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

Thank you for standing by. Welcome to the Merck & Co., Inc., Rahway, New Jersey USA Investor Event 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 very much, Denise, and good evening, everyone. Thank you very much for making the effort to be with us here in Chicago, and welcome to our investor event at ASCO. Thank you also to everyone tuning in via the webcast. So we're very excited, obviously, to have this opportunity to speak to you about our 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. But 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 2024 10-K, which identifies certain risk factors and cautionary statements. I'd now like to introduce Dr. Dean Li, President, Merck Research Laboratories, who will open with a few remarks and outline our agenda and speaker lineup. Dean?

Thank you, Peter, and good evening, and welcome. And we're pleased to host this annual event focused on oncology. What I would say that I've said to many of you is that since 2021, what Rob Davis, the COI and I have done since we took our roles is that we said that there's 2 major goals. One is, first, to diversify across oncology using the power of KEYTRUDA. And the second is to expand in additional therapeutic areas such as HIV vaccines, immunology, cardiovascular and ophthalmology. But the focus today at ASCO will be on the substantial progress of oncology programs. And KEYTRUDA has been a source of extraordinary impact for the world and for medicine and for Merck. It's been such an important medicine with a remarkable impact for patients and provider. It's been a driver, as you've seen here of many of the important contributions made across our entire oncology portfolio. To date, our portfolio has yielded 35 Phase III oncology trials with statistically significant overall survival, 56 FDA-approved indications and a significant impact to patients with more than 3.4 million treated globally. And what we intend to do is to leverage our proven track record advancing the standards of care to sustain our leadership in oncology beyond the LOEs of KEYTRUDA in 2028 and 2031 and in 2032. And so here's a graph the evolution of KEYTRUDA approval. Since 2020, there's been a continuing expansion of KEYTRUDA from 26 to 41 indications and growing across 18 tumor types and tumor agnostics, 2 tumor-agnostic indications. And essentially, KEYTRUDA has laid a road map across solid tumors and increasingly in the earlier stage and curative intent setting. So in the light green, you can see 9 approvals in the earlier stage. And as Marjorie and Eliav will suggest is we hope to have that turn into 10. And 4 of the current approvals are based on studies that have already shown overall survival and recognize that we have many more opportunities brewing in the earlier stage. The power and the broad impact of KEYTRUDA provides us a road map for the future as we diversify our portfolio in oncology, and we listed the 4 sort of major topics that we'll be talking about here. First, the progress made in curative intent setting, including more accessible options and new treatment paradigms. And what do I mean by that? In terms of more accessible options, it's a subcu administration has a potential to be an important option in earlier-stage setting, can enable access in health care settings closer to the patient's home, doesn't always require a highly skilled oncology nurse to access support. You could provide access to subcutaneous pembrolizumab in a non-infusion center such as a physician's office. And Marjorie will touch on subcu pembro. This injection was specifically designed to be administered within 2 minutes, so very easy and very fast. We are also defining in the earlier stage, defining new populations such as pathologic complete responders and nonresponders following surgical resection. And we think that separation of those populations create a platform for us to, for example, really think about how we can do more good for those who are nonresponders. And in our collaboration with Moderna and developing INT and individualized neoantigen therapy, which essentially for the last 30 years is making the promise of a cancer vaccine go from impossible and improbable to possible. We are also studying in earlier stages, which we're also studying in earlier stages in melanoma and in non-small cell lung cancer and those that are PD-1 and immuno-oncology sensitive. The second is the combination of KEYTRUDA with chemotherapy that has absolutely been transformative. Often people throw the words of being KEYNOTE-189 in the late stage of cancer and KEYNOTE-671, but it's actually true in many other cancers than just lung cancers. And we ask how can KEYTRUDA amplify the impact of next-generation chemo. And so we have antibody drug conjugates, and we're advancing next-generation chemo with a broad ADC program. And what we outlined there is we have 9 ADCs clearly in the public domain, 5 which we will touch to on today, but we will really give a context around which is sac-TMT which is probably the furthest along, but the other ones are right behind it. And in that one, we have 14 studies that's publicly acknowledged. And of those 14, 9 of them are in indications where we believe that we're clearly going to be first and in the other ones where we will be clearly differentiated. Third, we also understand the power of KEYTRUDA to potentially think about opportunities for chemo-free regimens. And we'll touch on this. We're focused on doing this with MK-1084, our KRAS G12C, which is designed to be highly potent and highly combinable with potential benefit in both earlier and late stages of cancer. And Marjorie and Eliav will speak more about it momentarily. And finally, we also have learned where PD-1 or KEYTRUDA has not been as effective, and it has taught us ways and mechanisms and avenues for us to tackle these areas such as small cell lung cancer, MSS CRC and in heme. And this has led us to go into other agents, including KRAS G12C, but also T cell engagers, ADCs and combinations amongst them. So today, we hope to just give you a flavor of our broad efforts across oncology, across early and late phase, across multiple mechanism of actions and across multiple modalities. And by focusing on a subset of our robust registrational clinical trial portfolio, I hope to give you an insight into the strategic context and importantly, the timing of these readouts. So first, Marjorie Green will provide recent notable data updates from ASCO, AACR and the European Lung Cancer Congress. Then Dr. Eliav Barr will take a more expansive view of our oncology development strategy, providing compelling examplar of our strategy in action, including how we are leveraging our foundational position in immuno-oncology and advancing combinations to improve standard of care. And finally, Chirfi Guindo will provide an update on the commercial landscape and the opportunity that we have to positively impact patients with cancer. I'll end with brief closing remarks prior to opening the session for Q&A. And now I'll turn the podium over to Marjorie.

