more potent cytotoxics that are given directly to the cancer cells than IV chemotherapy, and you would expect a profound PFS benefit that, hopefully, would translate into overall survival. And so I think that there our differences and studies and endpoint somewhat based upon the timing and the initiation of the studies rather than a fundamental belief in the mechanistic action of different drugs.

And as to your second question of how excited I am or the speed at which I'm going there, we are -- we have a Phase III-ready asset. We are data-driven. We are disciplined. We have a great portfolio that can be combined with and you'll have to stay tuned.

Carter?

Carter Gould, Cantor Fitzgerald. Dr. Green, you alluded to your biomarker strategy for, I believe, for your TROP2. Can you provide any further detail there and how you're thinking about deploying that? There's additional work that needs to be done before we see that rolled out? And any details particularly around differentiating versus some of your competitor approaches with their -- there were biomarker strategies in the space.

Yes. So I'll just say something and I'll hand it to Marjorie. I think it's important that we have -- that one has a biomarker plan and a biomarker ability, but that biomarker ability can be broadly distributed, especially in the United States and Europe and other places. But the other sort of thing I just want to emphasize what Marjorie said is that just because you have a biomarker, it doesn't mean that you're going to use that biomarker in every indication. But with that, Marjorie?

Yes. No, no. Thank you. We haven't been as public about our biomarker plan as some peer companies have been in talking about what they're doing. And we have extensive IHC capabilities that through the very large development program that we've done with our partners in China, you also might have seen some of the digital pathology information that has come out at ASCO this year that we are working on. And so as Dean said, it is not a one-size-fits-all approach. And I think it underlies the mechanism of antibody direct conjugates and how you're trying to predict response because there are multiple pieces that go in. And each company's drug is different, the ADCs are different and how you might approach selections difference as the antibody against the target, how well does it internalize, what does the linker payload do? What is the expression level on different tumor cells? How effective is the bystander effect? How much efflux pump is there in a particular tumor type? All of those can change response and therefore, prediction of response may vary tremendously based upon the ADC. So I can say is that, that probably gives you -- I can't tell you because the drugs are different. The biomarkers are different. The tumors are different. The settings are different. And so it depends that we are well set up in our ongoing Phase III studies.

Courtney?

Courtney Breen. Just a question on the heme portfolio that you characterized on the slides today. This hasn't necessarily been an area that Merck has been in commercial markets with in the past. And certainly, you've done some deals recently that perhaps others had stepped away from. And so I would love to understand kind of why is now the right time for Merck to succeed in this space? And why are these assets going to set you up for success here, particularly given kind of some others have accelerated past you, thinking about Lilly with potabritinib and some of the others as well. So I would love to just hear a little bit about why you believe now is the right time for Merck?

I'll let her -- Marjorie touch on the different assets, especially the ones that you mentioned. And then I'll make some comments in relationship to our ambition to move into heme, especially after -- we felt that it was a really important place for us to make a good foray in because it's such an important part of oncology.

Yes. No, thanks for the question. Each of the assets, we think, is compelling and the -- has the ability to make a meaningful benefit for people with different hematologic diseases. And many of these diseases are ones that are often chronic in nature. And so thinking about different assets such as like [indiscernible], this is a drug because it has a slightly broader kinase activity and it also has a bit of a flexible binding that can adapt to different mutations. Preclinical studies have demonstrated that there are low rates of development of resistance in the target over time when compared to other laboratory animal model studies of other assets and what's been published, for example, in [indiscernible] 1. And so it's that kind of what can you get from that is potentially people do not develop resistance. And with the mutations of the binding site that then allows for treatment across multiple lines or the preserved ability to continue to use a drug like nertinib. And so that was what was really interesting to us about it.

I think that our studies also were done to truly because this is a disease where people have been using sometimes the same therapy since the first-generation drugs for a long, long time, and they haven't moved off of them, to really make sure that we are comparing against what is a first-line standard of care. We didn't combine multiple populations into a study and try to sort of say this works. So we really took a very different development approach to reflect the practice of physicians and the needs of the patient. So that's why we're excited about [indiscernible] and why we've developed there.

Very similar considerations have gone into the other assets. So I talked about Zolibertimab from vedotin. And Polivy is a similar drug, different target that's already approved. But we saw that in some of their initial Phase III data sets that the majority of benefit was in one subpopulation of its large B-cell lymphoma, whereas ZB works in both. So those are the kind of approaches that have led to our development and why we continue to be excited about the portfolio.

I do want to pick up on one of the things that you asked, which was from a commercial standpoint. And I think it's appropriate that Jannie make a comment because Jannie's experience and solid tumor in this, we are making a foray in heme both benign heme and heme malignancy. And I think I should turn it over to Jannie.

Yes, thank you, Dean. And I would just say, we've always had an ambition to diversify beyond KEYTRUDA, right? And we're doing that in solid tumors. We've always -- and Sophie can speak to this as well, it's been an ambition to also diversify into heme malignancies. We know it is different to solid tumors, but it is adjacent. We believe that we have significant capability that we can scale across hematology as well. And again, I think even though we had the ambition, we move with the science, we move with products that we think is going to bring meaningful value. And I think we now have 5 assets enhance that in and that can take us down that path. So I don't know if there's something that you would add.

I think I think to your point, we have now critical mass in terms of hematology to be able to build the commercial organization. We are looking at a disease over a large value pool like CLL over DLBCL, but also in an area where there has been no innovation like essential [indiscernible], and we believe that we can kind of shape the market with new and effective therapy

But also in relationship to your question, I would just emphasize, when we're talking about we're trying to give you a sense of the cadence of data readouts. I mean, I think we have listed 3 PCD dates in 2027 for heme assets and then an additional one in '29. So we're trying to lay out -- these are coming and you'll see it, and it's coming sooner than I think many people recognize.

Great. Jason?

Great. Jason Gerberry, Bank of America. So I just have a question on OptiTROP-Lung05 and I preface by saying feedback we hear from a lot of oncology KOLs is reluctance to subject patients to maybe ADC toxicities in the PDL high segment. So I'm just curious if you can speak to in OptiTROP-Lung05, any color on the management of the AEs through support of care, be it either anemia requiring transfusions or any prophylactic measures with stomatitis? And then if those measures are implemented in the counterpart TROP2 study?

Yes. Thanks for the question. Benefit and risk are always critical for the patient and the oncologist, and we agree with that. And the reason you would want to consider something beyond KEYTRUDA in this population is that while survival is good, there's still a lot of people who, unfortunately, have progression and die with high PD-L1 expression tumors. So antibody drug conjugates are still cytotoxic therapy in the current generation that are out there. And so they will have cytotoxic activity or side effects. And most of them are related to where there's expression of TROP2, so you get GI toxicities with them or it's related to some small circulation of the payload, and that's where you're getting some of the hematologic toxicities.

These are toxicities that physicians are very, very comfortable in managing. In the OptiTROP-Lung05 study, the AE rate reporting, so the way AEs are reported in China studies, is that all hematologic labs are reported as adverse events, whether a physician thinks they're clinically meaningful or not. That doesn't happen necessarily in global studies. There was no use of primary growth factor support in this study for mouth sores for stomatitis in China. They do not routinely use steroid mouthwash. They'll use baking soda mouth rinse, oral hygiene, other kind of care events, and have, in our global studies, we are very aggressive with secondary use of growth factors as well as mouth care, including oral stomatitis management because the study was started a while ago, and we've learned and have really adapted.

I think there is a question that people sometimes ask about, will AEs in a China study be the same as you would see in a global study. And you can look at there are other TROP2 ADCs, who have very similar rates of stomatitis and as well as low grade and most of them are thankfully low grade as well as Grade 3, and they're fairly consistent across most of the studies.

So it's going to be -- does this affect quality of life? Are people going to be able to take it? And I think with these kinds of adverse effects, particularly low-grade ones that, yes, hematologic ones tend to not be disruptive for the patients. And it's that benefit is the PFS and OS there for these patients, and that's what will change instead of just using KEYTRUDA as a monotherapy.

Jon Miller.

Jon Miller from Evercore ISI. I'll ask a question about something else big at this conference that we haven't talked a lot about, and that's the RAS space. Dr. Green, you mentioned, do you expect to see, for instance, lung get more and more fragmented. You specifically called out RAS is a potential population where that's going to happen. But when I look at your pipeline, I see a relatively thin list of of assets in that space compared to a large list of assets in development across the field. So what are your plans for RAS? How do you think that is going to develop in lung and beyond? And when can we hear more from you about the [indiscernible].

