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

Good afternoon, everybody. I'm Chris Schott at JPMorgan, and it's my pleasure to be introducing Merck today. From the company, we have CEO, Rob Davis; as well as Dean Li, President of Merck Research Labs. So Rob and Dean, obviously, a lot to go through. Happy New Year. I'm looking forward to the presentation.

Great. Thank you. Thank you. Appreciate it. All right. Good afternoon, everybody. I appreciate you spending some time with us this afternoon. Before I get started, just real quickly, I'd remind you that we do have forward-looking statements being made, and I'd point you to our language on our website, if you'd like more information about that. If you look at where we are as Merck, I'm pleased to say we are in a moment where we're really starting to see our transformation underway. We've been executing on our strategy, and I can tell you, we're in a position now where I think we are well positioned for success, whether it's advancing our diverse and expansive late-stage pipeline. We now have 80 Phase III studies underway. We'll talk a little bit about some of those in a moment. We're commercially succeeding in launching the first wave of the next 20 growth drivers we have of the company. And we're augmenting that through business development. The success and progress we've had to date now puts us in a position where we see visibility to more than $70 billion of commercial opportunity as we look out to the mid-2030s. And importantly, over the next 2 years, we're going to meaningfully, from a clinical perspective, derisk that opportunity, which we'll talk about. So as we sit here today, my confidence is high. It continues to grow. And we're really in a position to be set up for the next wave of success as we look at Merck going forward. But before we look to longer term, maybe just take a moment and focus on 2025, where we have had many accomplishments. And I'll look both from a clinical and regulatory perspective, but maybe starting first with significant approvals. Obviously, we're excited that in the third quarter, we got approval of QLEX, which is our subcutaneous form of KEYTRUDA, an administration under the skin that we can do in as little as 1 minute. Very important innovation for patients. And ENFLONSIA, which is our infant RSV vaccine. It's the only vaccine that you can basically administer regardless of weight in a single dose. Something we're very excited about. In our Animal Health business, where we don't talk as much, we're actually also seeing a wave of new product introductions, one of which we're very excited about, NUMELVI, which we just recently had approved in Europe, and we will get approval early in 2026 in the United States for a next-generation JAK inhibitor for atopic dermatitis for animals. This is a huge market in the animal health space and one we are very excited about what the next generation product we're bringing and one that we will continue to focus on as we move forward. We also are delivering key positive data readouts. I'd focus you on enlicitide. During 2025, we read out 3 clinical studies for enlicitide. This is our oral PCSK9, a drug we're very excited about. Given the fact that this is an oral pill, simple to take, we're going to make it simple to access at affordable prices. We really have the opportunity to democratize care for patients dealing with the need to lower LDL-C, and it's something that we're very focused on as an opportunity not only in the United States but globally. In the infectious disease space, we have important data readouts in both HIV PrEP as well as in multiple readouts in treatment with islatravir, which is really becoming, we believe, the next anchor medicine in HIV. And I'm happy to say we're actually going to have, this April, hopefully, the first approval with islatravir doravirine in our once-daily treatment coming in April. So that will be the first of many to come. We also are seeing important late-phase clinical trial initiations. I would highlight just a few of them for you, starting with sac-TMT. You might know this is our TROP2 antibody drug conjugate. We now have this antibody drug conjugate in 16 Phase III studies, 11 of which have the potential to be first in class. And this is going to be a very important area as we look forward. In immunology with tulisokibart, we have an important Phase IIb studies underway now looking at different opportunities beyond where we started in ulcerative colitis and Crohn's, we now have 6 studies, 4 that are in Phase II, 2 that are in Phase III. In ophthalmology, we have important studies underway now with MK-3000 as well as MK-8748, and I'll get more into that in a little bit, and we can jump to it on stage. But importantly, we're about ready to start anytime. I think it's imminent, Dean, a new Phase III study for MK-8748, which would be a meaningful acceleration of that asset when we did the EyeBio deal. In addition to what we're doing from a clinical perspective, we are also delivering successful new launches. We have a growing first wave of products which are starting to contribute to the growth of the company. You can see those with WINREVAIR for pulmonary arterial hypertension; CAPVAXIVE, which is our PCV vaccine; ENFLONSIA for RSV. As I mentioned, we had QLEX, which we launched in the third quarter. And recently, we just closed and added Ohtuvayre through the acquisition of Verona, which we brought in and we'll see the benefits of as we move into the fourth quarter, which is an important new drug in the area for patients with COPD. This is, in and of itself, a multibillion dollar opportunity we've added. So as we sit here today, we feel very good that we're starting to deliver proof points for our ability to commercially execute on the more than 20 growth drivers we have. This is just a small sampling of those, and we'll get into more of them in a moment. And importantly, we're starting to see a much more diverse and broad pipeline to drive that growth with these growth drivers as we look forward. We've been doing business development to augment the strong pipeline we have internally with Verona, I just mentioned with Ohtuvayre, the first-in-class PDE3, PDE4 for treatment of patients facing COPD. This is the first new maintenance inhaled treatment in over 20 years in this space. It's off to a very strong start, and we're very excited about this opportunity. And recently, we just closed on Cidara, which is -- you probably maybe know what a CD388. That's the way it was referred to under Cidara. We now call it MK-1406. But this is a potential first-in-class, once-per-season, strain-agnostic antiviral in an important space to help high-risk patients facing