Thank you, Dean, and hello, everybody. We're excited about the data that we presented earlier this year as well as at ASCO, and we continue to make significant progress in our portfolio. One advance has been the development of a subcutaneous fixed-dose combination of pembrolizumab with berahyaluronidase alfa. We presented the results of D77 at ELCC, evaluating the combination of pembrolizumab and berahyaluronidase alfa with chemotherapy compared with IV KEYTRUDA combined with chemotherapy in non-small cell metastatic lung cancer. The study met its primary end point showing comparability of PK between the 2 different treatments when you're looking at the subcu formulation compared to IV and demonstrating noninferiority. Important secondary efficacy end points, which were descriptive, show that response rate, progression-free survival, duration of response were all consistent between treatment arms. Median overall survival was not reached in either arm. The median injection time for subcutaneous pembrolizumab in D77 given on an every 6-week schedule was 2 minutes. Clinicians can have confidence that the subcutaneous co-formulation of pembrolizumab, which is currently under FDA and EMA review, can provide the same benefit they've seen with IV KEYTRUDA, but with the patient benefit of a median injection time of 2 minutes. Moving on to more KEYTRUDA news is Dean spoke about our ambition of moving KEYTRUDA as well as other agents in our portfolio into earlier lines of therapy, whether it's in the first line of metastatic cancer or into the curative setting. We have the biggest opportunity to impact public health in cancer by treating people when they're either first diagnosed or in, again, the curative or in the metastatic setting. KEYNOTE-689, which was initially presented at AACR and subsequently updated at ASCO, evaluated patients with resectable locally advanced head and neck squamous cell carcinoma and demonstrated that the use of 2 cycles of neoadjuvant pembrolizumab followed by surgery and then adjuvant therapy with pembrolizumab combined with either radiation or chemoradiation, improved event-free survival when compared to the standard of care control arm. This has been the first advance in this population in more than 20 years. The data demonstrates that improvement in event-free survival was seen in ITT as well as in the populations whose tumors express PD-L1. At the time of this interim analysis, which is the first interim analysis, a trend towards improvement in overall survival was observed for those whose tumors have a CPS score of greater than 10. These results did not reach statistical significance and will be evaluated at the next interim analysis. We also shared data from MK-1084, our oral KRAS G12C inhibitor, which we believe is an improvement on the previous generations of KRAS G12C inhibitors. This asset was designed to be highly potent, combinable, as Dean said. It's also given once a day. And therefore, we can combine it well with therapies such as KEYTRUDA as well as chemotherapy. At ASCO, we presented data from the Phase I KANDLELIT-001 study of MK-1084. One data set looking at non-small cell lung cancer, looking at it as monotherapy as well as in combination with pembrolizumab. And that combination showed that for people who have PD-L1 positive non-small cell lung cancer, the overall response rate is 77%. Now it's really rare and nice to see a waterfall where everything is sort of pointing in the downward, the right direction, showing benefit for patients. And that's something that's really exciting about this. In colorectal cancer, we also presented data looking at MK-1084 as monotherapy as well as combined with cetuximab. And then finally, the triplet of MK-1084, cetuximab and FOLFOX (sic) [ mFOLFOX6 ] also demonstrating very robust responses. Both of these showed manageable safety and tolerability and again, promising antitumor activity. So we have Phase III studies ongoing, both in non-small cell lung cancer as well as in colorectal cancer. In non-small cell lung cancer, we have a study looking at MK-1084 combined with KEYTRUDA for patients who have tumors that have a TPS score greater than 50%. We are also going to be initiating based upon the very promising results of MK-1084 combined with pembrolizumab shown in this study, a trial comparing the combination of MK-1084 with subcutaneous pembrolizumab compared to the KEYNOTE-189 regimen of chemotherapy combined with KEYTRUDA. So that's going to be something that's going to be potentially a chemotherapy-free IV-free regimen for patients with non-small cell lung cancer. We are also initiating -- we have initiated, excuse me, the KANDLELIT-012 study in colorectal cancer and first patient enrollment is imminent. So we're really excited about the whole suite of studies that we have, and we're looking forward to sharing more data in the future. Moving on to hematologic malignancies. We have a growing portfolio of agents that we think are very active across multiple different hematologic malignancies and are excited about our opportunity for patients who have these different diseases. At ASCO this year, we presented data from MK-2140, otherwise known as zilovertamab vedotin, which is a ROR1 ADC with the payload is microtubule inhibitor. We presented data last year at ASH with ZV, I'm going to call this MK-2140, in the frontline setting, combining ZV with R-CHP as frontline therapy for patients who have diffuse large B-cell lymphoma. At ASCO, we presented data from the second-line plus setting in diffuse large B-cell lymphoma, looking at the first part of a Phase II/III study of different dose levels of ZV combined with rituximab and gemcitabine oxaliplatin. It was not only dose finding, but also demonstrated that this is an active combination that potentially will help further unlock potential for ZV in diffuse large B-cell lymphoma. In this study, the combination of ZV with R-GemOx showed a response rate of the mid-50% range and historical control data shows that, that response rate is estimated at 35% to 40%. So we're excited about the combination data. We have a Phase III study that's ongoing in the first-line setting, looking at the combination of ZV with R-CHP that I referenced that was presented the data from ASH. This is waveLINE-010. And we also have a Phase II study that is looking at ZV versus polatuzumab vedotin in the GCB subtype in waveLINE-011. I'd like to touch on additional data from our ADC portfolio, looking at data that our partners at Kelun Biotech generated with sac-TMT for patients in China who have EGFR-mutated non-small cell lung cancer. We are very fortunate to advance sac-TMT in close coordination with Kelun Biotech. They've been a really remarkable partner to work with. The data that they've generated provides key insights and clinical signals in their studies that enables Merck to optimally design registration studies for sac-TMT in the United States and globally. This is a Phase II study called OptiTROP-Lung03 comparing sac-TMT versus standard of care chemotherapy in patients who have EGFR-mutated non-small cell lung cancer, showing a statistically significant and clinically meaningful improvement in progression-free survival as well as overall survival. The safety profile of sac-TMT is very manageable, and we believe that it is a differentiated ADC in the TROP2 space. This is the first TROP-2 ADC approved for lung cancer in China, and 2 global Phase III studies are ongoing in this specific EGFR-mutated non-small cell cancer population. Finally, with sac-TMT, data from studies being conducted in China have been presented by our partner in triple receptor-negative breast cancer. At this ASCO, the data is from a Phase II OptiTROP-Breast05, demonstrating in the first-line setting, very promising antitumor activity for patients who either received adjuvant therapy and had relapsed or had de novo newly diagnosed triple receptor-negative breast cancer. The response rate is very robust at 70% and consistent results were observed across PD-L1 expression level. The median duration of response is approximately 12 months, showing the promise of this asset in triple receptor negative breast cancer. As with the data that Kelun has generated in China in lung cancer, the data they've generated just help engage us initiating studies globally in triple receptor-negative breast cancer. The data continues to demonstrate a manageable safety profile. And the Phase III studies we have underway include TroFuse-011, which is in the first-line triple receptor negative breast cancer for patients whose tumors have low levels of PD-L1 expression. We have not only a monotherapy arm in the study compared to standard of care, but we are also looking at the ability of KEYTRUDA with sac-TMT to give benefit for patients whose tumors have lower PD-L1 expression as we've seen quite robust activity of the combination of KEYTRUDA with ADCs across a range of PD-L1 expression. We also have TroFuse-012 in the setting of residual disease for patients who do not have a pathologic complete response with the KEYNOTE-522 regimen. And very recently, we have started TroFuse-032. This is a neoadjuvant study of sac-TMT as a replacement for anthracycline-based therapy as part of the KEYNOTE-522 regimen in the neoadjuvant setting. We're very excited about our growing portfolio of sac-TMT. You heard about the number of studies that we have underway and the opportunity we have for patients globally, and we look forward again to sharing more results with you at future meetings. As you see, we continue to generate compelling data, which gives us increased confidence in our differentiated late-stage development program that you'll hear more about from Eliav. And I'm going to hand it over to Eliav now.

