Merck & Co., Inc. (MRK) Earnings Call Transcript & Summary

Thank you for standing by. Welcome to the Merck & Co., Inc. ESMO Virtual Investor Event. [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, Vice President, Investor Relations. Sir, you may begin.

Thank you, Jill. Good morning, afternoon and evening, everyone. Welcome to Merck's investor event coinciding with the European Society of Medical Oncology Annual Meeting. Thanks to all of you who are tuning in on a Sunday. This is a virtual call with Merck participants calling from both Madrid, Spain; and here in Rahway, New Jersey. We're excited to have this opportunity to speak to you about the substantial data Merck and our collaborators presented this weekend at ESMO and to also highlight the excitement we have around our newly announced collaboration with Daiichi Sankyo. During today's call, a slide presentation will accompany our speakers' prepared remarks, and it has been posted to the Investor Relations section of Merck's website. Before we get started, we would 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 Merck'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 2022 10-K, which identify certain risk factors and cautionary statements. I would now like to introduce Dr. Dean Li, President, Merck Research Laboratories, who will outline our agenda and make a few opening remarks. Dean?

Thank you, Peter. Thank you all for taking the time to join us. Today I will start with our new strategic collaboration with Daiichi Sankyo, announced on Thursday, and then hand over to Eliav to provide details regarding the candidates covered by the collaboration, and then Marjorie will review clinical highlights from data presented at the ESMO Congress. We are also joined by my colleague Jannie Oosthuizen, President, Human Health U.S., who is here to address questions from a commercial standpoint. As I have previously indicated, our oncology strategy remains focused on leveraging the antitumor properties of KEYTRUDA to establish a diverse clinical pipeline of candidates with novel mechanisms and modalities. This is based on 3 strategic pillars immuno-oncology, precision oncology, and tissue targeting. In immuno-oncology, we continue to evaluate KEYTRUDA in the metastatic and increasingly in earlier-stage disease settings, while also investigating multiple novel immuno-oncology combinations and coformulations. With precision oncology, we are selectively modulating pathways to inhibit cancer cell growth and in tissue targeting, we are developing agents such as antibody-drug conjugates designed to enhance cancer cell sensitivity and increase cell killing. Last week, we announced an important strategic collaboration with Daiichi Sankyo. Daiichi Sankyo scientists have a world-renowned reputation for their pioneering work in the design, engineering and development of antibody-drug conjugates with proven benefit for patients with cancer. This platform provides tremendous opportunity to evaluate the antitumor efficacy of promising ADC candidates targeting tumor cell surface receptors. By combining our respective strengths, we are well positioned to accelerate clinical development for 3 promising, potentially first-in-class candidates targeting multiple tumor types. Our companies share a passion for innovative medicines and for improving the lives of patients worldwide. With that, I will turn the call over to Eliav to provide further details of the ADCs that form the basis for our agreement with our colleagues at Daiichi Sankyo. Eliav?