the serious consequences of flu. We have the deal we did with Hengrui for their oral small molecule Lp(a), and we are already looking at how can we combine this with enlicitide as a potential combination therapy for patients facing cardiovascular disease. This all builds on the business development we've already been doing since 2021. We've now invested over $60 billion since 2021 in business development. You see the list of companies here. But importantly, we're not done. We have more to do. And I think we've shown a track record where we will move with discipline, and we will move with intention where we see scientific conviction behind an opportunity that aligns with value. We're going to continue to do that in the exact same way we've been doing it to date. As you look at all of this, what this starts to pull together is the success we've had since 2021 in focusing on building out our pipeline. And I'm happy to say it's now becoming a reality. We have the most diverse pipeline in terms of both therapeutic areas and modalities. And I think legally, I have to say in recent history, but I would tell you it's probably at any time in Merck's history. And importantly, based on what we're seeing, we now have visibility, as I mentioned, to commercial opportunities based on that success through new growth drivers that will be more than double what KEYTRUDA will be at its peak sales based on consensus estimates in 2028. Importantly, that $70 billion is $20 billion more than where we were this time last year due to what we've added to business development and our increasing confidence in some of our internal assets. And I would point out that while we talk about $70 billion by mid-2030s, we now believe we're going to achieve $50 billion by the early 2030s. So the progress is significant. Our confidence is high. And probably the most important point, and I'll come to it in just a moment, we're going to have the opportunity to materially derisk a big portion of this over the next 2 years. If you look at what makes up this $70 billion, we often get asked, what are the drivers? There are really 10 programs, 10 key programs that make up 70% of this $70 billion. If you look at them, all of them have blockbuster potential. We see them as multibillion-dollar opportunities. Nearly all of them are first-in-class molecules. Four of the 10 are either already launched or have positive Phase III data, and the rest will have important Phase III readouts over the next 12 to 18 months. Two of them have received the Commissioner's National Prioritization (sic) [ Priority ] Voucher and that goes for enlicitide and our sac-TMT offering. So we have the opportunity to not only deliver a pipeline, but to continue to accelerate our ability to bring that forward. That's why we have the confidence I'm talking about. If you look forward, in addition to the products we talked about which were either launched or about to launch with enlicitide on the base, by the end of 2026, we will be in a position that we will have derisked clinically $35 billion of the $70 billion through positive Phase III readouts we would expect to see. We will cover substantially all of the $70 billion by the time we get to the end of 2027 through what we have with sac-TMT, MK-1406 and our I-DXd. So as we sit here today, we feel very good about what we have. There's always more to do, but I'm really proud of the team. I'm proud of Dean and our commercial colleagues, our manufacturing colleagues. They have delivered, they continue to deliver, and I have every confidence we will continue to do so. As you look forward into 2026 through the remainder of this year, we have some really important data readouts. We have islatravir in combination with lenacapavir in a Phase III study focused on once-weekly oral for the treatment of people with HIV. This has the potential to be the first weekly oral. With MK-3000, we have a new mechanism of action, the first new mechanism of action in this space in 20 years, aimed at diabetic macular edema. We see that coming forward with a Phase III in September of 2026. Importantly, this is well ahead of when we did the deal. We've significantly accelerated this program. I already mentioned to you that we also accelerated MK-8748. It's why we have such confidence in our ability to have a meaningful impact in the ophthalmology space. And then we have tulisokibart, where we have the first of many studies coming, but this one is the Phase III in ulcerative colitis, which will read out in August of 2026. As you look forward to 2027, for sac-TMT, I mentioned we have 16 Phase IIIs, 11 that are potentially first-in-class. We have multiple Phase III readouts coming in 2027. And I mentioned one of those will have the CNPV voucher. For MK-1406, which is previously what we called the CD388, this is the long-acting antiviral we got with Cidara, we expect to be in a situation to have the Phase III readout there with the primary completion date of January of 2027. And then for I-DXd, which is our B7-H3 antibody drug conjugate, we'll have -- this is actually being studied across multiple different tumor types, but we'll have the first Phase III readout in a very important space in small cell lung cancer coming during the year, and then we'll see more coming after that. Small cell lung cancer continues to be an area where there's really a true unmet need, and we could have one of the first real meaningful opportunities to drive innovation in that space. So as we sit here today, I feel very good about the progress we've made, we have more to do. But as we sit here today, we're executing on our strategy. We have, I mentioned, over 20 growth drivers, the first wave already here among us. We have a catalyst-rich period over the next 18 to -- 12 to 18 months. And importantly, we're delivering on our purpose. We're delivering for patients. We're delivering for unmet needs. And ultimately, if we do that, we're delivering for our company and for you, our shareholders. So I couldn't be more confident as I sit here today. It's why we continue to talk about KEYTRUDA as more -- the LOE as more of a hill than a cliff. And I'm quite confident that we will be in a position at a minimum to go through a very shallow period post the LOE returning in a few years to growth. But we aspire for more, we aspire to grow through it, and my confidence we'll be able to achieve that is high. We have more to do. We're not there yet. But with the actions we've already taken, the progress we've made and the execution we've demonstrated, I'm confident we eventually will be there, and that's my hope as we look forward to the future. So with that, maybe I'll stop, and we can jump in for a Q&A. Thank you.