Thank you, Marjorie. And again, thanks to all of you for making it here at the end of ASCO. So as you've heard, we have a broad and deep pipeline, and it's divided into 3 groups. Our immuno-oncology medicines are designed to stimulate anticancer immune responses, and they include the subcutaneous pembrolizumab with berahyaluronidase alfa, INT and the bispecifics. Our precision targeted agents are designed to impact pathways that can drive cancer growth. You've seen the early data with MK-1084 that Marjorie just pointed to. We anticipate important readouts for belzutifan, opevesostat and nemtabrutinib over the next year or so. Finally, our ADCs and TCs are designed to target chemotherapy and immune cell activation to tumors while mitigating the effects of normal tissue. You've heard about sac-TMT and zilovertamab vedotin from Marjorie. And we're also excited about our other DXd assets. And I want to particularly point to our highly active rising star, again, from Kelun Biotech, MK-3120 and Nectin-4 ADC as well as our early pipeline. These are really exciting molecules. You'll hear more about them as the year progresses, but I did want to touch on 3120. Now we're deploying these assets with the goal of maximizing benefit risk and convenience to patients while providing exceptional value for payers. We anticipate developing novel, rationally selected combinations of highly active medicines that are targeted to specific patient populations. And what I'd like to do in my talk is just to give you examples of that, so it doesn't become -- isn't just so generic and you can't grab on to specific examples to give you an understanding of how we're deploying our pipeline. So we're also working hard on biomarker selection, and I'll talk a little bit more about that. Where feasible, we think that, that's going to be very important for patients to get the right medicine at the right time. Note that our team at Merck has developed a strong presence in biomarkers, starting with a PD-L1 biomarker, of course. And we have extensive work going on for all of our ADCs with immunohistochemistry, digital pathology, imaging markers, AI and so on. These are in fairly advanced stage, and we're looking forward to presenting those in due course as the other -- as our Phase III studies read out. Now our investment in treating early-stage cancers in new medicine like INT or now it's called intismeran autogene is based on our goal of effectively treating cancer in the curative intense setting before it metastasizes. KEYTRUDA continues to provide important data. And of course, KEYNOTE-689, which you just heard about, is one of those things. But also, I'd point you to a large cluster of 6 studies that are going to read out across the spectrum of bladder cancer, which is a really important part of our portfolio and again, make reference to MK-3120. We're also going to have some readouts of KEYNOTE-756 in HR-positive breast cancer. And I think that's going to be a really exciting study. Now to give you, again, as I mentioned, a little bit more flavor about how all of these molecules come together, I want to show you how the combination of industry-leading foundation of KEYTRUDA and a rich pipeline can enable us to provide unique opportunities to advance cancer care. So I show you 4 examples here. And we'll go through -- I'll give you a little quick highlight, and then we'll go through each one of these in detail. This is not the only thing that we have in the pipeline, but we thought it'd be an emblematic demonstration or a demonstration of what we're heading to. So we'll start with the first one. MK -- sorry, KEYTRUDA and KEYNOTE-671 have demonstrated that perioperative treatment with pembrolizumab improved outcomes in patients in 671's case with non-small cell lung cancer, but there's a whole series of studies, as Marjorie pointed out and Dean, where we've shown that perioperative therapy with KEYTRUDA can really improve outcomes and especially OS. The patients with detectable viable tumor at the time of surgery remain at high risk for recurrence. So as an example, the percentage of patients in KEYNOTE-671 who do not achieve pathologic complete response is 80%. So there's quite a bit of patients who still are at residual risk even after getting neoadjuvant therapy. Now adjuvant pembrolizumab helps them, but they're still at risk. And so we're keen on adding to the platforms that things like KEYNOTE-522 in triple-negative breast cancer or KEYNOTE-671 in non-small cell lung cancer using those platforms to improve outcomes for patients in particular populations that are at high risk. Now we just announced the results of KEYNOTE-B96 in ovarian cancer. This is the very first demonstration of the value of IO in the ovarian cancer space. And so KEYNOTE-B96 provides us with a pole position to create combinations with R-DXd, which is highly active in this setting. And then finally, as a last example within the -- the third example, I should say, KEYNOTE-189 set a very high standard for benefits in patients with newly diagnosed locally advanced metastatic non-small cell lung cancer. And as Marjorie notes, we can now define segments of the populations with the potential for even better outcomes using MK-1084, which has really quite exceptional duration of response and objective response rates. And then the last example is gocatamig and I-DXd. These are 2 agents that are being developed in partnership with Daiichi Sankyo. And these are orthogonal mechanisms of action and high activity in small cell lung cancer. And in all of these settings, in each one of these settings, we're very excited about the potential for MK-2010, which is our PD-1 VEGF bispecific to enhance the foundation that pembrolizumab gives us. So as promised, I'm going to take each of these 4 examples and give you a little bit more of a deep dive. So as you can see, these are suites of KEYTRUDA studies in the early-stage cancers. And you can see that each one of them has really made a difference in patients' outcomes when KEYTRUDA is used either in the context of neoadjuvant/adjuvant or adjuvant therapies. There are more than 30,000 patients and over 30 active Phase III trials in early disease across 10 tumor types. And this is really a large effort. Now with that foundation, we can use our suite of medicines to use this platform to advance care in selected patient segments. So again, you can look at KEYNOTE-671 as an example. We've mentioned already a couple of times the importance of 671 as improving overall survival in patients with Stage II, III non-small cell lung cancer. However, patients with detectable viable tumor at the time of surgery remain at high risk for recurrence. And in these patients, we're evaluating both INT, and you can see in that second-line intismeran autogene as well as sac-TMT. Now these are drugs with very different profiles, and we don't think that they're going to be overlapping. So these are distinct populations that will be -- where these drugs will be used. And so distinct offerings to really broaden our ability to help patients who don't get the optimal result in the neoadjuvant state. We've got similar approaches in other settings, and we already have studies planned to add settings where readouts with pembrolizumab in the perioperative setting are imminent. So stay tuned for that. I've talked a little bit already about KEYNOTE-B96, and this is really exciting for us because this is the first time where you can see that addition of pembrolizumab to standard of care chemotherapy resulted in potentially practice-changing OS benefits in certain patients with platinum-resistant refractory ovarian cancer. So now we at Daiichi Sankyo have shown the outstanding activity of raludotatug deruxtecan or R-DXd in later lines of therapy in ovarian cancer. And further exciting data are going to be released in the upcoming months. It's really a great drug. We'll now combine pembro and R-DXd with the potential to further improve outcomes in these cancers as well as in earlier lines of therapy within ovarian cancer. Now I'll remind you that bevacizumab plays an important role in the treatment of certain ovarian cancer settings. So with our unique insights from KEYNOTE-B96, we are confident that we can consider MK-2010 with R-DXd in the future. We've talked a lot about MK-1084, but I want to emphasize that KEYNOTE-189 set a very high standard for benefit of KEYTRUDA in combination with pemetrexed and platinum chemotherapy in certain patients with newly diagnosed non-small cell lung cancer. As Marjorie explained, we've shown that co-administration of MK-1084 with pembrolizumab is generally well tolerated and results in a very high rate of extremely durable responses up to 24 months in counting. The reason why it's just 24 months is because that's pretty much when we started the study. So it's a really quite remarkable drug. I'm particularly excited about the imminent start of KANDLELIT-007. This study is a Phase III study. We will compare MK-1084 plus subcutaneous pembrolizumab with berahyaluronidase alfa and the KEYNOTE-189 pembro chemo regimen in patients with newly diagnosed locally advanced or metastatic KRAS G12C-positive non-small cell lung cancer. So on the one side, we'll have subcu pembro and an oral tablet administered once a day. And on the other side, we'll have KEYNOTE-189. And you can imagine how that combination of a pill and a subcutaneous injection that can be given over 1 to 2 minutes is going to be really a revolution for patients if you can see that the efficacy is as we expect. So if the study is successful, we'll have an opportunity to really make a meaningful difference in patients' lives, not only improve outcomes for the patients, but also improve their experience as they go through something as bad as advanced metastatic non-small cell lung cancer. Now small cell lung cancer is our next frontier that we'll tackle and I've chosen small cell lung cancer because this is not an area where pembrolizumab has been in a foundational drug. In the U.S., there are about 34,000 patients per year that are diagnosed with small cell lung cancer, and that represents about 15% of all lung cancers. And you all know that the prognosis is quite dismal. Gocatamig, MK-6070 and I-DXd, we call that MK-2400 have orthogonal mechanisms of action and each has shown high activity in small cell. And you can see the 2 waterfall plots here that are really quite impressive. We've already are quite along the way in evaluating these 2 drugs together. And I think this is where we are really differentiating. Those -- the results of those studies will present in due course. But suffice it to say that we're thrilled by the results, and we're looking forward to being able to advance this combination. So these 4 examples are just the tip of the iceberg in our ambitious plans. We have one of the largest and broadest ADC portfolios in late development covering important cancers. I think our early pipeline will bring diversity in targets, bispecifics and new payloads as well as other opportunities to improve outcomes for patients and create unique combinations. And you can see all of the different ADCs here, some with our colleagues at Kelun Biotech and some with our colleagues at Daiichi Sankyo, which really a group that really has an enormous amount of benefit in advancing the field of ADCs. sac-TMT is our most advanced ADC. Kelun studies in China have provided us with confidence in this asset as well as important data to aid in the designs of our sac-TMT studies. Now we recognize that there are other TROP2-directed ADCs with different antibodies, linkers and payloads. But our foundation with KEYTRUDA and the strength of this particular asset and our execution teams has led us to a multifaceted and unique programs that displayed here. The publicly announced studies are shown here. As you can see, we're potentially first-in-class in most indications. We're testing unique combinations or we're evaluating biomarker-defined populations. Not shown here is the intensive biomarker development strategy that's bearing fruit and will be disclosed in the future. And of course, there will be other studies that we'll present it in due course. So how does this huge pipeline and our overarching strategy translate into Phase III registration trial? In this slide and the next, I'll show protocol completion dates for over 60 registrational trials across 16 mechanisms of action. Of course, each study has interim analyses, implying that in some cases, earlier readouts may occur. The pembrolizumab studies shown here will provide critical data to improve patient outcomes, but these can be imputed to subcutaneous pembrolizumab or MK-3475A with the potential to meaningfully lower the barriers to access for patients and providers. The studies will also enable combination strategies. And I'm excited about the WELIREG studies that are finally getting close to being ready for readouts as they have the great potential to advance therapy in RCC where there's significant unmet need. And then here's our new pipeline programs. And you can see in the bright green, the sac-TMT program, which is really a huge effort in our part. We also have studies of MK-1084. We have studies of opevesostat, our CYP11A1 lyase inhibitor for prostate cancer, bomedemstat, our LSD1 inhibitor for essential thrombocythemia and nemtabrutinib, our noncovalent BTK inhibitor. All of these studies are well underway, enthusiastically enrolled and will read out as noted in the PCD dates. Finally, we are advancing MK-2010 in China, where we have a highly efficient operational capability. This PD-1/VEGF bispecific has potential across many tumor types. And as you see from our presentations, we have unique assets and a highly experienced operations engine that, in aggregate, will enable rapid evaluation of MK-2010 alone or with other agents in a large number of patients. And our unique pipeline provides us with important insights as well as opportunities to develop this drug for patients across the spectrum of cancer. So in closing, I hope you have shown you that we've moved with urgency to execute a tremendous strategic pivot beyond KEYTRUDA to a more diversified multifaceted pipeline of innovative candidates, not just with signal generation Phase I studies, which is mostly what you saw with the exception of sac-TMT in this ASCO, but with a tremendous cascade of Phase III studies that over the next few years will read out, and I think will make a tremendous impact on cancer care going forward. And we really think that this pipeline will help us write the next chapter in the book of cancer therapeutics for Merck. And with that, I'll turn it over to Chirfi.

