2 unchanged sentences
Below is a summary of significant business development activity thus far in 2024.
+Added: In July 2024, Merck acquired the aqua business of Elanco Animal Health Incorporated (Elanco) for approximately $1.3 billion.
+Added: The Elanco aqua business consists of an innovative portfolio of medicines and vaccines, nutritionals and supplements for aquatic species;
+Added: two related aqua manufacturing facilities in Canada and Vietnam;
+Added: as well as a research facility in Chile.
+Added: The acquisition broadens Animal Health’s aqua portfolio with products such as Clynav, a new generation DNA-based vaccine that protects Atlantic salmon against pancreas disease, and Imvixa, an anti-parasitic sea lice treatment.
+Added: This acquisition also brings a portfolio of water treatment products for warm water production, complementing Animal Health’s warm water vaccine portfolio.
+Added: In addition to these products, the DNA-based vaccine technology that is a part of the business has the potential to accelerate the development of novel vaccines to address the unmet needs of the aqua industry.
+Added: The Company is in the process of determining the preliminary fair value of assets acquired, liabilities assumed and total consideration transferred in this transaction, which will be accounted for as a business combination.
+Added: Also in July 2024, Merck acquired Eyebiotech Limited (EyeBio), a privately held ophthalmology-focused biotechnology company for an upfront payment of $1.3 billion.
+Added: The acquisition agreement also provides for a further $1.7 billion in potential developmental, regulatory and sales-based milestone payments.
+Added: EyeBio’s development work focused on candidates for the prevention and treatment of vision loss associated with retinal vascular leakage, a known risk factor for retinal diseases.
+Added: EyeBio’s lead candidate, Restoret/ MK-3000 (formerly EYE103), is an investigational, potentially first-in-class tetravalent, tri-specific antibody that acts as an agonist of the Wingless-related integration site signaling pathway, which is in clinical development for the treatment of diabetic macular edema and neovascular age-related macular degeneration.
+Added: The transaction will be accounted for as an asset acquisition.
+Added: Merck will record a charge of approximately $1.3 billion to Research and development expenses, or approximately $0.51 per share, in the third quarter of 2024.
+Added: Additionally in July 2024, Merck and Orion Corporation (Orion) announced the mutual exercise of an option to convert the companies’ ongoing co-development and co-commercialization agreement for opevesostat (MK-5684/ODM-208), an investigational cytochrome P450 11A1 (CYP11A1) inhibitor, and other candidates targeting CYP11A1, into an exclusive global license for Merck.
+Added: With the exercise of the option, Merck will assume full responsibility for all past and future development and commercialization expenses associated with the candidates covered by the original agreement.
+Added: In addition, Orion will become eligible to receive developmental, regulatory and sales-based milestone payments, as well as annually tiered royalty payments ranging from a low double-digit rate up to a rate in the low twenties on net sales for any commercialized licensed product.
+Added: Orion will retain responsibility for the manufacture of clinical and commercial supply for Merck.
+Added: No payment was associated with the exercise of the option.
+Added: The exclusive global license is expected to become effective in the third quarter of 2024, but is subject to certain conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary conditions.
In March 2024, Merck acquired Harpoon Therapeutics, Inc.
4 unchanged sentences
The transaction was accounted for as an asset acquisition.
−Removed: Merck recorded net assets of $165 million, as well as a charge of $656 million, or $0.26 per share, to Research and development expenses in the first quarter of 2024 related to the transaction.
+Added: Merck recorded net assets of $165 million, as well as a charge of $656 million, or $0.26 per share, to Research and development expenses in the first six months of 2024 related to the transaction.
There are no future contingent payments associated with the acquisition.
−Removed: In February 2024, Merck entered into a definitive agreement to acquire the aqua business of Elanco Animal Health Incorporated (Elanco) for $1.3 billion in cash.
