Merck & Co., Inc.

Thank you for standing by. Welcome to the Merck and Company Inc. Raleigh, New Jersey, USA Q2 Sales and Earnings Conference call. At this time, all participants are in the listen-only mode until the question and answer session of today's conference. At that time, to ask a question, press star 1 on your phone and record your name at the prompt. This call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the conference over to Mr. Peter Dannenbaum. Senior Vice President, Investor Relations. Sir, you may begin.

Thank you, Shirley, and good morning, everyone. Welcome to the second quarter 2025 conference call for Merck and Company Incorporated, Rahway, New Jersey, USA. Speaking on today's call will be Rob Davis, Chairman and Chief Executive Officer, Caroline Litchfield, Chief Financial Officer, and Dr. Dean Lee, President of Research Labs. Before we get started, I'd like to point out that we have items in our GAAP results, such as acquisition-related charges, restructuring costs, and certain other items that we have excluded from our non-GAAP results. There is a reconciliation in our press release. I will also remind you that some of the statements that we make today 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. Our SEC filings, including Item 1A and the 2024 10-K, identify certain risk factors in 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 and Company Incorporated, Robin, New Jersey, USA, undertakes no obligation to publicly update any forward-looking statements. During today's call, a slide presentation will accompany our speaker's prepared remarks. These slides, along with the earnings release, today's prepared remarks and our SEC filings are all posted to the investor relations section of our company's website. With that, I'd like to turn the call over to Rob.

Thank you, Peter. Good morning and thank you for joining today's call. We continue to make meaningful progress in delivering our important medicines and vaccines to patients and customers while advancing our innovative pipeline. Over the past few months, We've shared a steady cadence of updates that highlight our strong clinical momentum, and our growth is increasingly benefiting from new product launches now underway with more to come. We've also taken additional steps to augment our pipeline. Our recently announced acquisition of Verona Pharma is another example of acting decisively when science and value align, and moving with urgency to achieve our business development objectives. I have increasing confidence that our science-driven strategy will continue to generate long-term value for shareholders and for all of our stakeholders. Turning to our second quarter results, we delivered performance in line with our expectations with revenue of $15.8 billion. Results reflect strength across oncology and animal health, as well as increasing contributions from our new product launches with Renrevere achieving $1 billion of cumulative sales in just over a year since approval. We expect to return to growth in the second half of 2025 and remain confident in our outlook for the remainder of the year. I'm proud of the tangible progress we're making in expanding and advancing our research program across key therapeutic areas. We're now conducting more than 80 Phase III studies across a range of therapeutic areas. And we're increasingly seeing the potential we've long spoken about validated with positive clinical trial results, registrational filings, and new product launches. These proof points provide me with growing confidence that we're on track to achieve our ambitions. Moving to some notable recent news. We announced encouraging top-line results from the first two Phase III trials evaluating elicitide. our oral PCSK9 inhibitor for the treatment of hyperlipidemia, and for Winrevere based on the Hyperion study for patients recently diagnosed with PAH. On the regulatory front, the FDA approved and the ACIP recommended Influenzia for the prevention of RSV in infants younger than eight months of age who are born during or entering their first RSV season. we're well prepared to support families ahead of the upcoming season. Additionally, the FDA has accepted our supplemental BLA for Winrevere in PAH and a new drug application for the fixed-dose combination of Duraverine and Islotrevir for the treatment of HIV. At the IAS conference earlier this month, we highlighted new findings from our promising HIV pipeline, and we're excited about MK8527. which has the potential to be the first once-monthly pill for HIV prevention. We also hosted an investor event to showcase our HIV programs and the important commercial opportunity they represent. Our oncology pipeline continues to break new ground. We marked the 10th earlier stage approval for Keytruda and at ASCO presented encouraging data across multiple novel candidates further reinforcing the potential of our portfolio to help even more patients with cancer. Finally, the acquisition of Verona Pharma brings us Otover, a novel first-in-class treatment for chronic obstructive pulmonary disease, or COPD, that complements our growing cardiopulmonary program and reflects our commitment to transformative science in areas of significant unmet need. Upon closing in the fourth quarter, will leverage our commercial capabilities to accelerate Otavira's successful launch and look forward to welcoming the Verona Pharma team to our company. Overall, we are encouraged by our continued progress. Each of these impactful milestones is an important building block as we move toward a more diversified future. As I've said before, our company is entering a period of rapid transformation, which will be marked by meaningful impact on patients and the practice of medicine and we couldn't be more excited about our future. Over the past several years, we've built the largest and most diverse pipeline in our company's recent history. We have over 20 new and potential future growth drivers, including the successful recent launches of WinRiver and Cabvaxiv. We also have numerous novel late phase compounds with potential for significant patient benefit and blockbuster commercial opportunity. Candidates such as Inlicitide, Tulsa T-BARC, SAC TMT, and MK3000, to name a few, represent potentially profound scientific advances, exactly the types of innovations that Merck is known for. We're committed to fully investing behind our pipeline, given the tremendous opportunities we see, and we'll continue to do so with sharp focus and discipline for the benefit of the patients we serve. Today, We announced a multi-year optimization initiative, which will redirect investment and resources from more mature areas of our business to our burgeoning array of new growth drivers, further enable the transformation of our portfolio, and drive our next chapter of productive, innovation-driven growth. Caroline will provide more detail on this in just a moment. In summary, we're leveraging our scientific expertise to deliver the next wave of innovation that can save and improve lives around the world. My confidence in our ability to successfully navigate the Katruta LOE period increases with each new launch, data readout, and business development transaction. I continue to see the LOE as more of a hill than a cliff, and I'm confident in our ability to grow over the long term. I want to thank our talented and dedicated global team for their hard work and commitment to delivering value for patients, shareholders, and for all of our stakeholders. With that, I'll turn the call over to Caroline.