Thank you, Eliav, and a pleasure to be here. Thank you for coming at the end of this very long and exhausting ASCO. I'm proud to speak on behalf of our industry-leading oncology commercial organization, which continues to drive patient access and impact to our important medicines for the treatment of cancer. We have reached to date over 3.4 million patients around the world with our medicines, in part, thanks to our strong commercial execution. Our suite of oncology products is approved in a total of 56 indications in the U.S., 44 in the EU and 41 in Japan. Of those, KEYTRUDA is approved in unparalleled 41 indications in the U.S., 31 in the EU, helping us drive strong growth and IO leadership. Our success is underpinned by a talented team that has built a robust commercial engine globally. This includes, among others, our market access efforts where we have achieved positive HTA approvals around the world. We continue to execute with excellence across all tumor types and across all markets, and we're proud of the progress we're making. But we've got a lot more opportunities ahead. As you've heard from my colleagues, we're driving impact in earlier-stage disease. We continue to be excited about the opportunity for KEYTRUDA specifically. KEYTRUDA is the one and only IO to demonstrate a significant overall survival benefit in 4 studies and to have received 9 approvals across 6 tumor types. We await, as Dean indicated, we await FDA action on our application in resectable locally advanced head and neck cancer based on the compelling results of the KEYNOTE-689 study. This is the first positive trial in 20 years for patients with resectable locally advanced head and neck cancer. For context, in the U.S., there were 58,000 new cases of head and neck cancers diagnosed last year, and sadly 12,000 deaths from the disease, which speaks to the large unmet medical need in this space. Approximately 60% of these cases are diagnosed at the locally advanced stage and a portion of those would be addressable by KEYNOTE-689. We look forward to bringing this treatment option to appropriate patients. If approved, KEYNOTE-689 would mark the 10th earlier-stage approval for KEYTRUDA, unprecedented. Our commitment to innovation and addressing the unique needs of patients and health care providers and systems extends to the development of subcutaneous pembrolizumab in combination with berahyaluronidase alfa. We hope to bring this innovation to patients in the U.S. later this year. Subcutaneous pembro pairs well the clinical strength of KEYTRUDA with meaningful patient and customer benefits. These include the potential for the fastest injection time of approximately 1 minute for the Q3-week injection, 2 minutes for the Q6-week injection and the lowest volume injected. We're seeking all adult solid tumor indications where KEYTRUDA is currently approved. Subcu pembro could be particularly appealing for patients receiving monotherapy or oral combinations, especially those in earlier stages of disease, where time and setting of administration may be a concern for patients. We believe that the potential benefits of the subcu will extend beyond patients to health care systems as well. By optimizing health care resource utilization, particularly in settings where infusion capacity is limited, we believe we can help contribute to overall efficiency. In terms of adoption, we anticipate that peak uptake in the United States will reach between 30% and 40% within 18 to 24 months. We expect initial uptake to reflect potential delays in reimbursement by payers until a permanent J-code is assigned by CMS. Having said that, based on insights we have received, we continue to receive from customers and patients, we believe there is a keen interest in adoption -- in the adoption of this formulation. Outside of the United States, we also anticipate strong adoption of subcutaneous pembro with varying rates depending on specific country archetypes. As we look to the future, we're confident that our oncology commercial engine puts us in a strong position to maximize the impact of the broad and deep pipeline that my colleagues presented earlier. We have communicated a greater than $25 billion non-risk-adjusted commercial opportunity from our late-stage pipeline. Of note, this number does not include innovations with currently marketed products, subcu pembro, earlier-stage pipeline compounds such as the PD-1/VEGF bispecific or additional business development. This revenue opportunity will result in our company maintaining one of the most diverse footprints across tumors as well as driving into new areas such as small cell lung cancer, prostate cancer and hematologic malignancies. More than half of this commercial opportunity is driven by ADCs. We have a multitude of ADCs, as you saw in Eliav's presentation a moment ago. We have a multitude of ADC candidates that are really, really exciting. In the next slide, I'll give you an example of market opportunity, specifically focusing on sac-TMT, our TROP2 ADC. Now this slide depicts the 14 ongoing registrational studies evaluating sac-TMT in multiple tumor types and stages of disease. In the dark field boxes, you will see the 9 potential indications for which we would be first-in-class. 9 out of the 14, we would be first-in-class. And in the blue, we have the potential for meaningful differentiation. The dotted outline boxes reflect the progress we have made since last year's ASCO, significant progress. You can also see on this slide the estimated addressable patient opportunity for each of the indications. So in aggregate, we have significant opportunities to advance standard of care for patients across a range of tumor types. Beyond sac-TMT, we have an extensive ADC portfolio. So when considering those with our collaboration with Daiichi Sankyo, P-DXd, R-DXd and I-DXd as well as our internal candidate, ZV, each of these ADCs is well positioned with opportunities across various tumor types and the potential to be first-in-class, each one of them. More broadly, our company has the potential to launch 20 new growth drivers, and that includes WINREVAIR and CAPVAXIVE, which are still in the launch phase, in many countries over the next number of years. So 20 new launches over the next number of years. 13 out of those are in the oncology space. So in closing, we're committed to leveraging our innovative portfolio and our leading commercial engine to sustain our leadership position in oncology and create significant value for patients. And with that, I'll turn it back to Dean.

So thank you, Chirfi. What I hope to do is this effort today is to just give a framework in how we're seeking to diversify in oncology. We have more than 60 Phase III trials across 16 candidates. We didn't cover 60 Phase III trials or 16 candidates. But essentially, the broad impact of KEYTRUDA writes a road map for us to go in the future as we develop molecules spanning 3 pillars of biology: immuno-oncology, tissue targeting chemo with ADCs and next-gen precision targeting and across earlier and late-stage cancers. And hopefully, today's presentation gives some context of our strategy and how we prosecute clinical trials. And I can promise you, you will see more trials posted by the end of the year. We're in an advantaged position to improve patient outcomes, and we look forward to further improving efficacy, treating patients optimally and treating them earlier. And with that, I'll turn it over to Peter for Q&A.