Thank you, Dean, and good afternoon, everyone. Good evening. It's great to be here at ESMO to provide an update on our oncology development program and the significant progress we are making. Now I will provide you with additional perspectives on our oncology strategy and our new collaboration with Daiichi Sankyo, before turning it over to Marjorie. Although we've made remarkable progress to date in treating cancer, we recognize that there is more work to do to help patients and their families who are dealing with this devastating disease. To address this unmet need, we have a robust oncology pipeline of 25 partnered or wholly-owned assets spanning a range of mechanisms of action. As Dean highlighted, we are pursuing an oncology strategy focused on boosting antitumor immune responses, modulating molecular pathways that inhibit cancer cell growth, and tissue-targeting strategies such as antibody-drug conjugates to increase cancer cell sensitivity to tumor-killing drugs. We're studying multiple exciting compounds in each of these areas, many of which are being evaluated in combination with our foundational anti-PD-1 agent KEYTRUDA. And all of this is underpinned by our excellent discovery pipeline that gives us the confidence that we are going to sustain our leadership position in oncology with new and differentiated molecules that will improve outcomes for patients. In the next 3 slides, I will focus on our work to develop antibody-drug conjugate medicines to selectively deliver potent cytotoxic agents to cancer cells. Now, we're very excited to begin work as part of this new collaboration and to combine each company's unique strengths for the benefit of patients. Daiichi Sankyo has a proven track record of pioneering next-generation ADCs, having been a leading innovator across 3 critical components of an optimally constructed treatment, which includes the antibody, the linker, and the payload. Merck has a proven track record in oncology clinical development, and the collaboration will benefit from the ability to leverage our clinical trial expertise and global scale. KEYTRUDA's position as a foundational anti-PD-1 provides us with a wall of data across many tumor types and the ability to study in combination with ADCs to advance standard of care. As Marjorie will discuss, KEYNOTE-A39 provides a prime example of the potential for regimens of KEYTRUDA in combinations with high-quality ADCs. Together, we look forward to having a meaningful impact on patients with cancer. Now the collaboration includes 3 programs addressing novel targets and across several tumor types, each with a potential to be first in class. The first one, patritumab deruxtecan, or HER3-DXd, is an investigational fully-human anti-HER3 monoclonal antibody attached to a topoisomerase I inhibitor payload. HER3 is a member of the EGFR family of receptor tyrosine kinases that is separate and distinct from HER2. Approximately, 83% of primary non-small cell lung cancer tumors and 90% of EGFR-mutated tumors following EGFR tyrosine kinase inhibitor treatment express HER3. There is currently no HER3-directed therapy approved for the treatment of cancer. HER3-DXd is currently being evaluated as monotherapy and in combination with other agents in a global development program, which includes multiple clinical trials of patients with EGFR-mutated non-small cell lung cancer. Recent data from the HERTHENA-Lung01 study demonstrated that HER3-DXd provided clinically meaningful and durable efficacy in patients with advanced EGFR-mutated NSCLC that progressed following EGFR TKI and platinum-based chemotherapies. HER3-DXd was granted Breakthrough Therapy designation by the FDA in December 2021 for the treatment of patients with metastatic or locally advanced EGFR-mutated non-small cell lung cancer with disease progression on or after treatment with a third-generation tyrosine kinase inhibitor and platinum-based therapies. A Phase I/II trial in patients with HER3 expressing metastatic breast cancer has also been completed. Interim results of Phase II part A, which evaluated heavily pretreated metastatic breast cancer patients were presented at ASCO in June. HER3-DXd showed acceptable safety and encouraging efficacy across the broad range of HER3 expression. The second asset is I-DXd or ifinatamab deruxtecan, also known as DS-7300. This is an investigational humanized anti-B7-H3 or CD276 monoclonal antibody attached to a topoisomerase I inhibitor payload approved for the treatment of cancer. Now DS-7300 is being evaluated in a global development program, which includes a Phase II monotherapy trial in patients with previously treated extensive stage small cell lung cancer and a Phase I/II first-in-human trial. Phase I/II interim data were presented at ESMO 2022, which demonstrated encouraging efficacy and manageable safety in patients with several types of heavily pretreated cancers, including lung, prostate, or esophageal cancer. Further data at WCLC 2023 continued to demonstrate promising efficacy in patients with heavily pretreated small cell lung cancer. A dose optimization Phase II study for patients with small cell lung cancer started in June 2022 and data from this study are expected in 2024. Now, the last of the 3, is R-DXd or raludotatug deruxtecan or DS-6000, an investigational humanized cadherin 6 or CDH6 targeted monoclonal antibody attached to a topoisomerase I inhibitor payload. Now, CDH6 is overexpressed in several cancer types and is associated with tumor growth and proliferation. No CDH6-directed cancer therapies are approved for the treatment of cancer. DS-6000 is being evaluated in Phase I trials for the treatment of ovarian cancer. Interim Phase I results showing early clinical activity in heavily-pretreated patients with advanced platinum-resistant ovarian cancer and renal cell cancer were presented at ASCO 2022. And in fact, just earlier today, updated results from a subgroup analysis from the Phase I study show that DS-6000 continues to demonstrate promising clinical activity in patients with heavily-pretreated, platinum-resistant advanced ovarian cancer. Along with our partner Daiichi Sankyo, we plan to rapidly advance the development of these 3 ADCs with speed and rigor, exploring their potential across a range of indications. So now we have a broad portfolio of 6 distinct clinical ADCs targeting different tumor enriched cell surface receptors across a spectrum of tumors. So how are we going to develop all of these drugs efficiently for the benefit of cancer patients? Well, our partnerships with Daiichi Sankyo and Kelun-Biotech give Merck the opportunity to create precision medicine treatment strategies that target each tumor focused on the right medicine, at the right time, and with the right enhancement of chemotherapy activity. With the extraordinary assets from Daiichi Sankyo, we are focused on a variety of thoracic malignancies, including a variety of segments of non-small cell lung cancers as well as small cell and ovarian cancers, places where either KEYTRUDA is foundational or we can now build new capabilities and a new presence. These 3 programs complement our ongoing productive collaboration with Kelun-Biotech. We are very encouraged by the progress of our TROP-2 ADC program, and we have recently posted our initial Phase III trial in patients with certain non-small cell lung cancers. In addition, MK-1200, a Claudin 18.2 ADC, is in Phase I in advanced GI tumors. This ADC has shown encouraging efficacy, and we anticipate advancing it quite rapidly. There is another clinical ADC and several other earlier ADCs with undisclosed targets that we are evaluating as well. So together, our programs in collaboration with Kelun are highly complementary to what we have added to our new collaboration with Daiichi Sankyo. So when you think about our overall ADC strategy, I imagine a roof with really strong slate tiles, each of them unique and with slight overlap in particular areas of need. But the overall picture is 1 of really complete and sturdy coverage of the entire surface of cancer. We have what we believe to be the potentially best-in-class suite of ADCs that will complement our foundational IO platform with KEYTRUDA as well as other targeted agents. With this extensive pipeline and the strength of KEYTRUDA, we can hope to create regimens with the potential to have unparalleled efficacy for patients both early and late-stage cancers. Now, with that, I will turn it over to Marjorie, who will provide detailed highlights of the robust data presented at ESMO. Just as a reminder, Marjorie joined Merck earlier this year. Her deep understanding of ADCs, including the linkers, the payloads, and antibodies, as well as an understanding of how ADCs are potentially combinable with other agents, such as pembrolizumab, has greatly enhanced our scientific and operational prowess. So, Marjorie?