I'm going to take a first shot and then give it to Marjorie, but I just would just -- when one thinks about the RAS space, it may be reasonable. RAS is in so many tumors. But a simple way to think about is think about lung, pancreas and CRC. The first movers in RAS were really important in G12C. I think that some of you have asked, why are you doing a RAS program. And the concern that we had back in 2018, 2019, was whether those RAS molecules could really survive the ability to get into first-line lung. And this goes to one of the comments that Marjorie says, combinability is critical. So the quality of your molecule and the combinability, in that case with a PD-1, is critically important. So we have a study that Marjorie will talk about, which is we're hoping to lay that down in first-line lung for G12C, which will be important.

We also look at the G12C and ask ourselves, what does it teach us about other tumors? G12C is not prevalent in pancreas, but it is, in some sense, in CRC. So the ability to see, even in a small percentage, what that monotherapy looks like and how well it combines with the other medicine that's not PD-1 in that standpoint, it's cetuximab. And so that data is coming out. We believe that we have to be outside of G12C clearly, and we have an asset 4716 that is advancing with pace. We -- the way I would simply say it, it's a non-G12C broader RAS molecule. We haven't cleared what it is exactly, but that's moving at pace in clinical development as well. But I think it would be worthwhile to give an update of how you look at that data, especially the ones that we hope to advance, especially in G12C and first line in lung and in CRC.

Yes. No, thank you so much. I think Dean really highlighted what -- how we've been thinking about this, and it does fit in with our strategy is that to have the best effect, you need to be able to combine and caldorasib, and you saw the breakthrough therapy designation. I talked about it has really well-tolerated AE profile combined with pembrolizumab. And the activity is compelling. And so we have a series of Phase III studies in non-small cell lung cancer. We have one in those who have TPS scores greater than 50% [indiscernible] 004. And then we also have one with QLEX combined with KEYTRUDA QLEX where we are going head to head against the 189 regimen because we are so impressed with the tolerability combinability, the importance of hitting a driver mutation with a very potent and clean targeted therapy. We also have studies in the adjuvant setting and in unresectable non-small cell lung cancer.

And then because this is combinable and you might have seen the data in colorectal cancer, we have pretty robust monotherapy activity with our G12C inhibitor compared to some of the peer assets that have published information. And when we combine with cetuximab and chemotherapy, the responses are quite robust and durable. So we have a study ongoing in colorectal cancer.

So we have a broad development program there. And as Dean said, we have MK 4716, but we're not talking about it yet. So this is an important pathway. We want to make certain that we've got assets that meet those characteristics of being single agent active and combinable to ensure that we are improving therapeutic index and ability to benefit patients.

Mohit.

Mohit Bansal from Wells Fargo. Before I start, first of all, congratulations on the data. Since I congratulated, I can ask 2 parter probably. So the question is, so since you talked about combined ability, I think how do you think about the combined ability of the top 2 ADC and VEGF PD-1 here? And when you think about the combinations in the future, I mean, yes, you have a Phase II-ready asset in VEGF PD1, but the competition is a few years ahead. How would you think about partnering your sac-TMT with other PD-1 VEGF that are out there to get to the market sooner? Because with KEYTRUDA, you did the strategy, you played the strategy where it worked out really well for you. So I just want to understand that part.

So if I understood, the question is when you have a really important compound, are you willing to combine it with other people's compound almost agnostic, a little bit of what we did with KEYTRUDA in some sense. I would say that we're always open to that, and we're always open to that, not just in oncology, but we're open to that in non-oncology where you have really important assets, whether it's WINREVAIR or something like that. So that's something we've always considered. And that's something that, depending on the opportunity.

But having said it, I do think that -- as you specifically talk to PD-1 VEGF, we have a PD-1 VEGF that we're quite confident in, and we have a really good portfolio of ADCs and other compounds that you could combine. And one of the things is when we think about those studies, one has to think about the speed, the rigor and you have to balance off sharing it and owning 100% of that combination, but you always have to balance it. But I think your point is well taken, and it's something we think about not just for our PD-1 VEGF, it's not just what we think about our sac-TMT, but it's with any asset that we have that we think could really have broad implications. So we are open to it and people know that we're open to it. We did it for KEYTRUDA. We will do it for other compounds in our portfolio, and that answer is not just limited to oncology.

Malcolm?

Malcolm Hoffman here for Evan from BMO. TROP2 agents have been more challenged in non-small cell lung cancer. So much of ASCO because this year, it feels like a discussion on how your TROP2 can be both a leader in non-small cell and a better competitor for some emerging PD-1 VEGF agents. Can you talk about, first, why you think we are seeing such efficacy in non-small cell despite other TROP2 failures? And second, what you think we have learned from this ASCO about competitive positioning of sac-TMT versus these other PD-1 VEGF agents?

So I'm going to make a flippant comment that got picked up by some of you, is that correct, at JPMorgan where I said, not all ADCs are the same. Some can be too loose, some can be too tight and some can be just right. And with that, I'll hand it over to Marjorie.

So yes, I think when we first started working with this, I was talking to the team about Goldilocks and the 3 Bears, and depending upon where you are raised, particularly if you're our China team, they didn't know that story. And so they looked at me very strangely.

It is -- they're not the same. I think that's the hard thing is we think that the ADCs are similar and they're truly not. And so I can't speculate about data sets that you've seen, but you've seen high response rates durability in nonrandomized data sets in the first-line setting with TROP2 ADCs. And I think that there's a lot of different factors that go into successes of studies. But we're very confident in the data that you see, you can't do much better than a randomized Phase III well-conducted study, like we've seen with OptiTROP-Lung05 as well as the other data sets that they've generated. So it's a nonanswer, I think, but it goes back to Dean's part. They're not all the same.

And I would just emphasize the linker payload of Kelun, this TROP2 ADC, as you can see from the slide, is not the only asset. Similarly, I would just say the linker payload of Daiichi Sankyo that they really pioneered is also important, and we don't just have one asset. But how you position these different flavors given the molecular design differences, one has to think thoughtfully about those differences. But I don't -- I want to make sure we respect very much the linker payload of Kelan and go back to the slide. It is not just 1 compound. And we respect very much the linker payload, which is different for Daiichi Sankyo. And you see how we advance them but we're not -- we're advancing them in different ways and different tumors.

All right. Maybe just a couple of more questions. Nick.

Nick Jennings, Goldman Sachs. A question on read-throughs or learnings from OptiTROP-Lung05. First, in lung. What, if anything, in the data makes you feel more confident in the maintenance setting or adjuvant setting? And then outside of lung, are there any derisking things that you see for other indications that you're running in TroFuse? And then finally, is there anything that you can share in terms of prospects for any other interim reads for the TroFuse trials? Are there any trials progressing where you could actually see an interim?

So I'm going to turn it over to Marjorie. But as you guys know, famously, we do not comment on interim analysis. With that, Marjorie.

We don't comment on our analyses. Yes, I am sorry, I had echo Dean there. I think learnings what I was happy to see was consistency of data from sort of the Phase II data sets into the OptiTROP-Lung05, including, as you get into bigger studies will safety be the same, and we saw very consistent data. And so that's, sort of, you think about how do you take that kind of information. This is also not the first Phase III that we have from our partners. They've had multiple Phase III readouts. And so we're seeing consistent data across multiple indications with the AE profile, with the dose modification, with the discontinuation. And that is how we have learned in our global studies to be able to ensure that AE management is as tight as possible.

Physicians are so good at learning how to manage toxicities over time. But in global studies, we don't want them to have to learn in real time because it puts the patient in a bad spot and our ability to show a benefit at a disadvantage. And so that information has informed for how we are overseeing and how we're managing our Phase III programs.

Vamil?

Vamil Divan from Guggenheim. So 2 for me. So one, obviously, you laid out a lot of -- what you've done to diversify away from KEYTRUDA. Just curious if you want to comment more on kind of where you see openings to further differ supply, whether it's modalities, mechanisms based on it was at ASCO or just more generally and feel free to take that outside of oncology, if you want to.

And then just the second part is just around the -- obviously, a lot of interesting data from China. You guys are taking advantage of this. Just how were thinking of balancing, I guess, obviously a large U.S. biopharma company, how you're balancing sort of leveraging the speed of development in China, but also investing in the U.S. I think a lot of concerns raised here around what this means for the U.S. biopharma industry. So any comments you want to make there?

So I'm going to take your last question because I heard that completely. I think that China is an important player, and we've recognized that. I mean I just -- our partnership with Kelun is not just about assets, it's about their people and how they think. And we're very lucky to have that collaboration. And we have recognized that, and I can't remember when it was publicly disclosed. Maybe it was publicly disclosed in '22, something like that, but we have worked with them longer than that. And so we have enormous respect for what they do. But I also want to just emphasize that there are so many important things that are happening outside of China. And I would just emphasize, for example there is a possibility that for the first time after, I don't know, 3, 4 years, it could be "a cancer vaccine" does -- and I don't mean hepatitis B, GARDASIL or EBV, I mean that. And that's something that we're extremely lucky to be partnered with Moderna. So I just want to make sure that, that's emphasized.