Thank you, Dean. We look forward to taking your questions. So you're all aware, Joanne Monahan, who leads our U.S. Oncology Commercial business is with us and can answer questions pertaining to her areas of expertise. We'll start here in the room. But before we do so, Denise, on the line, will you please provide instructions for those who are on the webcast to enter the queue for questions.

[Operator Instructions]

Denise, we're going to hold off on the questions. I just want to make sure they are aware of how to enter the queue. We're going to start here in the room. Domini and Steve from the IR team are here with microphones. So please wait for them to get to you with the mic and state your name and firm name before asking your questions. So we'll start with questions, Vamil.

Vamil Divan from Guggenheim. So maybe a couple of questions, if you could. One on 2010. There's obviously a lot of focus on the sort of market evolution with PD-1, PD-L1/VEGF bispecifics. So maybe if you can just comment -- we saw some news from Summit a couple of days ago. Just your perspective on how the markets are evolving. And you mentioned the ongoing trial -- Phase I/II trial in China. I'm just curious what your latest thoughts are on when you'd be starting sort of development work in the U.S.? And then my second question was just on 689. And you mentioned sort of the number of patients that are diagnosed with head and neck cancer every year. Some of the KOLs we've spoken to just have mentioned that just locally advanced disease may not want to wait for surgery. I'm just if you could maybe sort of quantify a little more just your thought on the market opportunity there going down further from that 60% are diagnosed early, what percentage do you think would be interested in?

So why don't we have Marjorie just talk a little bit about the PD-1/VEGF space in relationship to the molecules and some of the data on ours and then Eliav can give a broader sort of view as to how we think about advancing MK-2010 and also what we believe is our advantaged position.

Thanks for the question. I think that we all are watching the emerging data with interest. And I think that we see this as an opportunity. We've got a robust portfolio and the ability to combine and make additional benefit for patients is really attractive to us. When you look at the totality of data that's been generated to date, you're seeing very consistent improvements of PFS either in the randomized data sets or in the single arm compared to historical control across a multitude of indications, confirming that the biology about how VEGF and PD-1, an anti-VEGF combined with an anti-PD-1 can really be effective in the immune system. The question has been the one -- the lingering one is about the overall survival. And so I think that there were actually analyst reports that had predicted the original sort of OS in the 0.7 to 0.8 range, and that's where it's hitting. So these are still clinically meaningful overall survival. What's -- the open question is what do the curves look like? And so right now, we are still very intrigued by the data that's been generated to date because you're seeing, again, consistency of data with multiple assets and meaningful improvements in progression-free survival. It's still immature. And so we are continuing to progress our portfolio and looking at MK-2010.

Yes, I agree with Marjorie. I mean I think one of the points to make is that a lot of the data has been in EGFR mutant non-small cell lung cancer, where the PD-1 component of the bispecific hasn't been particularly as effective as one would see in non-small cell lung cancer without EGFR mutations. So one has to keep that in mind. We're encouraged by the fact that Summit seems to have added non-Chinese patients and the effect size seems to be relatively similar. We're just waiting for -- to make sure that the OS benefits translate and that there's a more robust delineation of the data. That notwithstanding, we have tremendous opportunities with a drug like this. And the reason why we're doing the studies in China because simply we've got an enormous infrastructure there that enables us to work together along with our wonderful partners at Kelun Biotech who can help us move things along faster in terms of combination strategies with some of their assets. Ultimately, we will come to the U.S. We have to do dose optimization and so on. But suffice it to say, we're anticipating when the time comes, having a rather large program similar to what we've seen -- we've seen with some of our other assets that I just mentioned.

I think there was -- So the head and neck, I was going to ask Marjorie to make a comment and then actually have Jo speak in terms of the U.S. market in relationship to KEYNOTE-689.

So I think when you look at the 689 data, the control arm of people who went straight to surgery, there is no difference in the rates of surgery between treatment arms. And so patients did not lose the opportunity to have surgery when they received preoperative KEYTRUDA. And I think that if you think back to triple receptor-negative breast cancer, that people did not routinely give neoadjuvant therapy until there was a labeled indication. And so I think that getting that data out there showing again that it was safe, that there wasn't a risk of patients not being able to undergo surgery. The amount of chemo radiation given in the KEYTRUDA arm is actually less. The patients still receive radiation, but the overall benefit is observed by that perioperative approach. And so I think it is something that as clinicians and particularly the surgeons see the data and understand it that it will hopefully alleviate their concerns.

Jo?

Yes. And I can just add something. I think what's unique about the head and neck perioperative indication is that it's 2 doses upfront. It's not like lung cancer where it's more doses. So you can give a dose and then 3 weeks later, another dose. And usually, there's a 3-plus week delay for scheduling surgery anyway. So I'm not sure it's going to meaningfully delay. I'm not sure everyone knows that it's a different regimen than what we see in other early cancers.

Thanks, Vamil. Next question, Steve Scala.

Steve Scala from TD Cowen. Despite a history of leading in maybe 5 or 6 different therapeutic categories over the last 35 years, Merck seems much more dug in and less willing to pivot this time, of course, away from oncology into something else. I realize there's a lot of sufferers cancer, but there are other diseases as well. Would you agree with that? Or is that incorrect and you are perfectly willing to move on even quickly to a completely different therapeutic category? So that's question number one. Question number two is, what are Merck's plans to push back on CMS' view that subcu versions of injectable drugs should be treated the same under IRA? And would you like us to be optimistic on your ability to prevail or you have no ability to call that?

So I'll take the first question, and then I'll think who best to talk about the second question. We talked about diversifying in oncology, and we've provided how fast we've moved. But I would sit there and say, when I talk about expanding into other therapeutic areas, the immediate reaction is you're going to expand in vaccines, and you've seen that. We're going to expand in infectious disease and HIV. And so we're moving a new class of NRTTI as an anchor medicine for Q-day 2-drug regimen and then to Q week and then potentially to Q month. So that's within our wheelhouse of HIV. But I'm not -- and then I would sit there, cardiovascular metabolic, we have a history of it. So I'm sure there will be news about enlicitide in the coming year -- in this coming year, coming weeks, coming months and WINREVAIR. But I don't know that people suggest -- thought that we would move heavily into therapeutic areas that we had not been historically or recently in, and that's in immunology, which we're moving with enormous speed in relationship to TL1A and other agents. And I think it caught many people surprise that we would drive into ophthalmology with totally new novel mechanisms. So I can respond to the comments, but I think the most important thing for Merck and for research labs to execute and demonstrate not just that we can say that we pivot, not just say that we're doing the studies, but that we bring it home. So that's what we want to focus on. In relationship to the CMS, I do think that the FDA has a very clear structure of 2 active agents. And I think a broader concept of going away from that, not just in relationship to berahyaluronidase or any hyaluronidase, but just as that structure, that FDA structure is really important. And I don't believe that this would be a good precedent to set. In the specific case of berahyaluronidase and pembrolizumab, we look at it as we don't think this is a good precedent to make, but we also recognize that people have questions about the hyaluronidase, pembro and our pembro launch. Everything we have with the FDA is that, that launch is going on, and we have committed to making sure that, that pembrolizumab subcu, we think is so important, not just for the past approvals we have, but as a baseline, as Eliav has said, how much we're building on that foundation that we really want that to be available. And so we're really looking for access as an important standpoint. And we do recognize in the U.S., it is going to have biosimilar competition in '28 and '29. And our concept of advancing subcu pembrolizumab is berahyaluronidase takes that into account. But most importantly, it takes into account of how important we think it's a foundation for what else we're building as well.

Chirfi or Joanne, anything to add on...

Well said.

Okay. Great. Evan?