Thank you, Eliav. Good evening, good afternoon, everyone. It's my pleasure to provide highlights of our important data continue to extend and deepen our reach in oncology, as evidenced by the robust data presented this weekend from 4 approved medicines and 3 pipeline candidates across the more than 15 types of cancer. The breadth and depth of datasets showcase our leadership in oncology, both in earlier stages of disease as well as our foundational position in metastatic cancers. Today, I will focus on a few featured Phase III programs from our approved medicines, KEYTRUDA and WELIREG, and also touch on data from novel pipeline molecules, including MK-2870, our TROP-2 ADC; and MK-1084, our KRAS G12C inhibitor. Starting with our Phase III dataset. Diagnosing and treating cancer at an earlier stage may give patients a greater chance of long-term survival. That is because many cancers are considered most treatable and potentially curable in the earlier stages of the disease. Unfortunately, many patients with resectable stage II, IIIa, and IIIb non-small cell lung cancer will experience recurrence even after surgical resection and chemotherapy. KEYNOTE-671 is an important trial for people with earlier stages of lung cancer, and I'm pleased to present the full dataset. In this study, KEYTRUDA in combination with chemotherapy given as neoadjuvant therapy, followed by surgery and then adjuvant single-agent KEYTRUDA, was compared with preoperative chemotherapy followed by surgery, and then placebo for patients with resectable stage II, IIIa, or IIIb non-small cell lung cancer. The KEYTRUDA regimen demonstrated a clinically meaningful and statistically significant overall survival benefit, reducing the risk of death by 28%. The OS benefit was generally consistent across subgroups. KEYTRUDA as used in KEYNOTE-671 is the first and only anti-PD-1 therapy to demonstrate an overall survival as well as event-free survival benefit in the neoadjuvant or adjuvant therapy in resectable non-small cell lung cancer. KEYNOTE-671 is the 7th Phase III trial of lung cancer utilizing KEYTRUDA to demonstrate a statistically significant overall survival benefit. This data adds to the meaningful impact KEYTRUDA is having across the spectrum from the metastatic setting into earlier stages of disease. This reinforces the need for early detection through improved lung cancer screening, and with earlier diagnosis, people have an option to treat their cancer earlier. Moving to our next potential practice-changing dataset is data from KEYNOTE-A39, otherwise known as EV-302. Note, while all the datasets presented this weekend are really important advances for patients, this trial is especially dear to my heart. During my time at Seagen, another company I worked with closely with the teams of Seagen, Astellas, and Merck, and I couldn't be more proud to see this completion here at Merck. This data is the first ADC/IO combination to show overall survival improvement in a Phase III study and is important as there have not been advances in the first-line treatment of metastatic urothelial cancer in over 20 years. This represents a confirmatory trial to the KEYNOTE-869, EV-103 study, and forms the basis for seeking full approval for patients who are ineligible for cisplatin chemotherapy. Also forms the basis for seeking approval to extend patients eligible for cisplatin chemotherapy. When you look at the overall survival advantage with more than a 50% reduction in the risk of death from cancer, the benefit is consistent across all predefined subgroups, including PD-L1 status, type of chemotherapy given, as well as sites of disease. The combination of KEYTRUDA with enfortumab vedotin shows a manageable safety profile and reflects the individual toxicities of each of these drugs. Moving on into women's cancers. We remain committed to achieving better outcomes for these people who have malignancies of breast and gynecologic tumors, notably in the earlier-stage setting where we can have the most meaningful impact and improved prognosis. First, in cervical cancer, cervical cancer remains the foremost common cancer despite the availability of preventative agents such as GARDASIL. For women with locally advanced cervical cancer, there has not been an innovation in standard-of-care therapy since 1999. Data from KEYNOTE-A18 is a tremendous leap forward for patients. KEYTRUDA in combination with concurrent chemotherapy radiation is the first and only regimen with a checkpoint inhibitor to demonstrate statistically significant and clinically meaningful improvements in progression-free survival for people with newly diagnosed, high-risk, locally-advanced cervical cancer when compared to standard-of-care therapy. The use of a KEYTRUDA-based regimen reduced the risk of disease progression or death by 30%. The data supports the potential of this regimen to become a new standard of care and again is a leap forward for women who have this locally-advanced burdensome disease. Next, moving to breast