And then when you look at -- you guys talked about the KRAS space. You have to give credit to, for example, Amgen and Mirati. They pioneered that with Switch2. And you have to give incredible kudos to the work done from Rev Med using a tri-complex inhibitors. So for us, it's important to take innovation from the best places throughout the globe. And I hope that we continue to do that because these diseases take more than one bright idea. So that's where I would lay that question is. What was the first?

Part one was other areas within oncology that you might consider moving into?

So one is the heme. We just want to make sure you guys realize we're making a array in heme. And I'm not sure if he's listening, but it's a little bit of a homage to Roy Baynes, who's a heme malignancy who was stuck doing a whole bunch of solid tumor stuff and did a pretty reasonable job if I may say so. But this is a bone marrow transplant heme malignancy guy. So if we're successful with this, I hope that he will eat at a burger joint with me, and I will give him enlicitide, but that's a place.

But the other place is tissue targeting. We think tissue targeting is really important. We talked about antibody drug conjugates. We talked about Kelun, we talked about Daiichi Sankyo, but we have not revealed the internal pipeline that is moving fast. Tissue targeting is not just with a chemo payload. There's other payloads that you can do. And increasingly, the work -- actually, you have to give Roger some credit at a different company who was very much advancing T-cell engagers largely in heme malignancy, but there's been a corner turn with T cell engagers in solid tumors.

So you see it in our -- right? We look at KEYNOTE-189 and Cetera, that's great. But for small cell lung cancer, what you see is that we're trying to do KEYNOTE-189 there. How we're trying to do it, we're trying to use a next-gen chemo with an ADC and the next-gen IO with a T cell engager. And if that works, we wonder how broad that principle is in places where maybe pembro didn't work as well as we had hoped. So those places are really important to us.

So I know there's still a few hands going up. We may be able to remain here for a few minutes after we're done to answer any follow-up questions, but we'll end with Meacham.

Meacham from Citi. On your broader ADC strategy, given sector MDs studied across various indications and assuming it moves into earlier lines, across different tier indications. How do you think about downstream treatment sequencing with your other ADC especially [ 41 ADC? ] Just trying to get a sense of your internal framework for avoiding ADC overlap across targets, payloads or tumor indications.

Yes. I mean I will give it to Marjorie. But every time you come up with therapy as great as KEYTRUDA. Number one is not everyone responds, right? And the other second thing is you can respond and then not respond. So it's almost like an incessant need for constant innovation. So with that, I'll turn it over to Marjorie.

Yes, I think this is why we have such an extensive biomarker program in our sac-TMT firm as well as in our other targeted therapies is that it is -- because of antibody drug conjugates as one example and here what you've asked about, have multiple ways that they can work through bystander effect through sort of the differences in the payload, the DAR, there are going to be differences amongst all of these drugs. And so some of them may need to have specific enrichment to get to where you may want to use drug A versus drug B.

Yes. I think it's to be determined how these will separate at what time. We've already seen some antibody drug conjugates approved to have biomarkers, like in ovarian cancer, wherever that has happened, and we've seen them in bladder where it doesn't. So I'm not going to speculate on the future. I think it is important to understand where people are most likely to have benefit and least likely to have detriment. And that will help separate out how these drugs work over time is the general guess.

There's very immature data about the ability to sequence antibody drug conjugates. There are some -- there are small data sets looking, for example, at the Daiichi's great DXD platform showing that there is less response. When you do, for example, in HER2-positive breast cancer, one into the next. It doesn't mean that, for example, like a [indiscernible] couldn't work, but the same payload may have some challenges. And I think that there is a lot of interest in thinking about what is the mechanism of resistance? Is it [indiscernible] kind of mutation? Is it pump? Could you change the payload to where the pump doesn't kick the payload out? And that will help with the sequencing part. This is true just like with chemotherapy itself is that we generally don't give taxane 1 straight into taxane 2 for most tumors. There are some kind of brakes in payload switching or chemotherapeutic switching. And I think the same thing will be true for ADCs. I'm speculating though.

All right. Thank you all again for your time and attention and some really great questions. We appreciate it. Dean, anything you'd want to close with?

Please enjoy. There's bacon in the back. And [indiscernible], we hope, will be available shortly...

Thank you for standing by. Welcome to the Merck & Co., Inc. Rahway, New Jersey, USA, First Quarter Sales and Earnings Conference Call. [Operator Instructions] 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.

Thank you, Julie, and good morning, everyone. Welcome to the First Quarter 2026 Conference Call for Merck & Co, inc. 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'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. 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 U.S. Private Securities Litigation Reform Act of 1995. 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'd like to turn the call over to Rob.

Thank you, Peter. Good morning, and thank you for joining today's call. Advancing and delivering breakthrough science to address unmet medical needs remains the foundation of our strategy to create sustainable value for patients and shareholders. We continue to make tangible progress in accelerating and augmenting our pipeline. And with the recent new product launches, the transformation of our portfolio to a far more diversified set of commercial drivers is now well underway.

Turning to our first quarter results. We delivered year-over-year growth with revenue of $16.3 billion, driven by continued strength in oncology, animal health and growing contributions from new products. We remain confident in our outlook for 2026, which Caroline will speak to in a moment.

We also achieved several important pipeline milestones, the FDA approved IDVYNSO as a new treatment option for adults with virologically suppressed HIV-1, reflecting our ongoing commitment to innovation to address the evolving needs of people living with HIV.

Additionally, the FDA granted priority review for I-DXd, our antibody drug conjugate being developed in collaboration with Daiichi Sankyo for adult patients with previously treated extensive stage small cell lung cancer.

In ophthalmology, we initiated Phase IIb/III studies in neovascular age-related macular degeneration for MK-8748, our TIE-2/VEGF bispecific antibody. The second candidate from our acquisition of iBio. We also presented important Phase III results across multiple other therapeutic areas.

Finally, in our Animal Health business, we have high expectations for long-term growth, driven by new and ongoing product launches. We're pleased to have introduced NUMELVI to the U.S. market, the first and only second-generation JAK inhibitor for allergic dermatitis in dogs.

Our planned acquisition of Terns Pharmaceuticals with its promising candidate for certain patients with chronic myeloid leukemia is another example of our science-led business development strategy in action. TERN-701 has the potential to be a best-in-class therapy in a disease where there is an opportunity to further improve depth and duration of response for patients. Given the substantial unmet need for additional options, we believe TERN-701 has multibillion-dollar commercial potential and will be a significant driver of growth in the next decade. This transaction demonstrates our disciplined approach to pursuing business development when compelling science and value align. And we are confident in our belief that TERN-701 can benefit patients while generating value for our shareholders.

Looking ahead, we continue to expect a particularly robust period of Phase III data readouts from novel candidates over the next 18 months. Our portfolio is undergoing a meaningful transformation to one with a rapidly expanding and diversified set of growth drivers. We're in the midst of initial launches of over 20 new products, almost all of which have blockbuster potential across a broad set of therapeutic areas.

To move with the speed and precision this opportunity demands, we announced an evolution of our commercial operating structure. Our new business unit model, organized around products in therapeutic areas is built to drive accountability, sharpen focus and increase agility, ensuring that every part of our commercial organization delivers on the promise of our pipeline for patients.

We're pleased to welcome Brian Ford to our executive team to lead our new specialty, pharma and infectious diseases business unit. While Yani Ushausen has been appointed to lead our new global oncology and MSD International business unit. Corp Guindo has taken leadership of a newly formed strategic access policy and communications unit. Each of these individuals brings deep experience to these important roles. Together, this leadership team and structure will enable strong execution of our strategy, which includes extending our leadership in oncology while building a powerful, diversified portfolio across a range of therapeutic areas. We're confident that this change will best position us to deliver on a potential commercial opportunity of over $70 billion by the mid-2030s from these 20-plus anticipated new growth drivers alone.

We're also taking important additional steps to accelerate our ongoing transformation as it relates to artificial intelligence. Last week, we announced a multiyear partnership with Google Cloud to scale advanced AI, data and agentic capabilities across our company. This complements our recently expanded collaboration with Tempus AI designed to advance our precision oncology strategy as well as a recent agreement with the Mayo Clinic that will allow us to leverage Mayo's clinical insights and genomic data sets at scale. Together, these efforts support improved productivity across our organization and create a real opportunity to advance the innovation in our pipeline with greater speed and with a higher likelihood of ultimately reaching patients.

As we look forward, we continue to see robust demand for our innovative medicines and vaccines around the world. We're investing behind our pipeline, optimizing our operating structure and are fully committed to our purpose of using leading-edge science to save and improve lives. We're encouraged by the progress we're making and look forward to the many significant milestones coming in the months ahead.