Evan Seigerman from BMO Capital Markets. Can you walk me through some of the evidence that you have to support the statement that you believe 30% to 40% peak adoption 18 to 24 months post the launch of subcu KEYTRUDA, how do you get there? There's a lot of questions with the launch and approval of the Opdivo version. And are you going to -- what headwinds may you not be anticipating?

So I'll give a broader kind of a high-level answer and then maybe Jo can chime in more specifically for the U.S. She is in charge of the prelaunch preparation she's working on exactly that. So we -- first of all, we have market research and deep insights from customers and patients suggesting that this adoption will happen. Now I do want to caution, as I mentioned in my prepared comments, that we do anticipate some slower uptake initially until we get the permanent J-code issued by CMS. That's kind of the caution there. But we do have confidence based on the insights and the differentiated profile. I mean you're marrying really the reference now in IO treatment with the convenience of 1 minute to 2-minute push really will be very beneficial. So maybe, Jo, you can provide more insights.

Yes. Thank you for the question. We have done a number of quantitative adoption studies across the market, looking and asking about adoption, sharing the profile and understanding where they're going to use, where providers will use subcu, and all of them have validated the 30% to 40%. One of them was slightly higher than that, but we've landed on the 30% to 40% as sort of the average across all the studies that we've done. I think we expect to see greater uptake in monotherapy indications, early-stage indications and oral combo and lower uptake in the metastatic chemo combo where they're hanging a bag already and they already have a port. And so it's not that much time saving to hang 2 back. So -- but when you blend it all together, it's a 30%, 40%. And as Chirfi mentioned, it will be slow in the first 6 months because when you -- normally, providers will take a chance with a temporary J-code if it's a product that doesn't have good alternatives. But when they have KEYTRUDA IV that is a good alternative that has very reliable reimbursement, they're not as willing to take the chance to make the transition until the permanent J-code is in place, which essentially guarantees them they're going to get reimbursement within 30 days. So we expect the first 6 months to be slow, and then we expect acceleration following that. There's also some operational things that practices need to do to sort of work it into the EHR and all those things, which we expect to happen over the course of the first 6 months. So by 6 months, we would expect the adoption to accelerate to the 30% to 40% at peak, which will be about 18 to 24 months...

Quick follow-up there. Are these oncology centers ready for the potential impact to kind of their economic model with chairs and buy and bill and that whole kind of infrastructure that they've set up? And are you going to help walk them through that change?

Yes. So we are -- when we consider the price of subcu, we're considering not only the price of IV, but also the admin fees and other things that they get for IV relative to subcu. We also have targeted accounts based upon who has infusion chair time challenges, where those are going to be our early adopter accounts. So we've mapped the market based upon where there are infusion challenges. Those are going to be the places that will adopt first is our expectation.

Great. Chris Schott...

Just 2 for me. First, can you just elaborate on the differentiation you see with your TROP2 versus peers? Maybe extent how you're thinking about approaching some other assets and more competitive categories. Is this more about the molecule or the asset itself? Or is it Merck can take a different development approach and can leverage its portfolio to differentiate the clinical data available? I'm just trying to get a sense of like is it Merck can take a less differentiated asset and turn it to something different? Or is the molecule really critical part of that? And the second one, I just wanted to follow up on the subcu KEYTRUDA comment. I know you disagree the idea of moving away from the kind of dual agent and if this were included in negotiations. But just given the availability of a biosimilar, does it really change the outlook? Or was the biosimilar going to be kind of the key component of how you think about the longer-term price for subcu?

Pricing strategy, you mean. Pricing-wise.

Yes. So why don't we take the pricing-wise first and fee and however you want to handle that? And then we'll take the other question.

So I think we've said it already. I just want to repeat it so that we're clear. We will price to access. We will price to value and market share. We're going to be competitive looking at all those 3 dimensions. That's all we can say about it at this point.

Then in relationship to TROP2, is it the molecule? Is it the clinical development team? I won't say both, but I'll let Marjorie and Eliav say both.

I was thinking that I was right. I just wrote down differentiation schedule, toxicity and development plan were the notes that I put down. And I think that Kelun has generated a really remarkable ADC. I described it publicly before as Goldilocks and the 3 bears, this is just right because there are day 1, day 8 schedules, there is Q3-week schedule. This is a Q2 schedule. And so it's a little bit more frequent than the Q3 schedule, but you also have this efficacy, tolerability, that therapeutic index is really critical for patients. And so I think it is just right in what you see with the manageable side effects that have been reported to date. And so the Phase III data sets will hopefully help confirm that. And I do think that we do have a differentiated development plan and taking advantage of the efficacy as well as the publicly disclosed tolerability aspects of the drug. We are doing maintenance approaches. We're not adding platinum chemotherapy on top of it, which is very difficult to do when you get dose modifications and reductions, which can affect your efficacy. And so we really have developed a plan that is very robust. So I think it is both.

Right. I think that it's the plan and it's the molecule. First of all, the dose that we chose, I think, is going to be very useful for a workhorse ADC, an ADC that's going to be developed in multiple settings, in multiple stages of disease and where a lot of the therapy is going to be in maintenance. It's going to be important to look as you all see our data and as you compare how limited it is to do cross-study comparisons. But if you -- when you do to look at duration of therapy, time on treatment and how important that is in helping patients get to the right outcome. And of course, that also has some commercial implications as well. But I think that the overall picture is a Workhorse ADC that is just right and in new indications with biomarker and/or combination selections that I think will be differentiating. So of course, the proof is in the pudding of the Phase III program, but we really believe in this, and there's a good reason why we put quite a bit of muscle behind this. And we're really excited to be able to share all those data as they roll out, and they'll be rolling out in spades starting in -- as you look at the PCD dates, 2027 [ and onwards ].

So I was going to just add, it's molecule, it's development, and we said both, but I would just emphasize as a third issue. We have a great partner. What was publicly revealed as to when we partner with Kelun Biotech, we had partnered with them for some period of time. And their ability to give us clear signals and great interactions allows them to navigate within China in a way that's extremely useful for Merck as the global presence to really learn.

Thank you, Chris. Next question, Courtney.

Courtney Breen from Bernstein. A couple of questions. One is just a clarification. When it comes to MFN, I know everyone is dealing with the potential kind of probably developing 10 or 50 scenarios to think about what that might look like. Can you talk a little bit about kind of either changes to global launch strategy or kind of flexibility that you're building into development plans as to kind of how you're dealing with that future uncertainty? And then the second was just on MK-6837 that I noticed on the ADC slide. Is that a Merck internally developed asset? Or can you give us any more context on that one?

[ MK-6837 ] and that's internally developed.

Through capabilities that you've gained from one of your partners? Or can you talk a little bit about?

It's our own...

And what's not listed here is there's -- and Eliav alluded to the direction that we're going and also that we have an equally robust internal pipeline that will go into Phase I and then it will visible, but that's the tip of the iceberg. In relationship with MFN, I've been in meetings with you and with Rob and with Caroline. And the way that I would just sort of emphasize is the U.S. is the heartbeat of medical innovation. This is the market that drives market innovation. There is a concern by this administration as to whether that concept is recognized by all countries and all biopharma. One thing I can say is as a U.S.-based company, we will always launch in our home country, which is the base of the whole industry where that base of that whole industry actually values innovation. I don't want to say what we will do in the future or this, but we have that concept that we will always launch in the U.S., and we're going to have to be thoughtful as to how we launch in other countries and all of this, especially as these policies become not just things that is said, but become sort of ironed out and actually put into practice. So we watch the MFN space. I think Rob has talked about how MFN is really an important thing for us to keep track of, and we're keeping track of it.

Next question. Trung?