cancer, we are generating more evidence of the benefit of treating breast cancer in earlier stages where the immune system is more robust. Hormone receptor positive, HER2 negative breast cancer is a heterogeneous disease that historically has not been considered to be immunogenic. Promising data from KEYNOTE-756 showed that adding neoadjuvant KEYTRUDA to standard-of-care chemotherapy improves the pathologic complete response or the ability to eradicate cancer in the breast and the lymph nodes at the time of surgery. This led to a statistically significant increase in pathological complete response by an estimated 8.5 percentage points compared to chemotherapy alone, regardless of PD-L1 status. At this early time point, event-free survival results are immature and continue to be evaluated. Finally, in triple receptor negative breast cancer, we have updated results from KEYNOTE-522. Since approval of KEYNOTE-522 regimen in triple receptor negative breast cancer in the neoadjuvant and adjuvant setting, we've seen the significant impact this regimen is having for people who have high-risk, early-stage, triple receptor negative breast cancer [ type ]. After a median follow up of more than 5 years, data from KEYNOTE-522 shows a maintained clinically meaningful improvement of event-free survival. These results provide further support for KEYTRUDA plus platinum-containing neoadjuvant chemotherapy followed by adjuvant pembro after surgery, regardless of the PCR outcome as a new standard-of-care treatment regimen for patients with high-risk, early-stage TNBC. Follow up for overall survival is ongoing. Next moving into Belzutifan in advanced renal cell carcinoma. The treatment landscape for patients with advanced renal cell carcinoma has changed tremendously over the past few years, with many therapies such as VEGF-TKIs and IO therapies such as KEYTRUDA moving into the frontline setting, there becomes an increasing need for novel therapies for patients who have received these types of treatments in the past. LITESPARK-005 is the first positive Phase III study in patients with advanced kidney cancer following immune checkpoint and antiangiogenic therapies. In this study, Belzutifan was compared with everolimus, and Belzutifan demonstrated a 26% reduction in the risk of progression or death when compared to standard-of-care therapy. Of note, almost 23% of patients achieved an objective response rate when compared to single-digit response rates with everolimus. And for those people who obtained an objective response, the median duration of response was over 19 months. Belzutifan was well tolerated and adverse events were consistent with the known safety profile of the drug. The data from LITESPARK-005 demonstrates the potential of Belzutifan for certain previously treated patients with advanced renal cell carcinoma, and we look forward to the 3 additional ongoing Phase III studies in combination with pembrolizumab and/or lenvatinib in the advanced and adjuvant RCC setting. Moving to important data from our pipeline assets. First, in the ADC field with MK--2870, our TROP-2 ADC that we are developing in collaboration with Kelun, and we are excited that Kelun announced a positive Phase III study of MK--2870 as the treatment of patients who have metastatic triple receptor negative breast cancer that they studied in China. It helps to demonstrate the potential of this ADC in breast cancer. At ESMO, data in the HR positive/HER2 negative metastatic breast cancer setting was presented. This data demonstrated an objective response rate of almost 37%, a duration response of 7.4 months, and a median progression-free survival of over 11 months. The safety profile was manageable with no occurrence of drug-related interstitial lung disease and treatment-related AEs which led to treatment discontinuation or death. This data supports our efforts as we look to advance the broad global clinical development program. As Eliav stated, we recently posted our first Phase III trial in previously-treated non-small cell lung cancer with EGFR mutations or other genetic aberrations, and we look forward to continuing to develop a broad development program. Finally, moving into the KRAS inhibition space. KRAS oncogene is an important driver of abnormal cancer cell growth. MK--1084 is a highly selective oral KRAS G12C inhibitor. Early but encouraging data provides promising evidence of antitumor activity in patients with previously treated solid malignancies and previously untreated non-small cell cancer whose tumors harbored KRAS G12C mutations. Importantly, on the safety and tolerability profile, we are encouraged by the numerically low rate of high-grade toxicities reported of MK-1084 as monotherapy as well as in combination with KEYTRUDA. The efficacy is also encouraging as overall response rate noted here of April 2023 is 47%, and we have updated data which will be presented tomorrow. Thank you for your attention, and I'll now turn it back to Dean for some closing comments.