−Removed: The Elanco aqua business to be acquired consists of an innovative portfolio of medicines and vaccines, nutritionals and supplements for aquatic species;
−Removed: two related aqua manufacturing facilities in Canada and Vietnam;
−Removed: as well as a research facility in Chile.
−Removed: Upon closing, the acquisition will broaden Animal Health’s aqua portfolio with products, such as Clynav, a new generation DNA-based vaccine that protects Atlantic salmon against pancreas disease, and Imvixa, an anti-parasitic sea lice treatment.
−Removed: This acquisition also brings a portfolio of water treatment products for warm water production, complementing Animal Health’s warm water vaccine portfolio.
−Removed: In addition to these products, the DNA-based vaccine technology that is a part of the business has the potential to accelerate the development of novel vaccines to address the unmet needs of the aqua industry.
−Removed: The acquisition is expected to be completed by mid-2024, subject to approvals from regulatory authorities and other customary closing conditions.
−Removed: The transaction will be accounted for as a business combination.
Global efforts toward health care cost containment continue to exert pressure on product pricing and market access worldwide.
4 unchanged sentences
Accordingly, manufacturers may have to pay state Medicaid programs more in rebates than they receive on sales of particular products.
−Removed: As a result of this provision, the Company has recognized increased discounts for Januvia (sitagliptin) and Janumet (sitagliptin and metformin HCl) in the first three months of 2024.
+Added: As a result of this provision, the Company has recognized increased discounts for Januvia (sitagliptin) and Janumet (sitagliptin and metformin HCl) in the first six months of 2024.
In 2022, the U.S.
2 unchanged sentences
Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced that Januvia would be included in the first year of the IRA’s “Drug Price Negotiation Program” (Program).
−Removed: Pursuant to the IRA’s Program, discussions with the government occurred in 2023 and will continue in 2024, with government price-setting becoming effective on January 1, 2026.
+Added: Pursuant to the IRA’s Program, discussions with the government have now concluded, with government price-setting becoming effective on January 1, 2026.
The Company has sued the U.S.
2 unchanged sentences
In several international markets, government-mandated pricing actions have reduced prices of generic and patented drugs.
−Removed: In addition, the Company’s sales performance in the first three months of 2024 was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.
+Added: In addition, the Company’s sales performance in the first six months of 2024
+Added: was negatively affected by other cost-reduction measures taken by governments and other third parties to lower health care costs.
The Company anticipates all of these actions and additional actions in the future will negatively affect sales and profits.
1 unchanged sentence
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
United States $ 7,876 $ 7,018 12 % 12 % $ 15,354 $ 13,676 12 % 12 %
1 unchanged sentence
Total $ 16,112 $ 15,035 7 % 11 % $ 31,887 $ 29,522 8 % 11 %
−Removed: Worldwide sales were $15.8 billion in the first quarter of 2024, an increase of 9% compared with the first quarter of 2023, or 12% excluding the unfavorable effect of foreign exchange.
−Removed: Approximately 2 percentage points of the negative impact of foreign exchange was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
−Removed: Global sales growth in the first quarter of 2024 was primarily due to higher sales in the
−Removed: oncology franchise, largely due to strong growth of Keytruda (pembrolizumab) and Welireg (belzutifan).
−Removed: Higher sales in the vaccines franchise also contributed to revenue growth in the first quarter, primarily attributable to increased combined sales of Gardasil (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) /Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and the ongoing launch of Vaxneuvance (Pneumococcal 15-valent Conjugate Vaccine) for pediatric use, partially offset by lower sales of RotaTeq (Rotavirus Vaccine, Live Oral, Pentavalent) and Pneumovax 23 (pneumococcal vaccine polyvalent).
−Removed: Revenue growth in the first quarter of 2024 was partially offset by lower sales in the diabetes franchise attributable to Januvia and Janumet .
+Added: plus international may not equal total due to rounding.
+Added: Worldwide sales were $16.1 billion in the second quarter of 2024, representing growth of 7% compared with the second quarter of 2023, or 11% excluding the unfavorable effect of foreign exchange.