Trung Huynh from UBS. One on U1 and one on radiotherapy. So it looks like MK-2010 is the tetravalent into your slides there, similar to ivonescimab. It looks like the main difference to me is the nanobody part where it binds to PD-1s. Just wondering how you think that structure affects how effectively it works in the tumor microenvironment. Does having a nanobody here just reduce the all steric hindrance that you get, bringing immune cells and tumor cells together? Some thoughts about that. And then the pipeline has a lot of breadth with ADCs, you have bispecifics, one area that you're noticeably less versus your peers is radiotherapy. So just...

So this is [indiscernible] question. Finally, someone gives me a question. So one of the things I would just emphasize is I think what is interesting to us is what Marjorie and Eliav alluded to. Initially, if you look at the different constructs, you can think of cooperativity and tissue targeting and all of this. And you would sit there and you go, Akeso compound and our compound, you could get that feeling that if there's cooperative, if there's some tissue targeting sort of aspect that we would act similarly. The only problem with me answering that question is everything is fun and games until you put it in the human. And what you recognize is you wouldn't necessarily in the hypothesis that you have VEGF, immediately when you go to a PD-L1/VEGF, you're like, well, okay, that hypothesis is no longer true. And if you look at BioNTech's data, which is related to someone making an action right now, we'll have to see whether it's distinguished or it's the same. And then other people have looked at molecules where the binding to the PD-1 and the VEGF is like right on top of each other. And so I'd love to tell you what I thought, whether the nanobody was important or the construct was important in this. I believe in the general construct of what would you would say Akeso and us. But the only way that I could say with certainty that I was right is if the data starts separating clinically to the different readouts for those different types of constructs. So we're confident in our construct. We're actually a little bit surprised at the clinical results from some of the other constructs.

Radioligand?

Oh, the radioligand therapy, I think we follow the radioligand therapy very closely. There is some really important movement in prostate. We note that some companies are, for example, looking at ADCs and essentially using the same tissue targeting sort of thing and putting a radioligand. Our view is that an antibody drug conjugate in the right setting and in the right combination, if it can have meaningful impact and meaningful impact first, it may be hard for radioligand therapy to displace that given the complexity with it. But there are clearly places with radioligands where ADCs may not work. And so we'll have to figure that out as we develop our pipeline and other people. And then we'll have to see where our unique places that radioligand therapy can attack. But you're right. Right now, we're focused on tissue targeting with T cell engagers and with ADCs.

Next question, Mohit.

Mohit Bansal from Wells Fargo. One follow-up question, a clarification question, another question here. So Chirfi, we have heard that for Opdivo subcu, it is still in infusion centers, not as in clinics. So what could you do to make it happen in clinics? Because that's an issue for a lot of -- for the uptake. The other one for Dean. I know it is a little bit early and you have that column blank in terms of 2010 development. Most of the early players are all going after lung cancer, which is where KEYTRUDA is the strongest. So how do you think about the development plan? I mean go after the most difficult indication for a new player or go after somewhere where PD-1 has activity, but it is easier to actually surpass that.

So why don't I give Chirfi that? And then I'm going to actually see if Marjorie and Eliav want to talk about...

Yes, I'll pass on to Jo in a moment. But just as a general, I just want to remind everyone that we believe, based on insights once again that physicians will choose brand. So I just want to provide that context because we don't really look at Opdivo as necessarily a benchmark for pembro subcu. So just to put that out for context. Maybe, Jo, you can address the other question.

All the research we've done providers say they're going to pick based upon the clinical profile first and then go for the convenience second. I think what you might be seeing is that, as I mentioned, in those first 6 months, there's a couple of things that have to happen, right? One is the reimbursement picture needs to solidify with the permanent J-code. Second is the operational factors. So they have a very clear workflow of how they deal with immunotherapy today with IO and infusion chairs. They have to think through now how am I going to do subcu. And so there's operational decisions they're going to have to make for how they work it into their workflow. So you might be seeing -- I can't speak to Opdivo's utilization, but I will say you might be seeing it in infusion centers because they haven't figured that out yet. But over time, as they work it through, they put it in their EHR, they figure out where they're going to give it, then I think you'll start to see it broaden beyond infusion. That's my guess. But that might be what's going on. But we do know that, that is something they've told us that we've got to figure out how we fit it in.

So I'll just give a broad statement, and I'll let Marjorie and Eliav sort of give you more meat. But essentially, as we're moving very fast with MK-2010, there will be inflection points that we have to make as to how broad the program you want to go and where do you go first. And we will go to the KEYTRUDA playbook, look at what we've done. We will look at the LEAP playbook. When people talk about PD-1 and VEGF and what the past history is, oftentimes, they're talking about that playbook. And then we will also look at the playbook of every one of the compounds that you've seen right here and ask, did we alter that playbook. But with that, I'll bring it to Marjorie and Eliav to give you more detail.

Yes. I think I agree with Dean is that you want granularity, but I think that we're not quite ready to tell you our secret sauce yet. But part of what we're doing is we do have an extensive database with KEYTRUDA and have learned a great deal about what we can do. But what I really love about this from a development standpoint is the ability to combine with all of our internal assets that are things that we have. And we already are -- have robust programs with multiple assets that we anticipate will be changing standard of care. And therefore, we are going to be very well positioned. And most of these are where KEYTRUDA already exists, and we have KEYTRUDA combinations. So then being able to build on this. So as Eliav talked about, for example, with R-DXd, we now have the B96 data in ovarian cancer, you can imagine and bevacizumab is used in ovarian cancer, the potential then with R-DXd to do something really innovative.

Yes, I think that's right. If you look at the -- one of the things I would suggest that you look at is all of the waterfall plot of studies or the sequence of studies and ask yourself, are these just sac-TMT studies or 1084 studies? Or are these studies that serve as the intermediate step in the final place where we're going. So I would encourage you to look as the pipeline progresses to understand that it's not about just saying everything that pembro was there and this was just put 2010. That would be okay, what would be that we're putting together. And I'll leave it at that.

Daina?

Two questions from me, hopefully, one fast one longer. So you talked about using digital pathology in AI and that we're going to learn more soon. Should we expect you're already employing that prospectively in any of your Phase III ADC trials? And then my second question is actually about ZV and lymphoma. So we recently heard from FDA in their ODAC for STARGLO, hypothesis that R-GemOx is not an appropriate preferred SOC comparator arm for U.S. studies. And I wonder what you think about that and how that could impact your development of ZV for lymphoma.

So who wants to take digital?

I'll be very quick on digital path and tell you that we really don't want to share at present what we're doing because -- well, we'd rather share the information first in an academic setting.

Yes. And then for ZV, I think the 2 studies I talked about are really first-line studies. And I think what we really see is the biggest benefit is going there.

Great. Next question, Akash.

Okay. So just a few. Medicare Part D, B and D draft guidance, there were 2 changes, right? One, it made it seem like subcu and IV were considered the same drug. But I feel like the other part was you had meaningful changes to the term bona fide marketing, where they basically said, if you can have a biosimilar launch, even if it takes de minimis share, as long as there were no agreements to prevent uptake, you were considered bonafide marketing and then you have the biosimilar exclusion applied. In the past, Merck has talked about both IRA negotiation and biosimilar entry in 2028. Can you maintain that position given the new draft guidance? And then number two, you have 14 TROP-2 studies that are written out here, and this is like a question I asked BioNTech. You have like, to your point, version 1.0 and then 2.0 trials where it's novel, novel combos. Are you alluding that you can take PD-1/VEGF combinations and apply them to the current Phase III TROP-2 studies you've already announced? And why not delay some of those studies because you really want 2 novel agents? Why spend the money for 14 Phase IIIs when that might not be where you're ultimately headed?

I'll try the last one and who want the first one. Okay. So I'll take the -- rephrase the first one..

Okay. Let's put it this, maybe importantly, what would stop Merck from settling with one biosimilar in 2028? You have IP out to 2032 or beyond. You are now excluded from the IRA and subcu KEYTRUDA is no longer negotiated. This is very similar to what Eylea and high-dose Eylea is right now.