Thank you, Marjorie. To summarize, the data sets presented at ESMO and covered during this session provide tangible signs of progress across our broad oncology portfolio within our 3 strategic pillars: immuno-oncology, precision oncology, and tissue targeting. In immuno-oncology, we are building on our strong foundation with important progress in earlier stage disease. A special note is the recent FDA approval based on KEYNOTE-671. This approval represents the first PD-1 therapy to demonstrate an overall survival and event-free survival benefit as perioperative treatment in non-small cell lung cancer. In precision oncology, we touched on the important data and ongoing work for Belzutifan as well as for our KRAS G12C inhibitor, MK-1084. And in tissue targeting, through new and continuing collaborations with Daiichi Sankyo and Kelun-Biotech, we are expanding and advancing our pipeline with 6 distinct clinical ADCs targeting different tumor-enriched cell surface receptors across a spectrum of tumors in clinical development. As you can see, we are moving with urgency to progress, augment, and diversify our oncology pipeline across multiple mechanisms, and modalities that have the potential to transform treatment paradigms as we look to treat more patients. Now I will turn the call back to Peter to start the Q&A.

Thank you, Dean. And as a reminder for the Q&A session, along with Dean, Eliav, and Marjorie, we are joined by Jannie Oosthuizen, President of our U.S. Human Health Business, who can respond to any potential commercial questions. So Jill, we're now ready to take questions.