+Added: Global sales were $31.9 billion in the first six months of 2024, an increase of 8% compared with the same period of 2023, or 11% excluding the unfavorable effect of foreign exchange.
+Added: Approximately 2 percentage points of the negative impact of foreign exchange in both periods was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
+Added: Global sales growth in both periods was primarily due to higher sales in the oncology franchise, largely due to strong growth of Keytruda (pembrolizumab) and Welireg (belzutifan).
+Added: Higher sales in the vaccines franchise also contributed to revenue growth in the second quarter and first six months of 2024, reflecting increased combined sales of Gardasil (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) /Gardasil 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and continued uptake of Vaxneuvance (Pneumococcal 15-valent Conjugate Vaccine) for pediatric use.
+Added: Revenue growth in the second quarter and first six months of 2024 also benefited from higher sales in the cardiovascular franchise largely attributable to the launch of Winrevair (sotatercept-csrk).
+Added: Revenue growth in the second quarter and first six months of 2024 was partially offset by lower sales in the diabetes franchise attributable to Januvia and Janumet , as well as lower sales in the virology franchise largely due to Lagevrio (molnupiravir).
See Note 15 to the condensed consolidated financial statements for details on sales of the Company’s products.
4 unchanged sentences
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Keytruda $ 7,270 $ 6,271 16 % 21 % $ 14,217 $ 12,065 18 % 22 %
8 unchanged sentences
(2) Alliance revenue for Reblozyl represents royalties (see Note 3 to the condensed consolidated financial statements).
−Removed: Keytruda is an anti-PD-1 (programmed death receptor-1) therapy that has been approved in over 35 indications in the U.S., including 17 tumor types and 2 tumor-agnostic indications, and has similarly been approved in markets worldwide for many of these indications.
+Added: Keytruda is an anti-PD-1 (programmed death receptor-1) therapy that has been approved in 40 indications in the U.S., including 17 tumor types and 2 tumor-agnostic indications, and has similarly been approved in markets worldwide for many of these indications.
The Keytruda clinical development program includes studies across a broad range of cancer types.
See “Research and Development Update” below.
−Removed: Global sales of Keytruda grew 20% in the first quarter of 2024, or 24% excluding the unfavorable effect of foreign exchange.
−Removed: Substantially all of the 4% negative impact of foreign exchange was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
−Removed: Keytruda sales growth in the first quarter 2024 was primarily driven by higher demand reflecting the launch of multiple new indications globally coupled with continued uptake in existing indications.
−Removed: Sales growth in the U.S.
−Removed: reflects increased uptake across earlier-stage indications including in certain types of non-small-cell lung cancer (NSCLC), high-risk early-stage triple-negative breast cancer (TNBC), as well as certain types of renal cell carcinoma (RCC), and higher demand across the multiple approved metastatic indications, in particular for the treatment of certain types of urothelial, endometrial, microsatellite instability-high (MSI-H) and renal cell cancers, as well as higher pricing.
−Removed: Keytruda sales growth in international markets reflects higher demand predominately for the TNBC and RCC earlier-stage indications, as well as uptake in head and neck squamous cell carcinoma and RCC metastatic indications, particularly in Europe and Latin America.
−Removed: Keytruda received the following regulatory approvals thus far in 2024.
+Added: Global sales of Keytruda grew 16% in the second quarter of 2024 and rose 18% in the first six months of 2024, or 21% and 22%, respectively, excluding the unfavorable effect of foreign exchange.
+Added: Approximately 4 percentage points of the negative impact of foreign exchange in both periods was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
+Added: Keytruda sales growth in the U.S.
+Added: reflects increased uptake across earlier-stage indications, including in certain types of non-small-cell lung cancer (NSCLC), high-risk early-stage triple-negative breast cancer (TNBC), and certain types of renal cell carcinoma (RCC), as well as higher demand across the multiple approved metastatic indications, in particular for the treatment of certain types of urothelial, endometrial, microsatellite instability-high (MSI-H) and renal cell cancers, as well as higher pricing.