In summary, we remain confident in our strategy and in our ability to deliver sustained growth and value for our shareholders.

Before I turn the call over to Caroline, I want to recognize Sanat Chattopadhyay and Joe Romanelli, both of whom have announced the retirements from Merck. Sanat and Joe have made lasting contributions to our company and to the patients we serve, and I want to thank them for their many years of impact. And now to Caroline.

Thank you, Rob. Good morning. As Rob noted, we delivered growth in the quarter driven by continued strength in Oncology and Animal Health as well as increasing contributions from our many compelling product launches. Our commercial and operational execution continues to enable us to generate strong results in the short term while we advance our broad and deep pipeline and invest in innovation to deliver long-term value for patients, customers and shareholders.

Now turning to our first quarter results. Total company revenues were $16.3 billion, an increase of 5% or 3% 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 8% to $8 billion, with global growth driven by continued strong demand from metastatic indications and robust uptake in earlier-stage cancers.

Strong utilization in tumors that primarily affect women, including breast and cervical cancer, continues to be a key contributor to growth. In addition, we saw increased use of KEYTRUDA in combination with Padcev in locally advanced or metastatic urothelial cancer. In the U.S. growth benefited by approximately $250 million from the timing of purchases.

We are pleased with the positive feedback following the recent launch of KEYTRUDA QLEX, Sales in the quarter were $128 million. On April the 1st, we received the permanent J code, and we look forward to having an even greater impact on patients and health care systems.

Our broader oncology portfolio achieved another quarter of strong growth. Notably, WELIREG sales increased 43% to $199 million driven by continued uptake from ongoing launches in international markets and increased use in certain patients with previously treated advanced renal cell carcinoma in the U.S. We look forward to potentially reaching more patients with renal cell carcinoma, following positive results from the LITESPARK-011 and -022 studies.

In Vaccines and Infectious Diseases, GARDASIL sales were $1.1 billion, a decrease of 22%, driven by lower demand in China and Japan, consistent with our expectations. In the U.S., sales declined 10%, primarily due to timing of CDC purchases, which was partially offset by price.

In pneumococcal, CAPVAXIVE continues to progress well, with sales of $142 million, an increase of 31%. Outside of the U.S., sales were driven by uptake from ongoing launches in certain markets. In the U.S., growth was driven by increased demand from both retail pharmacies and nonretail customers, partially offset by a reduction in wholesaler inventory.

In Cardiometabolic and Respiratory, WINREVAIR continues to have a positive impact on patients with pulmonary arterial hypertension. Global sales were $525 million, a reflection of the continued strong demand for this important therapy. In the U.S., we continued to see steady progress with more than 1,600 new patients having received a prescription and an increase in usage by patients with background therapies do not include a prostacyclin. Outside the U.S., we continue to progress with securing reimbursement and ongoing launches.

Sales of OHTUVAYRE, a novel maintenance treatment for adults with COPD, were $131 million. As expected, sales were adversely impacted by the CMS reimbursement change as well as Medicare deductible resets. We are encouraged by the prescription trends, which began to recover in March.

Consistent with our strategy to maximize OHTUVAYRE's strong potential, we are making investments to reach more patients and physicians, which we expect will accelerate growth in the second half of the year and beyond.

Our Animal Health business delivered another quarter of strong growth, with sales increasing 6%. Livestock sales grew 8%, driven primarily by higher demand for ruminants and poultry products as well as price. Companion animal sales increased 4% due to new product launches and price, partially offset by a reduction in vet visits.

I will now walk you through the remainder of our P&L, and my comments will be on a non-GAAP basis.

Gross margin was 81.9%, a decrease of 0.3 percentage points.

Operating expenses increased to $15.2 billion, including a $9 billion onetime charge related to the acquisition of Cidara Therapeutics. Excluding this charge, operating expenses grew 2%, reflecting increased investments in support of our key growth drivers, partially offset by benefits of our multiyear optimization effort and recognition of a portion of the external funding for sac-TMT.

Other expense increased to $318 million, primarily reflecting financing related to recent business development transactions.

Our tax provision was $957 million. As a result of the nontax deductible onetime charge for Cidara, we had a pretax loss this quarter resulting in a tax rate of negative 43.5%.

Taken together, we reported a loss of $1.28 per share. which includes a negative impact of $3.62 per share from the onetime charge related to Cidara.

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. We now expect revenue to be between $65.8 billion and $67 billion, representing growth of 1% to 3%, including a positive impact from foreign exchange of approximately 1 percentage point using mid-April rates.

Our gross margin assumption remains approximately 82%.

Operating expenses are assumed to be between $36 billion and $36.8 billion. This range does not include the proposed acquisition of Terns or any additional significant potential business development transactions.

Other expense is expected to be approximately $1.3 billion.

We assume a full year tax rate between 23.5% and 24.5%, which reflects the nontax deductible onetime charge for Cidara.

We assume approximately 2.48 billion shares outstanding.

Taken together, we expect EPS of $5.04 to $5.16, including a positive impact from foreign exchange of approximately $0.10 using mid-April rates.

It is important to note that this guidance does not include the impact of the proposed acquisition of Terns, which is expected to close soon. We expect the transaction will result in a onetime charge that will increase research and development expense by approximately $5.8 billion or approximately $2.35 per share.

In addition, ongoing investment to advance TERN-701 and the assumed cost of financing will negatively impact EPS by approximately $0.12 this year.

As you consider your models, there are a few items to keep in mind. For KEYTRUDA, recall that while growth benefited from the timing of wholesaler purchases in the first quarter, we will face a corresponding headwind in the third quarter.

For ENFLONSIA, consistent with the first quarter, we expect minimal sales in the second quarter, given the seasonal nature of the product and continued high levels of RSV monoclonal antibody inventory in the market. We are actively engaging customers in advance of the RSV season and remain focused on educating health care professionals and parents on the importance of protecting infants from this potentially serious disease and expect shipments to increase in the second half of the year.

Lastly, we expect SG&A expenses to increase over the remainder of the year as we invest to maximize the impact of our recent and upcoming launches.

Now turning to capital allocation, where our strategy remains unchanged. We will prioritize investments in our business to drive near- and long-term growth, including new product launches and a robust pipeline.

We remain committed to the dividend with the goal of increasing it over time.

Business development remains a high priority as evidenced by our recently announced acquisition of Terns. We maintain the ability within a strong investment-grade credit rating to pursue additional, science-driven, value-enhancing transactions going forward.

We are on pace for approximately $3 billion of share repurchases this year, as previously communicated.

To conclude, we are confident in the outlook for our business driven by global demand for our innovative medicines and vaccines, including our many new product launches. We remain committed to bringing forward medically significant innovations that will enable us to deliver value to patients, customers and shareholders well into the future.

With that, I'd now like to turn the call over to Dean.

Thank you, Caroline. Good morning. Progress continued with a steady cadence of clinical and regulatory development. Today, I will provide updates in cardiometabolic and respiratory, oncology, infectious diseases and ophthalmology then conclude with key upcoming milestones.

Starting with cardiometabolic and respiratory. The global burden of atherosclerotic cardiovascular disease remains significant. And with recently updated clinical guidelines recommending lower LDL-cholesterol thresholds, there remains a need for innovation that is broadly accessible.

At the American College of Cardiology Congress last month, additional Phase III data were presented for enlicitide, our investigational oral PCSK9 inhibitor. Enlicitide is designed to reduce LDL cholesterol in a similar manner to PCSK9 antibody therapies with the simplicity of a daily pill.

The Phase III CORALreefAddOn study demonstrated statistically significant and clinically meaningful greater reductions in LDL-cholesterol at 8 weeks compared to other oral add-on lipid-lowering therapies when added to background statin therapy. Of note, enlicitide also showed statistically significant greater reductions across key secondary endpoints, including apolipoprotein B and non-high-density lipoprotein cholesterol.

The CORALreef program has generated compelling evidence for the efficacy and safety of enlicitide As a pill, enlicitide has the potential to democratize access to a potent lipid-lowering therapy. With clinical guidelines targeting lower LDL-cholesterol targets, the field of preventive cardiology is increasingly energized and focused on early, aggressive LDL-cholesterol reduction.

Also at ACC, we showed full results from the Phase II CADENCE trial, evaluating WINREVAIR in adults with combined post- and pre-capillary pulmonary hypertension and heart failure with preserved ejection fraction. WINREVAIR met the primary endpoint of reduction from baseline in pulmonary vascular resistance compared to placebo. At the 0.3 milligram per kilogram dose, WINREVAIR prolonged the time to first occurrence of a clinical worsening event, which was an exploratory secondary endpoint with a hazard ratio of 0.18. Results provide compelling proof-of-concept and warrant further evaluation in Phase III. This is an underdiagnosed condition with an extremely poor prognosis. There are currently no approved therapies.