[Operator Instructions] Our first question comes from Umer Raffat with Evercore.

I wanted to understand the ILD profile of your HER3 ADC and how do you compare that with your Kelun TROP-2 as well as the AstraZeneca TROP-2, as well as do you intend to study the HER3 ADC broadly in lung because it looks like the TROP-2 might have been selected as being the broad candidate?

Yes, so this is Dean. Why don't I send this first to Marjorie, who has the deepest experience and understanding of ADCs, and then ask Eliav to comment from a broader clinical development standpoint. Marjorie?

Yes. There are no comparative studies of these agents, so all we can do is comment on the published individual datasets seen to date from each of these agents. And so with the MK-2870, there have been minimal reports of interstitial lung disease in the datasets that we have seen to date. The AEs reported have been primarily hematologic in nature, as well as some other typical side effects that you'd expect from an ADC with a cytotoxic payload. The HER3 ADC, deruxtecan ADC, does have the deruxtecan payload, which has been associated with ILD, as have many ADCs that are out currently on the market. I think it's still early days for this asset, but the AE rate is not higher than you would anticipate from a deruxtecan payload.

Yes. And I would just add that I think that the 2 assets are again very complementary because if you think about the AE profiles, they're somewhat different, and therefore, may have interesting ability to combine in different ways. In addition, I would propose that with 2870 we're able to advance the compound now with Pembrolizumab and with monotherapy. With HER3, we're really excited by the data. You've seen the initial results. The drug has a very different AE profile than 2870, and I think we can create strategies that would make these drugs complementary just as I mentioned. I'd point out that HER3 ADC as well as 2870 will be developed in different elements -- different parts of the lung cancer spectrum. This is a huge cancer, and again, we see great complementarity and the ability to fully develop both assets with our colleagues in Daiichi Sankyo on 1 hand and Kelun.

Your next question comes from Luisa Hector with Berenberg.

And congratulations on ESMO today and the standing ovation. Good to see. Now, I just wanted to come in with more questions on Daiichi Sankyo, please. Why partner now on all 3 of those assets? So I guess just maybe a bit of background in the build up to that collaboration. And does Merck have any internal ADC capabilities? And then on the funding of the R&D, the first 75% rather than 50%, which I think is up to $2 billion per asset, can you talk a little bit about that split? And does that signal extension of development beyond the tumor types you listed on slide 11? And so any opportunities for broader tumors that you might mention upfront, and potential combinations with Merck assets?

Luisa, so this is Peter. Just to be clear, there's 1 of the 3 assets that we will be responsible for this first 75% up to $2 billion, and that's the CDH6. So if you look at the press release, I think it's clearly stated there. Dean, do you want to take the...?

Yes, I think there were 2 other parts of that question. One was, do we have internal capabilities in terms of antibody drug conjugates? And the answer is absolutely yes. And then the other question was related to why now, I think that was the question. And I just want to be really clear. When we're talking about all the ADCs that we have made public here, there are clear indications and line of sight that is publicly available. But I want to just make sure that everyone understands that those are a subset of the indications. The second point that I would make is that these ADCs, it'll be important to see, like everything in cancer, what they do in combination. Where appropriate, it could be PD-1; where appropriate, it could be other chemos or other ADCs; where appropriate, it could be a RAS inhibitor; where appropriate, it could be a novel hormonal agent; where appropriate, it could be a PARP. And so this issue of moving from those clear indications to broader indications and thinking about combinations also have to calculate this question of we're focused on late stage, and there will come a time where we're going to have to ask ourselves similar to PD-1, similar to chemo itself, at what point do you go from later stage to earlier stage? So all those 3 considerations makes it an ideal time for us to partner with both Kelun and with Daiichi Sankyo.

