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

Very helpful. Thank you very much for that. -- so now I want to move beyond oncology because you have a lot going on beyond oncology as well. Maybe starting with the eBio asset. I mean you'll have data this year in 1 of the trials. So the question here is it's a trial, non-infra trial versus Lucentis, However, does do you internally believe that you have potential to demonstrate superiority there? Because the argument is that you are going after the weakest drug there, but it's a little bit refractory setting. So you're going after a different market there. How should we think about -- how did you think about the commercial opportunity when you design the trial and...

Yes. So we had the fortunate concept is that when we're designing that trial for M3000 -- we also know that we have MK8748 -- so the 2 of them together, although we're prosecuting each 1 independently, makes us think about the field a little bit differently. So all the anti-VEGFs whether you go from Lucentis to EYLEA to the Ismo, they've all been non-inferior trials, right? And so what we're hoping is with 748, which is not MK 3000, but it's a anti-VEGF tie 2 agonist. We are hoping that, that 1 will be a best-in-class anti-VEGF. So that to us is like going right down in the belly of the beast and saying, of all of these molecules, this 1 will be the best. In relationship to this wind agonist, all of the other major medicines have been VEGFs. There haven't been an anti another sort of non-EGF -- and people recognize and ophthalmologists recognize that anti-VEGF is really important, but anywhere between 30% to 40% of people don't respond or stop responding. So what we wanted to do is create an option for them. So all of a sudden, they have 2 hands to fight. They have the best anti-VEGF and they have the first non-VEGF pathway. And we believe that in true practice, what will happen is ophthalmologists will begin to mix and match them on their own. So for us, it was just really important to have a really clear signal that if right, no one's had a new mechanism of action, and we're hoping that MK3000,remigrmig is that first non-VEGF pathway. And if we can do that and also come up with 87 48, I think we could really create a situation where ophthalmologists will think about their field for diabetic macular edema and for neovascular AMD, 2 of the major places very differently with both agents in their hands.

Is there a reason to believe Wintwould also work in [indiscernible]?

I think you would say that there is a chance that it would be it, and it's more from the anti-VEGF sort of feel, in general, things that have worked in neovascular AMD have worked in DME and DME and neovascular AMD. I think for 748, you'd be very on very strong because there's so much precedent -- what people would push back is, well, that's great. You have a new mechanism of action, prove it to me. So the issue is that whenever you have a new mechanism of action, I do think that you have a high standard to convince people, and it behooves us to prove that to people.

Really makes sense. So with the 2 the data on OCT and drying they, they are pretty strong actually compared to anti-VEGFs as well. So how do you envision like this playing out like -- is that the reason you believe it is probably the best in cloud like what gives .

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

Yes. I mean they treat based on the basis that's what they treat ...

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

Very helpful. Moving to TL1A, -- so I mean, congrats on the success of alternates trial. -- how -- so there are 2 schools of thought there. Like 1 is that TL1A, it doesn't have to be superior. -- like -- it doesn't have to be numerically better than IL-23 or anything because it is super clean drug. This has a place, and it's a new mechanism of action, so should have a place. And then there's other 1 because like with IL-23s V and all these guys are going in combinations and all. So maybe the bar to move into first line will be higher, so it becomes a second-line drug or combination will be important. How do you envision the market in the next 4, 5 years?

So I would separate the different places, right? So in our mind, we're trying to make TL1A a really important note Other important nodes are TNF and IL-23 and the IL-17 and they dominate in different indications. So we'll have to sort of play this out. I think for GI, which is ulcerative colitis and Crohn's disease. I think people start thinking of drugs like IL-23 is they're highly effective and they're reasonably safe. I think some people start talking about other mechanisms like integrins that some people believe are maybe not as effective as the IL-23s, but they're extremely tolerable. . So people stay on our ambition for whether we're talking about GI or Der or room is that among the biologics, we are the best, if not the best, but we are the safest as well. And that in each different indication will be important, and it will also be important because it gives us a degree of flexibility because if you have 1 of the most effective, if not the most effective and you're extremely safe -- should you do a combination strategy, you're in a very good position than if you don't have that profile. So that's the profile we're looking, whether it be GI, whether it be Derm, whether it be room.