Moving to Oncology, KEYTRUDA now has 44 FDA-approved indications across 19 tumor types as well as 2 tumor-agnostic approvals and continues to generate evidence further transforming cancer care.

In the first quarter, the FDA and European Commission approved KEYTRUDA in combination with paclitaxel, with or without bevacizumab, for the treatment of certain patients with platinum-resistant ovarian cancer based on the findings of KEYNOTE-B96. This is the first PD-1 inhibitor based regimen to show a statistically significant improvement in both progression-free survival and overall survival versus paclitaxel with or without bevacizumab for these patients.

We also announced findings from the KEYNOTE-B15 study demonstrated KEYTRUDA plus Padcev reduced the risk of event-free survival related events by 47% and risk of death by 35% for cisplatin eligible patients with muscle invasive bladder cancer. This is the first and only perioperative immunotherapy plus ADC regimen to extend survival for these patients. Based on these data, the FDA has accepted supplemental BLA filings for KEYTRUDA and KEYTRUDA QLEX under priority review and is targeting an action date of August 17. KEYNOTE-B15 is the sixth study of a KEYTRUDA-based regimen to demonstrate overall survival in an earlier stage cancer and, if approved, would mark the 12th earlier-stage indication for KEYTRUDA.

We also continue to make progress across the broader oncology portfolio. WELIREG, our first-in-class oral HIF-2-alpha inhibitor initially approved for the treatment of certain patients with von Hippel-Lindau syndrome has now shown additional clinical data for patients with renal cell carcinoma across multiple stages of disease.

The LITESPARK-022 study evaluating WELIREG plus KEYTRUDA in the adjuvant setting, demonstrated a 28% reduction in the risk of disease recurrence or death compared to KEYTRUDA alone. In addition, the LITESPARK-011 study, evaluating WELIREG plus Lenvima, demonstrated a 30% reduction in the risk of disease progression or death in certain patients with advanced RCC and versus cabozantinib.

Supplemental applications for WELIREG in combination with KEYTRUDA or KEYTRUDA QLEX based on LITESPARK-022 were granted priority review by the FDA with the PDUFA date of June 19. The FDA also set a PDUFA date of October 4 for WELIREG in combination with Lenvima based on the LITESPARK-011 study.

As announced last week with our partner, Eisai, the combination regimens from the LITESPARK-012 study did not meet the dual primary end point of progression-free survival and overall survival for the first-line treatment of patients with RCC and compared to KEYTRUDA plus Lenvima. The data from the study provides learnings to the broader program. Studies from the LITESPARK clinical program, including LITESPARK-033 and 034, evaluating WELIREG in combination with zanzalintinib, are ongoing.

Together with our partner, Daiichi Sankyo, we announced that the biologic license application for ifinatamab, deruxtecan, or I-DXd, for the treatment of extensive-stage small cell lung cancer in certain patients with disease progression has been granted priority review by the FDA. This was based on results from the Phase 2 IDeate-Lung01 trial, and the Phase 1/2 IDeate-PanTumor01 trial. The FDA has set a PDUFA date of October 10.

As Rob mentioned, we continue to identify external opportunities to strengthen and diversify our pipeline, most recently with the proposed acquisition of Terns Pharmaceutical. TERN-701, a novel oral allosteric inhibitor of the BCR::ABL oncogene is being evaluated for the treatment of certain patients with chronic myeloid leukemia and has the potential to be an important addition to our growing hematology pipeline. Clinical data has shown encouraging activity with promising rates of major molecular response and deep molecular response by week 24.

Importantly, this includes responses in patients with high disease burden, who previously received multiple lines of therapy. We are eager to get to work with the talented Terns team to advance this program in a timely fashion.

Turning to HIV. Last week, the FDA approved IDVYNSO, our once-daily, single-tablet 2-drug regimen of doravirine and islatravir, a next-generation nucleoside reverse transcriptase inhibitor that blocks translocation, indicated for the treatment of certain adults whose HIV-1 is virologically suppressed based on 2 Phase III SWITCH study. Approval was previously granted in Japan.

IDVYNSO is the first approved 2-drug regimen that does not include an integrase strand transfer inhibitor.

At CROI, additional data was presented demonstrating noninferiority and a similar safety profile at week 48 versus the 3 drug, INSTI-based regimen, Biktarvy, in adults who had not previously received antiretroviral treatment. In addition, IDVYNSO was shown to maintain virologic suppression at week 96 in adults who switched some other oral antiretroviral therapies, including Biktarvy.

Islatravir, a potent long-acting antiviral that forms an anchor for additional regimen is currently being evaluated in late-phase trials as a once-weekly combination with Gilead s lenacapavir, an HIV capsid inhibitor, and separately in combination with ulonivirine, an internally developed non-nucleoside reverse transcriptase inhibitor. We plan to present data from our HIV pipeline at an upcoming medical meeting.

Next to RSV. In February, positive new data were presented for ENFLONSIA for the prevention of RSV lower respiratory tract disease in infants and children under 2 years of age at increased risk for severe disease over 2 seasons from the Phase III SMART study. These findings will be shared with global regulatory authorities with the intent to obtain an expanded indication.

RSV is a leading cause of infant hospitalization globally and is especially serious for children under 2 years of age at high risk for severe disease. These data provide additional evidence for ENFLONSIA for the prevention of RSV in younger children who remain at risk entering their second season.

Earlier this month, the European Commission approved ENFLONSIA for the prevention of RSV lower respiratory tract disease in newborns and infants during their first season, based on the Phase IIb/III CLEVER and Phase III SMART trial.

Next, in ophthalmology. We remain focused on retinal diseases associated with vascular leakage and neovascularization, with emphasis on improving structural and functional outcomes for patients and helping reduce the burden of certain retinal diseases. This month, we initiated 2 pivotal Phase IIb/III trials evaluating MK-8748, an investigational bispecific Tie-2 agonist/VEGF inhibitor for the treatment of neovascular age-related macular degeneration. The MALBEC and TORRONTES studies are the first trials in a broader late-phase development program for MK-8748. The decision to advance development is based on promising results from the Phase I/IIa RIOJA trial.

In closing, we anticipate multiple events and milestones across therapeutic areas in the coming months, including, in oncology, please mark your calendars for our annual investor event at the ASCO Annual Meeting in Chicago on the evening of Monday, June 1, where we will outline progress on our oncology pipeline and strategy. On the regulatory front, as noted, potential approvals for KEYTRUDA plus Padcev in MIBC, WELIREG in expanded RCC settings and for I-DXd in extensive stage small cell lung cancer.

In HIV, data from the Phase III ISLEND-1 and 2 trials evaluating islatravir and lenacapavir, a once-weekly oral 2-drug treatment regimen in collaboration with Gilead.

In cardiometabolic and respiratory, the September 21 PDUFA date for WINREVAIR for the label update based on the Phase III HYPERION study and the Commissioner's National priority Voucher Process for enlicitide is progressing.

In immunology, data for tulisokibart, our TL1A inhibitor, based on the Phase III ATLAS-UC trial in ulcerative colitis and Phase II ATHENA study in SSc-ILD.

Finally, in ophthalmology data from the Phase III BRUNELLO study of MK-3000, our novel Wnt agonist, being evaluated in patients with diabetic macular edema and the Phase II portion of the RIOJA study of MK-8748 being evaluated for the treatment of patients with certain retinal diseases.

I look forward to providing further updates throughout the year. And now I will turn the call back to Peter.

Thanks, Dean. Julie, we're ready to start the Q&A now. We'd appreciate if analysts would limit themselves to a single question today so we can conclude the call at the top of the hour. Thank you.

[Operator Instructions] Our first question comes from Carter Gould with Cantor.

Maybe we'll start on the pipeline on MK-3000. How are you thinking ultimately about dosing the 1-year BRUNELLO data is likely not going to inform much on duration interval and the Lucentis comparison is going to leave lots of questions unresolved. I fully appreciate that 40% have suboptimal responses to VEGF, but can this reach your targets if it ultimately requires every 4-week dosing? Or put differently, are there reasons you have conviction about every week or every 12-week dosing?

Thank you very much. So just stepping back, MK-3000 is our potential first-in-class novel candidate targeting Wnt pathway. -- for retinal vascular disease. Almost all the other mechanisms are based on VEGF. And as you've highlighted, up to 40% have suboptimal response to VEGF.

In terms of dosing, frequency, when one sort of does these trials once start at every 24 weeks and upon doing that, then you go further from that. So we believe that one should focus on Q4 weeks, but one should not only focus on Q4 weeks. So your question, which I think alludes to, are we considering other frequencies, the answer is absolutely yes. But the initial focus is on 4 weeks because that is very important to get into the label.