+Added: Keytruda sales growth in international markets reflects higher demand predominately for the TNBC, melanoma and RCC earlier-stage indications, as well as uptake in cervical, renal and gastric cancer metastatic indications, particularly in Europe and Latin America.
+Added: Keytruda has received the following regulatory approvals thus far in 2024.
Date Approval
3 unchanged sentences
The conversion from an accelerated to full (regular) approval is based on the KEYNOTE-394 trial.
−Removed: February 2024 China’s National Medical Products Administration approval in combination with gemcitabine and cisplatin for the first-line treatment of patients with locally advanced or metastatic biliary tract carcinoma, based on the KEYNOTE-966 trial.
+Added: February 2024 China’s National Medical Products Administration (NMPA) approval in combination with gemcitabine and cisplatin for the first-line treatment of patients with locally advanced or metastatic biliary tract carcinoma, based on the KEYNOTE-966 trial.
European Commission (EC) approval in combination with platinum-containing chemotherapy as neoadjuvant treatment, then continued as monotherapy as adjuvant treatment, for resectable NSCLC at high risk of recurrence in adults, based on the KEYNOTE-671 trial.
+Added: Japan’s Ministry of Health, Labor and Welfare (MHLW) approval in combination with fluoropyrimidine- and platinum-containing chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic gastric or gastroesophageal junction (GEJ) adenocarcinoma, based on the KEYNOTE-859 trial.
+Added: Japan’s MHLW approval in combination with standard of care chemotherapy (gemcitabine and cisplatin) for the treatment of patients with locally advanced unresectable or metastatic biliary tract cancer, based on the KEYNOTE-966 trial.
+Added: FDA approval in combination with carboplatin and paclitaxel, followed by Keytruda as a single agent, for the treatment of adult patients with primary advanced or recurrent endometrial carcinoma, based on the NRG-GY018 trial, also known as KEYNOTE-868.
+Added: China’s NMPA approval in combination with trastuzumab, fluoropyrimidine- and platinum-containing chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic human epidermal growth factor receptor 2 (HER2) positive gastric or GEJ adenocarcinoma whose tumors express PD-L1 as determined by a fully validated test, based on the KEYNOTE-811 trial.
The Company is a party to certain third-party license agreements pursuant to which the Company pays royalties on sales of Keytruda .
1 unchanged sentence
this royalty declined to 2.5% in 2024 and will continue through 2026, terminating thereafter.
−Removed: The Company pays an additional 2% royalty on worldwide sales of Keytruda to another third party, the
−Removed: termination date of which varies by country;
+Added: The Company pays an additional 2% royalty on worldwide sales of Keytruda to another third party, the termination date of which varies by country;
this royalty will expire in the U.S.
3 unchanged sentences
Lynparza is approved for the treatment of certain types of advanced or recurrent ovarian, early or metastatic breast, metastatic pancreatic and metastatic castration-resistant prostate cancers.
−Removed: Alliance revenue related to Lynparza increased 6% in the first quarter of 2024 primarily driven by higher demand in certain international markets, particularly in Latin America.
+Added: Alliance revenue related to Lynparza increased 2% in the second quarter of 2024 primarily driven by higher demand in the U.S.
+Added: and certain international markets, particularly in China and Europe.
+Added: Alliance revenue related to Lynparza grew 4% in the first six months of 2024 primarily due to higher demand in certain international markets, particularly in Latin America, China and Europe.
Lenvima (lenvatinib) is an oral receptor tyrosine kinase inhibitor being developed as part of a collaboration with Eisai Co., Ltd.
1 unchanged sentence
Lenvima is approved for the treatment of certain types of thyroid cancer, RCC, HCC, in combination with everolimus for certain patients with advanced RCC, and in combination with Keytruda for certain patients with advanced endometrial carcinoma or advanced RCC.