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

So I'll have Caroline talk about the commercial push and pull. I'll talk scientifically from it. So just to be really clear, not all PCSK9s are the same. The antibodies, I think, in general, people think of LDL-cholesterol lowering of 60%. If you look at the sRNA or other things that affected PCSK9, I think the number is more in the 50%. So not all PCSK is the same. I think the field and the FDA was very clear. They understood that this was designed to do something very similar to the antibody. And essentially, it was designed with the concept of can I do the same thing that a biologic does, but do it in a pill. And what people saw from the biomarker data, which is LDL and ApoB and this, the profile looks surprisingly similar in a biomarker sense to the antibodies. We still need to do the outcome trial, but I think many people in the field sit there and go, okay, this was designed to interdict PCSK9 LDL like the antibodies. It gives you the biomarker profile that looks similar. They're going to have to do the outcomes trial. But I think the FDA recognized it and you saw how they recognized it because they didn't make any comment in terms of not having cardiovascular outcomes in the label -- what they emphasized is this should be as an add-on in statins, and they reminded everyone that status has outcomes trial. And they also reminded everyone that the monoclonal antibodies, which this was designed to mirror was also in the label, but we do have to do the outcomes because we have to prove that. But I think for many cardiologists than many people seeing the profile of the LDL and knowing the history of PCSK9, I think many people will be very comfortable prescribing it, especially if it's extremely accessible. And then from commercial, I'll have you speak about it..

So we're very excited about the opportunity we have to bring an oral PCSK9 to really address this epidemic that exists -- what we have with Lipfendra is we're entering a market that now has guidelines in place after many years where those guidelines did not exist on treating to a target level of LDL. And so those guidelines will really help unlock some of the inertia that exists in this marketplace. In the U.S., there's 30 million people who are taking statins who are not at goal -- about half of those are secondary prevention, about half of primary. And we think, initially, we expect utilization to be more in that secondary group, those who have established ASCVD. . We're getting really strong feedback at this stage from those who have seen the data, understand the data, understand the accessibility of this oral product and see the pricing strategy that we've had as a company. And initial scripts are looking good. So our confidence in Lipfendra and its ability to be multibillion dollars in peak revenue is high. We're working hard to break that inertia and we expect to see good uptake ahead of the CVOT study.

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

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

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

To be honest, it hasn't really evolved that much -- the critical piece of information for me is the way that you give this medicine, so it's essentially an antibody drug conjugate. That's the simplest way to explain it, where the drug is an antiviral. And the issue that comes up is that you go to your physician and you get. And there was a view that was held throughout the field that you really shouldn't launch it with the as you should launch it with 2 jabs. -- at 1 time, right? You come in, someone gives a leg and they do your bump or something. I mean it's -- so they really thought that too was really important. So the minute that we do this, that means we have to change 3 jobs to 2 jobs that immediately creates a time of when we can launch. So the concept for me is until that time comes, I'm going to get as much data as possible because it's not just that I get a label. Remember, this is not going to be sold at the price of the influenza vaccine that I just got from the drug store. It's going to be more expensive. And so the question that comes up is we think that this is a really important product for the U.S. but also with MFN, we can't have a tenfold discount in Europe. And so we need to find patient populations where we can hold that price in a situation where we have robust subpopulations -- for example, it's not just immunosuppressed. If someone has cardiovascular risk is on lifendra should they get it does that make it -- that's the type of data because it's 1 thing for the label, which is really important. -- but especially outside of the U.S., how you deal with the HTA agencies will become really important. And the more strain, the more data, the more different subpopulations that we have whether they're statistically prespecified or not will be important for those situations. So we're not delaying the launch in any way. The minute you decide that you're going to do 3 jobs into 2 jobs. -- you create this issue. So my concept is, let me play it out all the way to the end and get the maximum amount of patients.

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

We're proud of the BD that we've done thus far. We've brought some great assets a company that has the opportunity to reface patient care and drive growth for our company into the future. As we look forward, that strategy is unchanged. We will continue to look for the best science externally. But when brought into March that will create value, address areas of unmet need and drive growth for the company. We're not desperate to do any deal, but we will continue to do the right deal for our company. What we've talked about in the past, and that's consistent today is a sweet spot has been deals that are in the $10 billion to $15 billion range. And we talked about as we look at areas of unmet need, that including oncology, including cadimetabolic, but we also see immunology opportunities. base. So BD will remain an area of focus for any cash that we have at our disposal, but science led to drive patient impact and growth.

Do you have anything to add?

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

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