I just want to also highlight really quickly that it's not just MK-3000, it's MK-8748, which is the novel bispecific directly agonizing Tie-2 that we're also excited about, and that as well is advancing in Phase IIb/III trials in retinal vascular disease.

Our next question comes from Jason Gerberry with Bank of America.

Had an update or a question on the WELIREG clinical update on LITESPARK-012 recently provided. And I wanted to get your sense, does this provide any concerning read-through to some of the ongoing readouts for LITESPARK-022 and the ability to see OS benefit there? And also, you have another frontline study with WELIREG, albeit in a post-PD-1 setting. So just kind of curious if you can speak to some of the read-throughs to some of the ongoing trials.

We were having a hard time hearing you, Jason. Let me restate the question. And then I think I'll get it. I think what you're asking, given the LITESPARK-12 outcome, how does that make us think about getting OS in some of the upcoming LITESPARK studies and what's our overall view as it relates to WELIREG. I think that's the way I was trying to ask.

Thanks because I could not hear quite well. In relationship to the other ones like LITESPARK-022, LITESPARK-011, which have PDUFA date in June and October. I think we're very bullish in relationship to how those will turn out. And also in relationship to the question that you have of how -- what's the readout of this trial that had 3 agents involved, which is a PD-1, VEGF TKI and a HIF-2-alpha, I think we are studying that data, but I would be very cautious to sit there and say that has any negative implication to other trials where, for example, we have a VEGF TKI and WELIREG or a PD-1 and WELIREG.

Our next question comes from Michael Yee with UBS Securities.

As we think about coming up to ASCO, where you will obviously have your SAC PMT featured in lung cancer, of course, obviously, PD-1 VEGF also featured in a plenary as well from a competitor, how are you thinking about the dynamic of a sac-TMT in the context of PD-1 VEGFs and your own Lenova asset and perhaps accelerating that? And maybe just give us a snapshot being as to where we stand on these 2 types of programs.

Yes. So I'll answer the question too individually, but I will also answer what I think you're alluding to is the possibility of combinations of that. So in relationship to the PD-1 VEGF, we're very interested in the space. We shared some encouraging early data at AACR. And our construct of the leading PD-1 VEGF is most similar to ours. And so we're looking at our own data. But to be frank, we're also looking at the broader field as well. And so we're eager to move PD-1 VEGF Ford in our trials.

And one of the issues that we think in our hands, a PD-1 VEGF, if it should be better than KEYTRUDA, we have a plethora of agents that would benefit from a combination with either KEYTRUDA or a KEYTRUDA plus or a PD-1 VEGF. So we're advancing that.

In relationship to sac-TMT, I believe that at the ASCO, our strong partner and collaborator Kelen will provide optotroplung-05 in first-line non-small cell lung cancer. And I think people will look at that data very carefully because it may reflect on our global trials, which are not just within China but throughout the globe.

In relationship to the question that you said is, is there any possibility of thinking about combining those to -- the answer is absolutely yes. And we're developing the information and also taking a scan to the outside world as to where and when to best combine a PD-1 VEGF with the rest of our portfolio.

Our next question comes from Asad Haier with Goldman Sachs.

Congrats on all the progress. Maybe just a high-level one back to BD, you've been fairly active across a number of different areas, and you're saying you're ready to pursue additional transactions. So just level set us on where you still see the biggest gaps in your portfolio that could benefit from more BD as you scan the therapeutic landscape? What's the sweet spot now in terms of deal size? And is there a point at which the BD lever starts to diminish in importance just given your growing confidence in the growth trajectory out of the mid part of the next decade with the portfolio transformation that's already underway?

Yes. Asad, I appreciate the question. I would just start by saying we are very confident in the assets we have, the new assets we bought in through business development as well as the continuing progress we're making with our pipeline. So that continues and that grows. That said, we also continue to focus on business development. And as we've said in the past, we don't necessarily target specific therapeutic areas as the first question we ask. We always ask the first question, which is where do we see a significant unmet scientific opportunity where the science is compelling and can address.

And in doing that, that allows us to think about where to focus. So we start with the science. We then asked the question, how does it fit strategically and then move to the value question and where we see science and value in line we move. So that has not changed. Our approach remains to be that as our focus.

From a size perspective, we continue to look anywhere in the $1 billion to $15 billion range with that kind of being the sweet spot. But as we've consistently said, we have the capacity to go beyond that for the right strategic deal. And we will, if and when we see that. So that is where we're looking as far as the therapeutic areas where we do continue to see interesting science, obviously, oncology continues to be an area where there's a lot going on. We continue to look.

Immunology is an area where we continue to see interesting opportunities as well as cardiometabolic is probably the 3 most likely areas, but we are willing to be opportunistic beyond that as well.

And I guess, Peter, did remind me one part. When will we have less urgency to do a deal. My view is we can always do better. We can always grow stronger. And if we have the capacity, we will continue to invest. As Dean has said, we think in terms of one pipeline, whether it's internal or external. And so that mix of internal plus external will be an ongoing part of our strategy, you will not see that change.

Our next question comes from Vamil Divan with Guggenheim Securities.

I just had going back to Win Revere. I appreciate your comments about the cadence data in ACC. Just curious if you could provide any updated thoughts on how the discussions with the FDA are going on moving forward the Phase II program there, you remain confident on the clinical listening being can be the primary endpoint of the Phase III? And then just maybe any sort of rough estimate on how long you think you would actually take to execute a Phase III program in this indication.

Yes. Thank you very much. So in relationship to Wind River, I mean it's reshaping the standard of care in PAH. And now the question is whether or not we can move it to a different segment of pulmonary hypertension, those people with heart disease. The patient population that we pick is a relatively small patient population of those patients who have pulmonary hypertension and heart disease. But it's probably one of the biggest unmet needs that I know of in this patient population, who at least the way that I would describe it is a very different patient population than that of PAH. And one could actually say is more complicated, is older and has more comorbidity.

We think that the cadence gives that proof of concept -- as I had said previously, it's fine to talk about the primary end point reductions in PVR. But at least for me, in this patient population, it will be very important to have the endpoints that allow someone and when I mean someone, I mean patients, providers and payers to really see a compelling conglomerate of endpoints in the time to clinical worsening. And -- and that's where we will be having our discussions with the FDA.

I think the other one that will be important is defining the inclusion criteria in relationship with the FDA and also the broader community in relationship to how do you actually operationalize the clinical trial, but also for everyone to be very clear that in our minds, this is a patient population that is an orphan patient population.

Our next question comes from Daina Graybosch with Leerink.

Yes. I want to go back to ASCO and the data we're going to see from Kalon on OptiTROP-Breast05. That's a China study. And I wonder what should we keep in mind as we look at those outcomes on how it could or could not translate globally any differences in what you're doing globally? Or any other things to keep in mind.

Yes. Thank you very much for that question. So just stepping up at a higher level, we think sac-TMT, it is a coke to ADC, but we think that it has some important differentiation. And we believe that the sac-TMT has a potential to be I think Elliot has often said a cornerstone and Margaria said a workhorse ADC. And we have 17 Phase III studies, 13 are in first movers. We have an in blast, non-small cell lung cancer, gyn, gastric and bladder.

When we do our trials and when we speak to our close partner, Kalon, we use the fact that they are, in some sense, doing signal finding in registrational trials in China. And we recognize China is different, but these are important data for us.

In relationship to the exact details of the sac-TMT and the Kian, I would just remind you that the OptiTROP-Breast05, they will have data. But I think it's very important to sit there and go, if -- how one thinks through that in terms of how that would read out. We are following their data very much. But I think that we are guided we are guided by the results. I do want to emphasize that in their OptiTROP, it's sac-TMT plus KEYTRUDA versus KEYTRUDA in PD-L1 positive first-line non-small cell lung cancer. And it's very important that if one wants to do an ADC plus KEYTRUDA versus KEYTRUDA in the United States, ex China, one has to look at where a PD-1 and what's the range with which the PD-L1 cut-off is.

And so for us, this is the first Phase III combination study of sac-TMT and KEYTRUDA to read out. We have 50% of our Trou studies are evaluating KEYTRUDA combos in our TrophUse-007, our global study at ACTMTand KEYTRUDA versus KEYTRUDA in TPS greater than 50% in first-line non-small cell lung cancer. And I emphasize that simply because in the United States and ex China, TPS greater than 50% is where KEYTRUDA has an indication.

Our next question comes from Steve Scala with TD Cowen.

What are the gating factors for FDA acceptance of the enlicotide application? And Dean, can you speak to the changes that you're pursuing on titration? What shorter durations are you pursuing? And is the 15 minutes you spoke to previously before or after administration of the drug?