Maybe just to kick off the question with that hill, not a cliff comment. I think you've described the KEYTRUDA LOE is something that's very manageable. We've obviously continually been building out this pipeline. Where we sit today, how confident are you that you can manage through this 2029 through early 2030 period without a meaningful degradation in the company's earnings?

Based on what I just showed you, we're highly confident. The fact that we now have that $70 billion and that we're going to be able to be in a situation by the time we get to the end of 2027 to have clinically derisked almost all of that is very important. And I should point out, and I didn't say it in the prepared remarks, that does not include Animal Health. Our Animal Health business right now is one we think will double, more than double from 2024 through the mid-2030s on a story very similar. It's about a wave of new product innovation coming in that space. It doesn't include our early Phase I pipeline. We have a large number of important Phase I, late Phase I products or Phase I programs that will be reading out starting this year. It's going to accelerate as we go into '27. And many of those could potentially have impact in this window of time. And you'll see more of that as those move into Phase II, we'll start to talk more about those. And then also, it precludes further business development. So when I look at all of those elements, my confidence that we will see it be a shallow fall followed by growth in a few years is quite high. And I would point out, we modeled it on a risk-adjusted basis. That's assuming we achieve standard industry probabilities of technical success. If you actually look at what we've done over the last 3 to 5 years, we've actually done much better than that. So if you can assume we are more successful, that is on the upside from what we're communicating.

On the $70 billion target, I know it's stepped up $20 billion over the last year. How much of that is external? How much of that's internal? Any directional color you can provide?

Yes. It's roughly -- if you look at the change we made, it's about half from the external opportunities we see and about half from internal.

All right. And as we go through the next year or 2 in terms of derisking, what are the most important events you'd point to that help derisk that $70 billion charge?

Well, I would go back to the 6 programs I showed coming. And I think those are going to -- those are really -- if you think about it, of those 10 key programs, we focused on 10 key products which will make up 70% of the [ $7 billion. ] By the time you get to the end of '27, they all will have been meaningfully derisked. So you can pick which one. It's hard to pick which is your favorite. You don't want to tell your children which one you love the best. I love them all equally.