Yes. So I can address that one. So we actually did the math on that, and it was giving up near-term value pre-LOE that did not justify uncertain value post-LOE. I think that's the bottom line. We actually did evaluate that and the financials did not make sense. I'm sorry? Yes, yes.

Yes. In relationship to -- we are going to have TROP2, but we're going to have a lot of ADCs and a lot of agents coming through. So I just want to put that context. And we intend to develop them appropriately if they're a signal. So the question that you're having is this first tranche that you see, should we delay that as we're -- as the field is trying to figure out PD-1/VEGF? Should we do that now? We also have the potential optionality also just move right now where we are because it isn't like we have a dearth of other opportunities to do that. And I think there's going to be a whole series of things that will come together. We're advancing 1084, we're advancing lots of different agents, but one of the things that I would be a little bit careful about is to sort of the enemy of the good can be the perfect. And I would be careful about that when we have such a great partner in Kelun who's given us such clear signals to go now. For me to sit there and delay for PD-1, is it this, is it that? Is it this and this? So we will have that problem, but it may be further down the pipeline. And at that moment, we will have to make a decision of shift, as you've said.

Right. I think it's important to recognize that these studies are going to not only read out important information about sac-TMT, but also help us with some of the biomarker strategies that we've already launched. There's also -- it's important to recognize that PD-1/VEGF is not for free from an AE point of VEGF-related AEs are just a fact. And so it's important to understand these drugs in a little bit more detail before one would say, well, I'm going to just hold on and not do that. Not to mention the fact that the delta of time is sufficient that it doesn't make sense from the patient outcomes point of view or the commercial point of view.

I think we still have hands in the room, Jon.

Jon Miller from Evercore ISI. Two probably quick ones from me. Marjorie, you said today, and we've heard the team talk before about the VEGF bispecific hazard ratio of 0.7 to 0.8 for OS being really from a development perspective. But what if it's more like 0.82 to 0.85, like the LAG-3 in melanoma, is that a compelling enough signal to justify a real aggressive push into that market? And then secondly, maybe potentially broader than just oncology. What's your current interest in acquiring assets ahead of a Phase III readout like you did with [indiscernible]?

Why don't you take that?

The first one, and then, of course, I always appreciate Eliav's thoughts, too. Hazard ratios in the 0.8 to 0.85 get a little bit more in the gray zone, and some of it has to do with the delta that you generate. So if you've got a frontline regimen where you've got a PFS that is 12 to 15 months and a 0.8, 0.85 still can be very meaningful. Also, if you're in a disease indication where you have multiple subsequent therapies and OS is harder to differentiate or you're able to treat in the second-line setting, then the 0.8 to 0.85 might still be reasonable. So I'm giving you a nonanswer because it depends. It really does.

In terms of appetite, I really like deals where there's a history of us understanding what we expect and then we see data ahead of the Phase III that makes us go wow. Our negative opinion of this needs to change pretty quickly. That's Acceleron. That's Prometheus. That's iBio. So we really like that because it creates value and a differentiated position for us. So we -- what you've outlined is what I really like.

Denise, are there any questions on the webcast?

I do have a question from James Shin with Deutsche Bank.

I got a few for Dean. I want to circle back on comments on being surprised by some of the PD-1/VEGF data. Can you elaborate what surprised you? Then given 2010's data is relatively lagged from these existing PD-1/VEGF players, does 2010 have to demonstrate a superior efficacy safety profile to make up for the time gap? Finally, is Merck's biz dev strategy to focus on differentiated science and first-in-class assets? Or is there now some appetite for a known target or derisked target? That's it.

I may have had trouble hearing the third part of your question, James. Can you repeat it?

Yes. The third question is for biz dev. Is the focus still on differentiated science and first-in-class assets? Or is there now some appetite for known targets or derisked assets?

I would say, I mean, our business development strategy has not changed. So...

So I should just be a little bit careful because the people in the room can see my hand just stipulations and you can't. So when I look at PD-1/VEGF, I'm binding PD-1 and I'm binding VEGF, and there's a considerable distance there, right? And PD-1 is a receptor. Then all of a sudden, PD-L1 is on a different cell, and that's different, right? That's different. And then you guys got some people who are not PD-1/VEGF like this with 2 hands being your PD-1 and my legs being VEGF, you have PD-1 VEGF right here and a PD-1/VEGF right here. If you would ask, if you were designing knowing certain hypothesis, you wouldn't necessarily design -- if you thought cooperativity or tissue targeting or something like that would be important, a priority you wouldn't necessarily design such different molecules. But what I was trying to say is it's easy for me to say how smart I am. But the problem is that these clinical data are coming a little bit close to one another. And so I need to be a little bit careful that whatever there could be original question was what do I think of the different designs. I have my preference. I made my preference, but I need to be a little bit thoughtful of saying, I'm right because some of these other constructs actually gave me the surprising results that I would not expect to work.

Anything further on the BD strategy, whether it's changed or evolved in any ways?

We are very interested in advancing business development in therapeutic areas that we're well known for and related to your question. We're very interested in going to business development. I think surprised people where you don't see us having a strong presence in the last 10 years, and we're willing to go there. For us, the critical thing is does the pathway, does the technology, does the clinical design of how you would do this demonstrate unambiguous promotable advantage that we can meaningfully move the market. And as I alluded, especially move the market in the market that really, really values innovation, and that's the United States.

Right. So we are over time. These have been really good questions. Are there any final 1 or 2 questions in the room, Mary Kate?

Mary Kate on for Geoff, Citi. Just a quick one on MK-2010. So trial ongoing in China. Maybe how are discussions going with regulators here? Could you comment on their expectations for the program? And maybe just broader, how has communication been in general with FDA CMS?

I'll take the general question, which is we're a company that we tell you we've pivoted our pipeline, and we have a lot of launches. We've given numbers in relationship to that. So holding on to those PDUFA dates are especially important to us as we pivot. We have important ones in relation with [ clesrovimab ], we have important ones in relationship to potentially WINREVAIR and labeling changes with the incredible data that we have with ZENITH. We have that with subcu pembro and all of our interactions with the FDA for those most immediate ones have been constructive. In relationship to PD-1/VEGF in relationship to regulatory interactions, I think we've kept that a little bit quiet, but I'll just ask Eliav if he had any questions that he wanted to...

No. I mean I think we're -- the development strategy for 2010 is something that we will roll out, and we'll provide updates when we think it's the right time. Again, we're excited about this drug. We understand the value of the drug very well. We're also mindful about where we need to be careful with VEGF.

Great. Thank you all very much for coming to our event. I'm sorry, we run a little bit long, but they were really good questions, and hopefully, you found them very informative answers. Dean, any closing remarks you'd like to make?

Yes. I just wanted to thank everyone, and I really appreciate your interest. I hope you gave -- got a little bit of sense of what Rob, Caroline, myself and this leadership team has done since 2021, which is to diversify oncology and expand in other therapeutic areas. And we've just talked about a fraction of that oncology framework for you, and I thought that hopefully will be important. Right now, I think we have around 80 Phase III trials that's publicly known. I think 60 of them were in oncology. And so we gave you a framework for it. We didn't go through all of them. 20 is within non-oncology. I have here that we have 25 distinct assets in those and 16 in oncology, 10 in non-oncology. So we are very interested in moving the pipeline. But as we emphasize, in oncology, we've learned a lot from oncology in relationship to KEYTRUDA, what it can teach us to do better and what it teaches us to do next. And so we have -- I believe Rob has talked about 20 new growth drivers over the next coming years, including WINREVAIR, CAPVAXIVE. I hope you got a sense from that slide, and those are official PCD dates. As Eliav said, there's always possibility for interim analysis. This gives you a context of those comments that Rob and Caroline have made in relationship to using oncology and the Phase III trials as an exemplar of the type of framework as we move on to continue to do great work at Merck to move the needle and bringing important medicines to patients. Thank you very much for your interest, and there's food back there.