Luisa, it was a little hard to hear all of your question. I just want to make sure that we responded to everything that you asked.

Yes, actually, everything was covered.

Next question comes from Trung Huynh with UBS.

Trung Huynh from UBS. So, firstly, congratulations on the deal with Daiichi. With some of the data, the KEYNOTE-A39 especially, it's the first time we've seen OS advantage over chemo. And during your talk just now, you were talking about potentially combining ADCs with pembro. I'm wondering your thoughts on combination studies with some of the novel coformulations that you have in house, things like the LAG-3, the TIGIT. Mechanistically, does this have value? And do you have any plans here? And then, second question, just wondering the possibility about creating a fixed dose combination with an ADC and an IO like KEYTRUDA. Is there any pharmacokinetic reason why you couldn't do that?

So why don't I just hand this first to Marjorie and Eliav, and then I may make some remarks after that. And I think the question was around whether or not you could combine an ADC with IO combinations, IO combinations that have not -- where we're doing studies but they haven't read out yet. And then I think the other question was fixed dose combinations between an IO and an ADC. Marjorie and Eliav?

Yes. Maybe I'll start first and talk a little bit about potential additional combinations. So I think ADCs have advantages over historic systemic chemotherapies, in that you're able through the targeting and the construct of the linker and the payload, to deliver more potent cytotoxic therapies to tumor cells, and with the potential to diminish the off target toxicities in the remainder of the body. And so one of the goals of ADCs is to replace chemotherapy. And so in thinking about a development plan, you can do that as a monotherapy. You also could do that potentially in combinations like you heard of earlier where they are established therapies and standard-of-care. And so, for example, KEYNOTE-189 in first line non-small cell lung cancer has set a very high bar for what efficacy can do. And so you could predict that if there is ability to combine with a PD-1 inhibitor, that might be something that you do is try to replace chemotherapy. And so, to date, the coformulations really are still in studies, as Dean stated. And so if there are data that supports that they are superior in combination with chemotherapy to current standard-of-care, it would make sense to try to replace chemotherapy with an ADC if appropriate and based upon what data you might be able to see in early studies. Eliav, did you want to add anything to that?

Yes, I think that 1 of the advantages of working with Daiichi Sankyo and their extraordinary ADCs is our ability to provide access to a whole set of medicines that are foundational like KEYTRUDA, but also with different kinds of other medicines that I think would be quite exciting to look at specific subsets of patients. And it's for that reason that we're definitely going to be looking at combinations. As you noted, the coformulations with KEYTRUDA are in clinical trials, and we'll have to see what the results of those trials are before we progress to doing triplets. One of the other things you asked about is fixed dose of KEYTRUDA and ADC. That is probably not a great -- won't be something we'll be doing simply because it's important for physicians. Unlike the IO-IO drugs, it's important for physicians to be able to control the dosing and control the AE to reduce doses or to change doses with adverse experiences. So whereas coformulations of IO with IO are reasonable, I think with a chemotherapy agent, including ADCs, we'd want to keep those 2 medicines separate so that we can have independent action on the physician side to manage the patients through those therapies.

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

This is Conor MacKay on for Evan. Can you just please expand a bit more on your confidence in Daiichi's platform and how it's differentiated from peers?

I'll let Marjorie and Eliav answer, but I would just say that when you look at the construct of Daiichi Sankyo that are in the clinic and approved, I think that gives the field and I mean the field, not just us, but patients and providers' confidence in their platform. But Marjorie and Eliav?

Dean, and I would agree with that. I think their platform has already got proven activity based upon data that's been seen within HER2, as well as with data of DXd. Antibody drug conjugates are quite complicated to manufacture. And so it's not only the antibody structure itself and where it binds to an antigen, the linker and how the linker is cleaved, both from the antibody as well as from the payload, and the payload itself. And so the platform technology that Daiichi Sankyo has created has already proven itself in clinic. And so I think that it is differentiated that way because it already has established launch medication. So we're very confident in our ability to work with Daiichi based upon their performance to date.