On business development, obviously, 2025 was a very busy year for the company. There's been some headlines heading into this year. Can you just -- taking a step back, with the $70 billion that you now feel you have in-house, what's the appetite for further deals? And kind of what's the parameters you're looking at as you consider putting additional capital?

I appreciate the question. Now if you look at where we are, and I tried to address it a little bit in the prepared remarks, but we have been very disciplined. Since Dean and I took over in 2021, it's -- we followed a very consistent pattern. It always begins with what is the science? It always comes down to, is the conviction of my scientific teams there behind the opportunity? What is the unmet need that we're addressing? And if there is high conviction and excitement among my scientists, there's an unmet need we can address. And I see it aligning with our strategy. And overall, we see a path to create value. I think we've moved -- we're -- or shown we're willing to move fairly quickly and decisively. And we've done it ahead of data. We've done it after data. It all comes down to that conviction. And so that is the model we've been following. It will continue to be the model we've been following. The areas of focus continue to be the same: oncology; cardiometabolic, now cardiopulmonary, you can kind of look at both of those spaces; immunology; and then beyond that, it's more around areas of probably opportunistic focus. But really, those 3 tend to be the sweet spot of what we're looking at. From a phase of development, we're open from Phase I through to Phase III. Obviously, as we move closer to the LOE, we've been more focused in the later stages. And you've seen that the deals we've been doing have been either Phase II, Phase III or in some cases, commercialized assets. We'll continue to focus that. As I think about the periods of time, there's now through 2028, there's '28 -- they're through 2032, 2035, if you will, and then 2035 and beyond. Everything we do looks at how do we impact each of those periods of time. So we don't look at trying to drive revenue for any one window. It's how can I bring science that brings commercial opportunity, but then it's complementary and builds on to our sustainable base for long-term growth. If you look from a dollar perspective, we've been in that -- looking in that up to $15 billion range has been kind of where we've been looking. But we've been very clear, we're willing to go larger than that, but we only will do so following the exact same logic and discipline. And if we see an opportunity that brings the science where we see value, we'll move. We have the capacity, I think, to do pretty much anything we would want to do, but we will be disciplined. And in the end, while I feel very good about where we are, I still aspire to grow through KEYTRUDA. And that's starting to become within potentially our reach. We need to keep executing. We need to stay focused. And so we want to do more. We're going to continue to be disciplined. I don't feel that we have to do something, but we're going to do it if it's a smart thing to do, it's the right thing to do. And that's been where we have been and that's where we'll continue to operate.

And just remind us on capacity, kind of where the company is today, where you'd be comfortable taking leverage?

Yes. So I would say we're multi tens of billions of dollars -- is that the way -- I've got to look at my CFO. I would spend more, she won't let me. It's just the way it goes. But in the multi tens of billions. I would look at it differently and say, we are not limited from a balance sheet. It's more where do we see strategic opportunity.

Okay. Excellent. Maybe pivoting to some specific products. Oncology. TROP2 seems like a very interesting one, one that, to me, feels very underappreciated by investors. Can you just talk about your aspirations for your program? I know you've got a huge Phase III set of studies running at this point. And when you kind of dig into those studies, which was -- the ones you're most excited about?

Yes. So our vision of sac-TMT or our TROP2 ADC is that it will be our workhorse ADC. And we have 16 Phase IIIs, and we say 11 of them are in indications that other people haven't moved in, many of them are, for example, in GYN. But I would also emphasize that we have a great collaboration with Kelun. And they've shown China data in where some people say the TROP2s are crowded, which is lung and breast. And that data looks compelling and differentiated. So we're going to places that no one is there or we'll be first, 11 out of 16. But in the places where it's tight, one can look at the data from Kelun and potentially extrapolate to us and say, that's a differentiate. And you ask yourself, why is it differentiated? It's one thing to say TROP2 and the antibody, but ADCs are linkers and payloads. And some are too loose, some are too tight, and maybe as ours is just right.

I like that one. In terms of the time lines of these reading out, is it possible we see more data in '26 from some of these programs?

I think there's PCD dates in '27, but this is oncology. It's event, and there's always chances for interim analysis earlier than that. And we're also excited by the fact that the administration also recognizes the possibility of this being an important asset and giving us CNPV so that if we do have data turnover, our ability to get it to patients even faster is there.

Great. And of the -- I think you said 11 of these are novel, correct me if I'm wrong, which are the ones there that you're most excited about?

