Merck & Co., Inc.

My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to the Merck & Co. Q3 Sales and Earnings conference call. All lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To resolve your question, press the pound key. Thank you. I would now like to turn the call over to your host today, Peter Dannenbaum, Vice President, Investor Relations. Please go ahead.

Thank you, Lara, and good morning. Welcome to Merck's third quarter 2020 conference call. Today I'm joined by Ken Frazier, our Chairman and Chief Executive Officer, Rob Davis, our Chief Financial Officer, Dr. Roger Perlmutter, President of Merck Research Labs, Frank Clyburn, our Chief Commercial Officer, Mike Nally, our Chief Marketing Officer, and Dr. Dean Lee, Head of Discovery Research. Before we get started, I'd like to point out a few items. You will see that we have items in our GAAP results, such as acquisition-related charges, restructuring costs, and certain other items. You should note that we have excluded these from our non-GAAP results and provide a reconciliation in our press release. We've also provided a table in our press release to help you understand the sales in the quarter for the business units and products. I would also 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 belief of Merck's management and are subject to significant risks and uncertainties. If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Our SEC filings, including item 1A in the 2019 10K, identify certain risk factors and cautionary statements that could cause the company's actual results to differ materially from those projected in any of our forward-looking statements made this morning. Merck undertakes no obligation to publicly update any forward-looking statements. Our SEC filings, today's earnings release, and an investor presentation with highlights of our results are all posted on Merck.com. With that, I'd like to turn the call over to Ken.

Thank you, Peter. Good morning and thank you all for joining today's call. I want to start by acknowledging the extraordinary efforts of scientific experts across the biopharmaceutical industry who are rising to the challenge and working tirelessly to find solutions to help end the pandemic. We remain confident that science will prevail over COVID-19 And Merck is committed to contributing its scientific expertise and resources in support of these worldwide efforts. The momentum in the development of medicines and vaccines to address the pandemic is a testament to the societal value of our industry's continuing investments in science and to the women and men who are working with urgency and dedication to make it happen. Merck has a special responsibility to apply its expertise given its long and productive history in antiviral and vaccine research. And we are advancing our vaccine and antiviral programs to focus investment of effort and resources. We have made significant progress over the last few months across our COVID program, and our learnings reinforce our confidence that the approaches we've selected are among the most promising. We are moving forward with dispatch and diligence. Designing our clinical studies in a manner that, if successful, will provide physicians and patients confidence that our candidates are safe, effective, simple to administer and distribute, and capable of being used not just in millions but billions of people. While we understand the importance of moving expeditiously in light of the pandemic, our experience with the natural history of other pandemic and epidemic viral diseases counsels us to seek enduring solutions that can be deployed globally now and for future generations. It is an exciting time at Merck, and I am encouraged by our scientists' enthusiasm for the innovative research happening in our lab, not just on the COVID front, but across our broad pipeline of promising medicines and vaccines that we are continuing to invest in. Our deep pipeline and the team of world-class scientists at Merck Research Lab is a result of the stellar leadership and many meaningful contributions made by Dr. Roger Perlmutter, who will be stepping down from his current role at the end of this year. I'm grateful for the extraordinary contributions Roger has made to science, medicine, and the health and wellbeing of people around the world, as well as to all of us here at Merck. Roger leaves behind a strong legacy of historic breakthroughs in immuno-oncology and many other fields of medicine that have transformed clinical practice and improved patient outcomes. Under his leadership, the company has received more than 100 regulatory approvals for its medicines and vaccines globally. and he has revitalized the future of R&D at Merck. Dr. Dean Lee, currently Senior Vice President of Discovery Sciences and Translational Medicine, has been appointed to succeed Roger as Head of Merck Research Laboratories effective January 1, and I look forward to welcoming him to Merck's senior leadership team. I am confident that Dean's knowledge, energy, and experience And this purposeful pursuit of new technologies and transformational discoveries will help Merck sustain the successful execution of our broad portfolio during this important time, advance our scientific strategy, and build on the strong momentum in our pipeline. Now, moving to our third quarter performance. We continued executing on our strategic priorities while once again delivering year-over-year growth in revenue despite some ongoing impacts of the pandemic and very strong EPS growth. Importantly, we exited the quarter with continuing business momentum. We are performing at a high level with production, supply, and distribution of our medicines, vaccines, and animal health products and clinical trials moving forward with minimal disruption. The underlying demand for our products remains robust globally, as evidenced by the growth we achieved in oncology and animal health. We are also encouraged by the recovery we are seeing in vaccines and those parts of the portfolio most affected by the pandemic's impact on healthcare delivery. We are executing well in the marketplace to drive growth across our existing portfolio and in our labs by advancing our innovative research program. Meaningful new data that we've recently disclosed in several areas of research, including oncology, vaccine, HIV, and others, increases the confidence we have in our ability to introduce new innovations to the market and sustain strong long-term growth. And our financial strength also allows us to execute on our capital allocation priorities, including our ongoing investments in both internal R&D and external business development, such as the recent oncology collaborations with Segen. At the same time, we are advancing our plans to spin off Organon, which is on track for completion in the second quarter of 2021. We remain confident in our decision to create two more focused companies devoted to their respective strengths and portfolios, and better positioned to navigate an evolving healthcare landscape and enhance value for patients and shareholders. We continue to hire talented and experienced leaders who will help drive Organon's success as an independent company. Let me conclude by expressing my confidence in the business and our ability to advance our pipeline despite the challenges posed by the pandemic. Additionally, I express my sincere gratitude to the frontline healthcare workers and our employees who have worked around the clock to help patients affected by COVID-19. Their dedication inspires all of us at Merck to remain committed to our mission and relentlessly pursue innovative science to help prepare for the greatest health threats, both now and in the future. And with that, I'll now pass the call on to Rob to review the details of our performance and our outlook.