Merck & Co., Inc.

Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mercantile Q4 Sales and Earnings Conference Call. Our 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 reply your question, press the pound key. Thank you. I would now like to turn the call over to Peter Dannenbaum, Vice President, Investor Relations. Sir, please go ahead.

Thank you, Lara, and good morning. Welcome to Merck's fourth quarter 2020 conference call. Today I'm joined by Ken Frazier, our Chairman and Chief Executive Officer, Rob Davis, our Chief Financial Officer, Dr. Dean Lee, President of Merck Research Labs, Frank Clyburn, our Chief Commercial Officer, and Mike Nally, our Chief Marketing Officer. 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 salesman quarter for the business units and products. And the supplemental financials posted to our website include recast 2020 quarters based on the reporting change we are announcing today. 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 Security Litigation Reform Act of 1995. Such statements are made based on the current beliefs of Merck's management and are subject to significant risks and uncertainties. If our underlying assumptions prove inaccurate or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. 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 Kevin. Thank you, Peter.

Good morning, and thank you all for joining today's call. Before turning to our financial results and our future perspective, I'd like to make a few comments about this morning's other announcements. It has been a distinct honor and privilege to serve this great company as its CEO over the past decade. I thank all of my Merck colleagues for their extraordinary support throughout this period. We are making this leadership change secure in the knowledge that Merck has the elements in place for a strong future of scientific innovation and profitable growth. Rob Davis is well prepared and well suited to help Merck capitalize on the many exciting opportunities before it, as well as to take on the challenges that lie ahead. He and the Merck senior team will provide outstanding leadership for our company in the coming years. Given Merck's current position of strength, The Merck board and I believe it is a good time to begin transitioning the company's day-to-day decision-making as well as its strategic direction to Rob, who will assume the title of president in April, at which point our operating division, human health, animal health, manufacturing, and research will begin reporting to him. I will retire as CEO at the end of June. but remained for some period of time as executive chairman to assist Rob, Dean, and the rest of the senior team. I'm extremely confident in the capabilities and commitment of Merck's people and Rob's ability to guide the company to an even brighter future. Moving on to our results. Despite challenges from the pandemic, Merck achieved solid growth in revenues and earnings in 2020, made meaningful advancements in our pipeline and added important assets through business development. Despite the particular impact to our portfolio, the underlying demand for our innovative medicines and vaccines remains strong. And our initial guidance reflects our expectation for a return to strong growth this year, 2021. Looking out to 2024, we continue to believe our revenue potential is underappreciated. Longer term, the work we are doing in advancing our internal pipeline and in adding assets through business development gives us increasing line of sight to significant potential growth drivers later this decade and into the next. I'm amazed by the dedication of our employees who rallied to keep supply under interrupted, regulatory filings on track, and clinical and commercial execution in line with our goals. And I remain continually inspired by what Merck accomplishes for patients around the world. I'm also encouraged by the progress scientific experts across the biopharmaceutical industry have achieved in bringing vaccines to markets that will help address the pandemic and start to return the world to normalcy. These successes further underscore the societal value of our industry's ongoing investments in science and innovation. Merck remains committed to developing an effective response to COVID-19 also. We have discontinued development of our COVID-19 vaccine candidates, but our therapeutic research programs continue to move forward. We believe that our oral antiviral candidate, momopiravir, could make an important contribution to treating COVID-19 patients and we look forward to seeing the results of our pivotal trials. More recently, we acquired Oncoimmune and have accelerated the development of MK7110, a Phase III candidate with strong potential in the treatment of severe and critical COVID-19 patients. I am encouraged by the innovative research happening in our lab, not just on the COVID front, but across our broad, late-stage pipeline of promising medicines and vaccines, including in oncology, HIV, and pneumococcal disease. We remain highly focused on business development to enhance our internal pipeline. We completed 120 transactions in total in 2020, including important acquisitions such as OncoImmune, Veloce Bio, and RQEL, and collaborations including Seagen and Ridgeback. Our plan to spin off Organon remains on track for completion late in the second quarter. As independent, more focused companies, I'm confident Merck and Organon will have the ability to more effectively pursue their respective markets, opportunities, and business strategies to bring more value to patients and to shareholders. Let me conclude by expressing my confidence in the leaders of this company and how proud I am of the Merck team's success in advancing our pipeline and maintaining business continuity in a challenging environment. Additionally, I'd like to recognize and thank the frontline healthcare workers, scientists, and government officials working together to bring the world back to normalcy. And with that, I'll pass it on to my colleague Rob to review the details of our performance and our outlook.