Yes. So I would just say that the enlicitide, as we've said out is we want to have the first and best-in-class potent oral PCSK9. It's designed in a very similar manner to antibody. And the data from the Phase III as a as we have discussed, I think lay out the value statement and relationship to its potency in terms of all the important by proteins. In relationship to the CNPV, the issue in relationship with the CNP is just for all of us to understand that the NPD process is a little bit different, which is we -- it's almost like a rolling submission, sort of way to think about it.

And through that rolling ambition, at the end of that sort of rolling submission, that's when the FDA sits there and gives you a letter and a PDUFA date. And so we are actively in those discussions with the FDA. And then as we normally do when we get formal acceptance of the complete file, which is a little bit different in the CMPB we'll make an announcement. I will emphasize that in our discussion with the FDA, -- what is very important to them is us really showing them that the CMPD program is important that we're addressing an important U.S. public health crisis that we're delivering innovative cures and we're increasing domestic drug manufacturer and supply chain resilient. So those are all important to the FDA, and we are in really good conversations with them.

And so I think that is going quite well, and it's progressing well. I would imagine that our estimation that we could get an approval at the second half of this year I see no reason to doubt that at this moment in time. In relationship to what you said in relationship to this issue of how you would take it -- we're also in the discussion with the FDA as to what the exact label is in relationship to how they will talk about prescriptions and when to take it and how to take it. And I don't want to get ahead of that conversation because those are extremely active conversations as we speak.

Our next question comes from Chris Schott with JPMorgan.

I just wanted to touch base on TL1A I think this one's got maybe a little bit less attention than some of your other late-stage readouts this year. But can you just talk a little bit about the role you're seeing TL1A playing in the IBD space? And maybe more broadly, when we think about immunology and IBD, there does seem to be more discussions about combination therapy as maybe the next step for the market. I'm just interested in Merck's approach here kind of building on the TL1A as I think about a broader pipeline?

Yes. So I would begin to say that throughout the immunology sort of field, there are certain nodes that are really important 23 is an important note. TNF is an important note. And that's how the field is set up. We wonder whether TL1A is such a node and that -- and our hope is to laSocobar could be 1 of the first and best-in-class TO1As. So that's in that sort of framework.

The other thing that you've just said, I think is really important is that there is increasing interest in combining different these nodes. This is something that was tried 10, 15, 20 years ago, and it didn't turn out well. But now the data suggests that in certain cases, you could begin to combine. When you look at the AE profile of tubasocopart, it's if you take the Phase II data, not just our Phase II data, but across the Phase II data. It is a member of the TNF superfamily, but from an AE profile, I might describe it as a kinder gentler AE profile than other NOTO-TNFs and with profound efficacy.

So I think combinations will be employing. -- in relationship to what we hope to see in relationship to Phase III ulcerative colitis and chronic and Crohn's disease, we have readouts coming out we hope to be first mover, but I also want to emphasize that we also think that TL1A may be also distinguished not just to be an important note, but it may be important for not just inflammation or dampening but also for fibrosis. And we have Phase II data in SSC ILD and in HS that's coming in 2026. And that hopefully will define the unique role or the unique position that T1 has with all the other major notes.

Our next question comes from Louise Chen with Scotiabank.

I wanted to ask you about the CADENCE study. There was some debate on the results that you recently presented at a medical meeting. And I'm wondering what you think the Street may be missing about the competitiveness of your product.

So I'm not sure I know everything that you're referencing. In terms of the competitiveness of our product, I don't know how else to answer it is, I don't know from a competitive standpoint that there's any treatment for this patient population. And when I look out, I'm not so sure that I see something that, that will break that barrier. In terms of whether or not you can make a Phase III, but sort of models what happens in the Phase II. I think that's where the focus is.

And that's been the focus in our conversations with KOLs, but also the FDA. And there is a clear understanding that this patient population, this patient population is 1 with a tremendous unmet need. And so I don't know that I would call it competitive sort of dynamic sort of thing. It's whether someone for the first time can have a compelling treatment for a patient population that is in dire need.

Our next question comes from Omar Raffat with Evercore.

I wanted to touch up on some incremental information that came out on your turns deal, which I don't think we discussed on the call you as did earlier. And by my math, it looks like the incremental patients may have had an MMR achievement rate of something like 2 out of 10 or something along those lines. Could you just speak to the -- that drop and how does that change or not change your overall thoughts about the drug's profile? Because presumably, that's like the real target population early in the launch?

Yes. Thank you so much for that. So I would just say that in this -- in CML, there's multiple approved therapies, and it appears that there is significant unmet need. And the value proposition for us for turns to 101 is whether or not it has the potential to be a best-in-class Alister TKI with high selectivity and improved therapeutic index. When data is presented at some of these meetings initially when they're early, Oftentimes, they're stated in 1 way. But for us, it's really important to always look at that data, whether it's especially when you go to ASCO, AACR or ASH, we look at it immediately in the eyes of how do you think in terms of registration.

And it's very important to translate whatever the abstract says to, what I would say, a more conservative ITT population consistent with regulatory standards. Given that, what was laid out at these public congresses is turn stated to 75% MMR and 36% DMR achievement rate. As the data evolved and we were looking at very specific patient-level data we believe that the MMR will be north of 50%. And within the confidence interval as had been publicly stated. And we think that in MMR in that sort of range is extremely compelling.

And then the other point that I would just highlight is we also think that the DMR rate is also very interesting to look at and whether or not this drug could not only create a best-in-class in relationship to MMR, but whether it could catalyze the field to increasingly think of DMR as a treatment goal.

Our next question comes from James Shin with Deutsche Bank.

Dean, have a question. Can you help us distinguish MK-6837 from sac-TMT? And then just going back to the TL1A question, is there a view within Merck that TL1A could stand alone in immunology because from a market or commercial perspective, immunogy seems to be very much a portfolio-driven strategy. Some of your peers have large portfolios, and there's a very competitive remote that's built with that?

Okay. So let me ask -- let me tackle the immunology question really clearly. We're very focused on TL1A, but if you ask me is TL1A is our ambition to stop at TL1A, -- would we use TL1A as a beach at to expand and extend. The answer is we would undoubtedly move it to expand and to extend -- we had expanded from IBD to other conditions, and we would advance it to conditions where the combination of immunofibrosis would be really important.

In relationship to other molecules, of course, if one had a leading TL1A that could advance through the series of different indications that we have, then in each 1 of those indications, you would immediately think of what's the combinatorial partner whether it be in IBD or HS or in SSC IOD. So we would immediately think about doing that as well. So we are focused on TL1A, but that focus does not create a situation where we're not thinking about not just whether we can be first and best, but what's next as well. And I think the other question was related to MK-6837. Is that correct?

I didn't catch the other one. MK-6837 is another ADC, which had a unique payload, and we have discontinued that especially when you see the profound impact of sac-TMT and also in relationship to -- we've always said that we're very interested in the ADC field in changing the target but also changing the payload and thinking about combinatory or cycling different payloads as the field moves on in the antibody drug conjugate.

Maybe I could just add 1 little bit as a teaser, maybe to what you'll see as we go into next year and beyond. In our invisible pipeline we often refer to we have other assets in the immunology space that you're not seeing right now. So just to reinforce Dean's point, we aren't just a TL1A company. We have other things in development beyond that. And as we move forward in time, you'll start to get a better sense of that as we unleash that as it moves into Phase I.

All right. Thanks, James. We'll squeeze one last question in before we end the call.

Our last question comes from Geoff Meacham with Citibank.

All right. Dean, in HIV, just given the recent approval of Avito, can you talk about how you guys see the competitive setup and related, I know you have prep coming up, but how much of a strategic priority is HIV and infectious disease when thinking about the overall BD strategy.

So in terms of our interest in HIV, there is a profound interest in really in our HIV program. And for those of you who've talked to Eliot Bar, the Chief Medical Officer, I think you can feel that just in his presence. Islatravir is a next-generation nucleoside reverse transcriptase inhibitor. It blocks translocation, and we have the daily program -- and increasingly, there is interest in going from a 3-drug daily program to a 2 drug.

And of the 2 drug daily programs, I think we're the only ones without an entity backbone. So I think that's very important. -- critically also important is that we believe ezlotivir can anchor to weekly, and you see it in later lenacapavir, which is a 2-drug combo, which hopefully will be the first Q week and then loci with UL, which is in development, and there will be data being presented, I think, in due course, it could be the smallest pill could be favorable DDI profile and be extremely effective.

And then as you said, to me, the monthly, if you could have 12 pills and protect people with MK 852 I think that would just be such an important contribution as a commercial product, but also as a global product for public health throughout the world. So if the question is, are we committed? And are we passionate about our HIV program? I hope that you heard from the tenor of my response, the answer is unequivocally yes.

Great. Thanks, Geoff, and thanks, everybody. Apologies for going over a few minutes. Give us a call if you have any follow-up questions. Thank you.

Thank you for your participation. Participants, you may disconnect at this time.