−Removed: Alliance revenue related to Lenvima grew 10% in the first quarter of 2024 primarily reflecting higher demand in the U.S.
−Removed: Sales of Welireg , for the treatment of adult patients with certain von Hippel-Lindau (VHL) disease-associated tumors and certain adult patients with previously treated advanced RCC, more than doubled in the first quarter of 2024 due to higher demand in the U.S.
−Removed: for the treatment of VHL disease-associated tumors and uptake in a supplemental indication approved by the FDA in December 2023 for previously treated advanced RCC.
−Removed: Welireg is under review in the European Union (EU) for the treatment of previously treated advanced RCC based on the LITESPARK-005 clinical trial and for the treatment of VHL disease based on the LITESPARK-004 clinical trial.
+Added: Alliance revenue related to Lenvima grew 3% and 6% in the second quarter and first six months of 2024, respectively, primarily reflecting higher demand in the U.S.
+Added: Sales of Welireg , for the treatment of adult patients with certain von Hippel-Lindau (VHL) disease-associated tumors and certain adult patients with previously treated advanced RCC, more than doubled in both the second quarter and first six months of 2024.
+Added: Sales growth in both periods was primarily due to higher demand in the U.S.
+Added: largely attributable to the launch of a new indication for previously treated advanced RCC following approval by the FDA in December 2023.
+Added: Welireg is under review in the European Union (EU) and Japan for the treatment of previously treated advanced RCC based on the LITESPARK-005 clinical trial and in the EU for the treatment of VHL disease based on the LITESPARK-004 clinical trial.
Reblozyl (luspatercept-aamt) is a first-in-class erythroid maturation recombinant fusion protein that is being commercialized through a global collaboration with Bristol-Myers Squibb Company (BMS) (see Note 3 to the condensed consolidated financial statements).
Reblozyl is approved for the treatment of anemia in certain rare blood disorders.
−Removed: Alliance revenue related to this collaboration (consisting of royalties) increased 66% in the first quarter of 2024 due to strong underlying sales performance.
+Added: Alliance revenue related to this collaboration (consisting of royalties) increased 92% and 80% in the second quarter and first six months of 2024, respectively, due to strong underlying sales performance.
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Gardasil/Gardasil 9
6 unchanged sentences
Pneumovax 23 59 92 (36) % (32) % 120 188 (36) % (32) %
−Removed: Combined worldwide sales of Gardasil and Gardasil 9, vaccines to help prevent certain cancers and other diseases caused by certain types of human papillomavirus (HPV), grew 14% in the first quarter of 2024 primarily due to strong demand, particularly in China, which also benefited from the timing of shipments, as well as public sector buying patterns in the U.S., and higher pricing.
+Added: Combined worldwide sales of Gardasil and Gardasil 9, vaccines to help prevent certain cancers and other diseases caused by certain types of human papillomavirus (HPV), grew 1% in the second quarter of 2024 primarily driven by higher sales in the U.S.
+Added: due to higher pricing, demand and public sector buying patterns, as well as higher demand in several ex-U.S.
+Added: Sales growth of Gardasil/Gardasil 9 in the second quarter of 2024 was largely offset by lower sales in China due to the timing of shipments compared with prior year.
+Added: Combined worldwide sales of Gardasil and Gardasil 9 grew 7% in the first six months of 2024 primarily due to higher global demand, as well as public sector buying patterns in the U.S., and higher pricing.
+Added: In the second quarter of 2024, the Company observed a significant decline in shipments from its distributor and commercialization partner in China, Zhifei Biological Products Co., Ltd.
+Added: (Zhifei), into the points of vaccination compared with prior quarters, resulting in above normal inventory levels at Zhifei.
+Added: If shipments from Zhifei into the points of vaccination do not increase, it is likely that the Company will ship less than its full year 2024 contracted doses by the end of 2024.