I would say, endometrial, many of the ones in the GYN space. And it's a place where it's -- we have the potential being first-mover advantage. But I should also say that in "the crowded space" like lung and breast, we have seen pretty differentiated data from Kelun. And so if that flips over, that can get me very excited as well.

Yes, yes. So this isn't just about the novel...

Right, right. Yes.

It might be worth just also commenting on, yes, we've recently went from 15 to 16 because we initiated a new study in combination with QLEX. So as we think about what we're going to have as our next -- as our life cycle planning for how do we continue to bring value for patients longer term, we are already looking at how can you combine with QLEX as an opportunity that brings advantage to patients, brings combinations with better outcomes and also is one that we think we feel very good about.

Actually, on QLEX maybe just an update of how that roll out is...

Yes, yes. So as I said, we received approval at the end -- I think it was October, end of Q3 of last year. It's early. Obviously, we're still just through the fourth quarter. I would say we're on track, but importantly, our confidence that we can achieve that 30% to 40% adoption in the next 18 to 24 months continues to be quite high. As we've pointed out in the past, for the first 6 months, while we're waiting for the final J-code, it will be a little bit slower, but then we do expect to ramp to that 30% to 40% in the United States. And as you know, this is primarily where we see the highest rates of adoption coming will be in monotherapy or in combinations with oral agents like Lynparza, like WELIREG, as an example. But we do -- while we see those as the areas where we see most adoption, and I should stress that would also include where we have many of the early-stage indications, we now have 11 early-stage indications, what, 5 with overall survival, but it also, we do think we'll have adoption into the space in patients who are on IV, we just think it will be less in that space.

So you're only just thinking in terms of what a tail could look like on KEYTRUDA when we can consider that 30% or 40% opportunity?

Yes. So if you look at where we are, our goal is, in 18 to 24 months, to have 30% to 40% adopted. That would put us out about the period of time depending on what happens with the LOE to be in a situation that we have that at the time that we lose exclusivity. Our intention is to price to ensure we can maintain share and maximize that tail as long as possible. So we're looking much more at the value under the curve as opposed to trying to do something where you take a short window of time to optimize value and then have it fall off a cliff, if you will. We've not given specific guidance for how we see that, but I do think it will be a meaningful tail that we can maintain through time.

Great. Just going to one of your required assets from last year, Cidara. Can you just talk a little bit about how you see this fitting into the flu landscape? And how big of an opportunity this could become for Merck?

Yes. Maybe Dean can start on the clinical side, and I can speak to the commercial piece.

Yes, I really like this asset. I mean, it's essentially an antiviral that we know works. And it's conjugated not as an ADC, but conjugated to an Fc. So that all of a sudden, you can give it one time and you can protect someone for the whole season. And as everyone knows, those people who are immunocompromised or those people who are, let's say, on KEYTRUDA or on tulisokibart or sotatercept or Ohtuvayre, they need extra protection than the normal vaccine can give you. So it just fits perfectly with the story in our pipeline and the patients that we want to treat. One of the other things that I think is important is it's one time that you give it, it's strain-agnostic, it's going to cover you for the whole season. But I think the other sort of thing that -- I don't know if you call it a tailwind or whatever, but with the pressure on vaccination, I cannot foresee flu vaccination increasing in this country over the next 3 years. I would imagine that if we're hopeful, it stays the same, there's a chance that it will come down. And so I think this product is really important but it's also really important in a timely manner as well.

Yes. Maybe just to give you a sense from a commercial opportunity. And I think, obviously, we're all living this right now with what is one of the worst flu seasons we've seen. And what you often forget is if you're immunocompromised, if you're otherwise have comorbidities that puts you at high risk, if you're over 65, this is a serious situation. 70% to 80% of hospitalizations are with people over 65. 90% of deaths from flu are in that over-65 category. So while we have the vaccines, and I would tell you, we believe probably 70% to 80% of that high-risk population or immunocompromised population are being vaccinated, the vaccines, while effective, are not, let's face it, they're not as effective as you would like. We actually show much more effectiveness with the antiviral than just with the vaccine. And so the opportunity to protect that population is important. We're talking about 110 million people. 85 million who are high risk or immunocompromised, 25 million in that over-65 age range. So just going after that population, which is where we're starting is a huge opportunity. Obviously, our ability to potentially expand beyond that, we're looking at for many reasons that Dean was highlighting, but that alone is a significant opportunity. We're going to go there first. But we're looking at this as a greater than $5 billion opportunity for us as we look forward. And I think this could be one of those assets that still surprise us to the upside.