Thank you for standing by. Welcome to the Merck & Company Inc. Rahway New Jersey USA Investor Event announcing the acquisition of Terns Pharmaceuticals.

[Operator Instructions]

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.

Thank you, Amanda. Good morning, everyone. Welcome to Merck's investor call highlighting the announced acquisition of Terns Pharmaceuticals. Before we get started, I'd like to remind you that some of the statements that we make today may be considered forward-looking statements. 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 as well as Tern's SEC filings identify certain risk factors and cautionary statements that could cause ours or Tern's actual results to differ materially from those projected in any of our forward-looking statements made this morning. Merck & Company 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 and our SEC filings are posted to the Investor Relations section of our company's website.

Our speakers this morning include Rob Davis, Merck's Chairman and Chief Executive Officer; Dr. Dean Li, President of Merck Research Laboratories, Jannie Oosthuizen, Executive Vice President and President, Oncology and MSD International; and Caroline Litchfield, Chief Financial Officer.

With that, I will turn the call over to Rob.

Great. Thanks, Peter. Good morning, everyone. The ongoing successful execution of our science-led strategy is enabling us to positively impact patients and drive sustainable growth over the long term. We are transforming our company with launches underway for more than 20 anticipated new growth drivers, almost all of which have blockbuster potential and together represent a combined non-risk-adjusted potential commercial opportunity of over $70 billion by the mid-2030s. Innovation-driven value-enhancing business development is an important element of our strategy to expand and diversify our pipeline across a broad set of therapeutic areas, including oncology.

Today, we're excited to announce our proposed acquisition of Terns Pharmaceuticals. Its lead candidate, TERN-701, is a potent, orally available next-generation allosteric tyrosine kinase inhibitor being studied in certain patients with chronic myeloid leukemia or CML. We believe TERN-701 has the potential to be a best-in-class therapy, driven by high selectivity and an improved therapeutic index that could lead to efficacy advantages versus currently approved TKI agents. Patients with CML often remain on therapy for many years. And while significant advances have been made, there remains opportunity to further improve disease control and treatment outcomes.

In addition, challenges with today's treatments related to durability and tolerability lead to frequent switching. TERN-701 is designed to address these unmet needs and provide an important potential new option for patients. Given the size of the addressable population and the remaining unmet medical need, we believe TERN-701 has multibillion-dollar commercial potential and will be a significant driver of growth in the next decade.

This acquisition builds upon our deep expertise in oncology and strengthens and complements our growing hematology pipeline, which has significant future commercial potential as part of the oncology business unit under Jannie's leadership. More broadly, this transaction reflects our commitment to acting decisively when compelling science and value align and our confidence in the benefits TERN-701 will bring to patients while generating value for our shareholders over time. We're eager to welcome the talented Terns team to Merck and look forward to the contributions they will make as part of our organization.

With that, I'll turn the call over to Dean.

Thank you, Rob. Good morning, everyone. Our company has made remarkable progress in treating cancer, most notably solid tumors, but there is more work to be done. As we have advanced our oncology strategy and diversified our clinical pipeline, hematology has become a particular area of opportunity and interest. The acquisition of Terns provides our company with an opportunity to further investigate the potential of TERN-701 for certain patients with CML. CML is a slow-growing cancer derived from the bone marrow's blood forming stem cells and is characterized by a distinct translocation between chromosomes 9 and 22 known as the Philadelphia chromosome.

Historically, due to limited treatment options, the diagnosis of CML was almost universally fatal. The advent of tyrosine kinase inhibitors fundamentally transformed the treatment landscape and significantly improved outcomes for patients. Today, CML is generally managed as a chronic condition with many patients remaining on therapy for extended periods of time, often for many years. However, long-term exposure to existing therapies is associated with increased risk of relapse due to the emergence of resistant driver mutations, primarily in the kinase domain or active site of the [ BCR::ABL ] protein.

Similarly, while adverse events tend to appear in the first few months, the cumulative risk of developing intolerance to one or more TKI therapies increases with the duration of treatment and the number of lines of therapy. As many as 40% of patients treated with active site TKIs switch therapies within 5 years. In the second line and later settings, the majority of people with CML do not achieve a deep molecular response. So despite multiple available treatments, there remains significant need for further options.

The focus of development has therefore evolved with enhanced emphasis on increasing the depth of response and overall disease control while improving long-term efficacy, safety, tolerability and overall quality of life. TERN-701 is a potent, selective, oral next-generation allosteric BCR::ABL tyrosine kinase inhibitor. Unlike traditional active site competitive TKIs, TERN-701 is designed to specifically target a distinct site on the ABL protein that controls kinase activity, thereby overcoming mutations that occur in the kinase active site.

This differentiated mechanism is designed to inhibit the oncogenic driver while minimizing off-target effects. The high degree of target selectivity observed with TERN-701 supports the potential for higher dosing with more complete inhibition and an improved therapeutic index. TERN-701 has demonstrated preclinical activity against multiple resistance mutations, further supporting its continued evaluation across different lines of therapy.

In the ongoing Phase I/II CARDINAL study, TERN-701 has demonstrated promising activity in patients with Philadelphia chromosome-positive CML previously treated with at least 1 TKI with encouraging rates of major molecular responses and deep molecular responses observed by week 24, key measures of the reduction of BCR::ABL cancer cells. Importantly, these responses were achieved in a previously treated patient population with high disease burden, including those previously treated with multiple TKIs and even those who had previously relapsed while receiving Asciminib, the only allosteric TKI approved for treatment of CML.

We reviewed the totality of data for TERN-701 and estimate that the final MMR achievement using a more conservative intent-to-treat population would be approximately double the MMR and double to triple the DMR achievement of approved TKIs, including Asciminib. Based on this analysis, TERN-701 has the potential to be a best-in-class therapy for certain patients with CML. Furthermore, TERN-701 has also shown a faster kinetic response to achieving MMR and DMR than approved treatments, providing additional support for its potential best-in-class profile.

Safety is a critical consideration in CML given the long-term nature of treatment. To date, no dose-limiting toxicities have been observed for TERN-701 and the majority of treatment-emergent adverse events reported have been low grade. Furthermore, the overall safety and tolerability profile appears favorable with a low incidence of serious adverse events based on data available to date. Dose expansion is ongoing to further characterize the safety profile and inform optimal Phase III dose selection.

Looking ahead, we see an opportunity to apply our global clinical development capabilities to evaluate the potential of TERN-701. We intend to design a rigorous and appropriately powered clinical program that addresses both frontline and later-line treatment settings in CML. As with all of our programs, our focus will be on generating high-quality data that clearly characterizes TERN-701's benefit risk profile and supports its potential role in the treatment landscape. TERN-701 further augments and complements our growing and innovative hematology pipeline, spanning multiple modalities and disease areas.

In addition to our existing approval for KEYTRUDA, we have a series of pivotal readouts from a pipeline of innovative hematology candidates within the next couple of years, including Nemtabrutinib, our non-covalent BTK inhibitor, Bomedemstat, our LSD1 inhibitor and Zilovertamab vedotin, our ROR1 targeting ADC. As well as MK-1045, our CD19xCD3 T-cell engager, which is being evaluated in a Phase I/II study.

We believe TERN-701 provides a strong strategic fit within our broader hematology ambitions and reinforces our commitment to science-driven innovation with the goal of making a meaningful difference for patients over the long term. Finally, I'd like to reiterate Rob's comments and convey my admiration and respect to the Terns team for their remarkable achievements in discovering TERN-701 and advancing the science in this important disease area.

With that, I will turn the call over to Jannie.

Thank you, Dean. As both Rob and Dean highlighted, we are committed to advancing the science in hematology and an area of significant clinical need and opportunity to positively impact patients. Given our expanding pipeline, we are well positioned to launch several innovative therapies in the coming years. And so I am excited to add TERN-701 to our portfolio, and I'm confident in its potential to deliver meaningful benefit for patients. CML is a chronic disease that often requires long term and in many cases, lifelong treatment. As outcomes have improved, patients are living longer, which has contributed to the increasing prevalence of the disease over time.

Across the U.S., key European markets and Japan, there are estimated to be 18,000 new patients diagnosed with CML each year. As the treated population grows, factors such as tolerability and adherence have become increasingly important. Despite multiple approved treatment options, unmet need remains, particularly in the context of long-term duration. TERN-701 has the potential to be the best-in-class treatment for certain patients with CML. And as Dean noted, it will be complementary to our current hematology portfolio where we expect a cadence of launches over the next several years.

Given the substantial unmet need for additional options for certain patients with CML and the significant potential benefits of TERN-701, we believe it has multibillion-dollar revenue potential and can be a meaningful driver of growth beginning in the early 2030s and continuing through the next decade.

With that, I will turn the call over to Caroline.