And I would say that from the thinking about how this platform is complementary, the platform that we currently have with Kelun. I think the Kelun-Biotech platform is really robust as well. And I think that between the 2 structures, the 2 platforms, we can create different combinations with different AE profiles in different tumors. I think that the data that we currently have with the 2 ADCs we've now disclosed are really very encouraging. And I think that the AE profiles of each of these allow us to apply them for specific areas and specific cancers in terms of the combinations that we could contemplate. And again, I think that the tumors that we're going to go into are in general complementary. There's going to be a little bit of overlap, as I mentioned, just like you'd think about it with a slight roof, to use the analogy. But overall, I think that this group of 6 will give us a really broad platform that will enable us to manage different settings, different combinations, different cancers, early and late, and allow us to develop the ADC field with the same kind of intensity that we developed KEYTRUDA over the past few years.

Our next question is from Louise Chen with Cantor.

So I wanted to ask you about the assumptions that went into your statement in your press release on the Daiichi Sankyo agreement that these programs have multibillion-dollar worldwide commercial revenue. Just curious how you're thinking about that when you say approaching the [ mid-2030 ]. And then if you could elaborate a little bit more on the market opportunity for KEYNOTE-671, that would be helpful.

I am so thankful that someone asked me a question about KEYNOTE-671, which I think is really important. But before we'll take care of your ADC question with Jannie, and then we'll take care of your 671 question with Marjorie, Eliav, and then Jannie again. But Jannie, the first question about the ADCs.

Yes. Louise, so in terms of the ADCs, despite the major advances we've made in the last 10 years across multiple tumors and lines of treatment, there's still significant unmet need that obviously exists within cancer treatment. So we are really excited to be part of this new modality with a total of 6 ADCs now, and these 3 from Daiichi Sankyo in particular, to continue to pursue indications and lines of therapy that will bring significant -- or that will address the significant unmet need that still exists. We view these 3 ADCs as having potential to be used across multiple tumors and at an aggregate level. We view on a risk-adjusted basis that these 3 assets will have multibillion-dollar potential. And each asset on a non-probabilized basis will have multibillion-dollar potential. So we are very bullish in terms of where we think our scientists will go with these 3 ADCs. And at the end of the day, really address significant unmet need.

Yes. So I'll give it to Marjorie and then Eliav for KEYNOTE-671. But I just want to start off, we're talking about lung cancer, the #1 cancer killer of men and the #1 cancer killer of women in the United States and the world. So I think the 671 data is very important for the field if we're serious about really addressing cancer mortality in this country and globally. Marjorie, do you want to take it? And then Eliav, and then I'll turn it to Jannie to speak about the dynamics of the market.

671 is a special study. It was carefully designed and executed to really determine not only could KEYTRUDA in combination with chemotherapy prior to surgery and then adjuvant KEYTRUDA improve event-free survival, but it also was actually designed to do the coprimary test of overall survival. And the other studies haven't really been designed that way. Overall survival is a secondary endpoint. And we really are thankful that we designed the studies that way because with 36 months of median follow up, we've already demonstrated an overall survival advantage that's not only clinically meaningful but statistically significant. And I think that really is important for clinicians and patients because it gives certainty that the data that you're giving can improve overall survival. And these are people who historically they considered lung cancer a death sentence. And so having a regimen that's proven to not only keep cancer from progressing, but to help people live longer is just really, I think, a tremendous step forward in the field. And in the sessions here at ESMO, one of the speakers talked about this as something that really is transformative in the field. There has not been a study that's shown improvement in overall survival in this perioperative space in over 30 years. And then another speaker put a gold medal next to it because there the overall survival advantage has improved. And so I think that that's very compelling for clinicians because when you're giving a regimen, you always want to make certain that the benefits are there and overall survival is the gold standard of endpoints. So when we get an event-free survival, we're very happy with that. But the overall survival is, I think, what really makes us special and resonates with both physicians and patients.