And then potential for an interim analysis here just given the flu season that we're seeing?

Yes. So we -- it's been completed for the Northern Hemisphere. We are going to open it up to the Southern Hemisphere. So those of you who are sitting next to someone from the Northeast right now, if you want to be in the trial, you need to go to the Southern Hemisphere. But there will be times for interim analysis. We won't quite announce that. But there is a possibility that we'll see an interim analysis. But right now, we are going to open in the Southern Hemisphere. We need those patients. We need a broad patient population to be able to have as robust of a label as possible.

Okay. Pivoting over to the oral PCSK9, can you talk a little bit about just time lines here, how we should think about this? And then as we approach the launch, how you think about patient segments that could kind of adopt this one quickly?

Why don't you go ahead, too?

Yes. I mean, so you've seen some of the data at American Heart Association. I think the data -- the way that we've said it is we want to make the most potent LDL-cholesterol-lowering pill ever made and that we wanted to have a pill that essentially looked like the antibodies. And I think the data at AHA, 2 of the 3 studies were shown. A third one will also be shown later on this year. So we basically have a biologic in a pill. When you look at the clinical data, it's 97% compliance. And when you look at the adverse effects, the adverse effect looks no different than placebo. So this is something that we could really democratize the PCSK9. Our intention is to file. And then we are also, like sac-TMT, has the opportunity to do with the CNPV. And that's a relatively new program, and so we're working with the government. And so that time line means that we probably have the opportunity to potentially launch maybe early next year, but maybe even this year, and we're excited by that. The last thing I would just say is there was also data presented at American Heart Association that's really important. So many of us here have an LDL of 90 and 100, and our doctor says it's just fine. But there was data shown that if you take an antibody to PCSK9 and you lower that LDL from 90 to 100 to 45, I think they had an improvement in cardiovascular outcomes of 20%, 25%. This emphasizes why it's important to democratize PCSK9.

You might comment that we act in exactly the same way as...

Yes. I mean so this molecule is truly interfering with PCSK9 in a very similar epitope as where those antibodies. So this is truly an antibody in a pill.

Ask about just -- you talked about a multibillion-dollar opportunity here. Should we expect a gradual ramp like we saw with Repatha? Or just given some of the dynamics of how the injectable markets played out, could this be a little different?

Well, I would say I think we will see a faster ramp than Repatha. What will drive though, what ramp we see is really -- we're looking at really 3 factors that we're focused on. Obviously, it starts with our ability to educate and activate patients and physicians. I would say this is an area where it's been a little bit sticky, if you will. You haven't seen much change. And so we're going to have to educate people and get them willing to think differently about layering therapies in a way that maybe they haven't thought about, both as the physicians as well as the patients. So doing that education and activation will be important. One of the things we think that can help drive that desire is if we can get the guidelines changed. We've done a lot of work. I know others in the space are doing work in this space, and Dean can speak to it. But with all the data that came out through the VESALIUS study through what we're doing and others, I think there's a renewed discussion about what should be how you think about managing your cholesterol and what is good enough, but what actually can you do to be even better, especially if you're a high risk. So we're going to continue to push for those guideline modifications. And if we can achieve that, which I actually have pretty good confidence, we will. I think that's going to be an important step. And then the third element of it is we've talked about, we're going to affordably price this to drive access. That still will require the payers, the insurance companies to adopt this. We think they will, but we're going to have to do work. So those 3 levers will determine the speed of the ramp. But maybe just -- so the long-term opportunity, by the way, is meaningful. But how fast it happens will depend on that. But maybe just to size this real quickly. If you look about it today, there's 80 million people across U.S., Europe and Japan who are on lipid-lowering therapies and not a goal. In the United States, it's 30 million. And that's both primary and secondary prevention. And it's roughly -- it's not exactly, but it's close enough, half primary prevention, half secondary. So our intention is to go first for the secondary prevention market. And then from there, over time, broaden into the primary prevention market. So we see an opportunity, both initially to go with a layered approach on -- for lipid -- to try to do the lipid-lowering therapy. But over time, we have a broadening strategy not to mention then we have a combination strategy. If you go on clintrials.gov, we already have underway a combination study in combination with rosuvastatin, so a single pill, both the PCSK9 and the statin. And as I mentioned, while we haven't started the studies, we are looking at kicking off with our LP(a) small molecule, a combination of our PCSK9 with that. So Dean talks about you got to be first or best and then you got to think about what's next. So we have a life cycle management strategy here to make this a meaningful long-term opportunity beyond that first wave.

Maybe last one on the pipeline for me. You highlighted immunology, ophthalmology, HIV in terms of important readouts over the next year or 2. Can you just talk about the strength of Merck's pipeline in these settings? And how do you think about Merck competing in some of these spaces where there maybe is a bit more entrenched competition?

Yes. Well, I firmly believe and Dr. Perlmutter used to always say when he was at Merck, great products make great franchises, great franchises don't make great products. And I think the key of what that really the message of that is it starts with if you have a product that is truly differentiated, that is the most important aspect. And part of the confidence across everything we've laid out, we think we have that, and especially in immunology and what we have with tulisokibart with our TL1A. So across immunology and ophthalmology, I think we are there. So that's the most important piece. But beyond that, we've spent a lot of time focusing on how do we make sure we build out both in terms of dollars of investment. You remember, we did the multiyear optimization where we were looking to take out $3 billion of spend. That was not because we wanted to lower our spend. In fact, we're going to be accelerating our spend but redirecting that $3 billion into these programs. So we are very focused to make sure we invest behind them fully, which we're doing, and that we have the right capabilities. We spent all of last year going bottoms up and then top-down, outside-in to look at this with myself and the strategy team kind of doing the top-down, outside-in and then looking at what we would build based on the way the peers have operated and then comparing that to the plans the teams were building. And that's informed where we saw we needed investments and capabilities. We're already addressing those gaps. We've brought in a lot of external talent where we needed to augment. So I actually feel very good that we're positioned to succeed across these commercially.

Great. Maybe time for one last question here. Just on GARDASIL. I know this is a big area of focus for the last 1.5 years or so. Latest update in terms of how you're thinking about trajectory of that one given what you're seeing ex U.S., some of the recent CDC changes, et cetera?

Well, I would start by saying GARDASIL is -- continues to be a very important product, first and foremost, for patients. It is truly an anticancer vaccine. And it's a tragedy that everyone is unvaccinated because it can prevent cervical cancer, it can prevent many head and neck cancers, other cancers. So I start there. But putting aside the patient aspect, if you think about it from a business perspective, it remains important for the company. But as we've already said in the past, it is no longer a key growth driver for the company. As we came into the year where we had communicated previously as we expected modest growth with this. Obviously, the thing that has changed, as we recently heard from the CDC that are now putting out a recommendation to move to a single dose in the United States. I can talk about that in just a second. But we'll have to deal with that. But as you look in total at this, as we think about 2026, I would say we see it as a stable product. We're going to continue to invest for the growth. Any growth that's there is modest, and we need to see how this single dose plays out. As it relates to that specifically, if you look at the market in the United States. So for the first 9 months, just to size this, in the first 9 months, we've sold $2.2 billion of GARDASIL in the U.S. 2/3 of that is in the pediatric adolescent space. And that's really the only piece we're talking about. That's where the CDC changes going to single dose effect, not the adult population 1/3. So that $2.2 billion, if I annualize that for simple math, let's just say $2.7 billion, that's not a guidance number, by the way, it just divides easily by 3. You should look at it and you say, of that then you can think of $1.8 billion being the total for that adolescence. Today, average completion rates are only 1.6 doses. In worst case, it will go to 1. We don't actually think it goes to 1 because importantly, what the FDA and the CDC maintain is they maintain shared decision making with your physicians. And all of the insurance coverage, both from a commercial and from the government, have been maintained. So if you want the 2 dose per the label, you can get it, it will be reimbursed, and we believe pediatricians largely will continue to prescribe and recommend that. So we're going somewhere from 1.6 to something between 1, maybe 1.2, 1.3. Needless to say, it is not significant for us in 2026. It's manageable overall. I'm more concerned about it from a health policy perspective than I am, frankly, as a financial matter for the company.

Well, we're out of time. Congrats on all the progress. Thanks so much for your time.

Thank you very much. Thank you all.