The Company is a party to certain third-party license agreements pursuant to which the Company pays royalties on sales of Gardasil/Gardasil 9.
3 unchanged sentences
The royalty expenses are included in Cost of sales .
−Removed: Global sales of ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combination vaccine to help protect against measles, mumps, rubella and varicella, grew 8% in the first quarter of 2024 primarily reflecting higher pricing in the U.S.
−Removed: and higher demand in certain ex-U.S.
−Removed: Worldwide sales of M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella, were nearly flat in the first quarter of 2024.
−Removed: Global sales of Varivax (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox (varicella), increased 11% in the first quarter of 2024 primarily attributable to higher pricing in the U.S.
−Removed: and higher sales in Latin America due in part to the timing of government tenders.
−Removed: Worldwide sales of Vaxneuvance , a vaccine to help protect against invasive pneumococcal disease, more than doubled in the first quarter of 2024 primarily reflecting continued uptake in the pediatric indication in the U.S.
−Removed: and Europe, as well as new market launches.
−Removed: Sales growth in the U.S.
−Removed: also reflects the beneficial impact of public sector buying patterns.
−Removed: Global sales of RotaTeq , a vaccine to help protect against rotavirus gastroenteritis in infants and children, declined 27% in the first quarter of 2024 primarily due to lower sales in China reflecting first quarter 2023 inventory stocking, as well as lower sales in the U.S.
−Removed: due to public sector buying patterns.
−Removed: Worldwide sales of Pneumovax 23, a vaccine to help prevent pneumococcal disease, declined 36% in the first quarter of 2024 largely due to lower demand in the U.S.
−Removed: as the market has shifted toward newer adult pneumococcal conjugate vaccines following changes in the recommendations of the U.S.
−Removed: Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices in 2021.
+Added: Global sales of ProQuad (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a pediatric combination vaccine to help protect against measles, mumps, rubella and varicella, grew 7% and 8% in the second quarter and first six months of 2024, respectively, primarily reflecting higher pricing and demand in the U.S.
+Added: Worldwide sales of M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella, grew 8% and 5% in the second quarter and first six months of 2024, respectively, largely reflecting higher demand in several ex-U.S.
+Added: Global sales of Varivax (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox (varicella), increased 4% and 7% in the second quarter and first six months of 2024, respectively, primarily attributable to higher pricing in the U.S.
+Added: Sales growth in the second quarter of 2024 was partially offset by the timing of sales in Latin America.
+Added: Worldwide sales of Vaxneuvance , a vaccine to help protect against invasive pneumococcal disease, grew 13% in the second quarter of 2024 primarily reflecting continued uptake following launches in the pediatric indication in Japan and Europe, partially offset by lower sales in the U.S.
+Added: due to lower demand and public sector buying patterns.
+Added: Worldwide sales of Vaxneuvance grew 49% in the first six months of 2024 primarily reflecting higher demand in Europe and Japan, as well as the beneficial impact of public sector buying patterns in the U.S.
+Added: Global sales of RotaTeq (Rotavirus Vaccine, Live Oral, Pentavalent), a vaccine to help protect against rotavirus gastroenteritis in infants and children, grew 25% in the second quarter of 2024 largely due to the timing of sales in China, as well as higher sales in the U.S.
+Added: reflecting a benefit from public sector buying patterns that was partially offset by lower demand.
+Added: Worldwide sales of RotaTeq declined 11% first six months of 2024 primarily due to lower sales in China reflecting first quarter 2023 inventory stocking, as well as lower sales in the U.S.
+Added: due to lower demand and public sector buying patterns, partially offset by higher pricing.
+Added: Worldwide sales of Pneumovax 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, declined 36% in both the second quarter and first six months of 2024 driven by lower demand in most markets, particularly in the U.S.
+Added: as the market has shifted toward newer adult pneumococcal conjugate vaccines.
+Added: In June 2024, the FDA approved Capvaxive (Pneumococcal 21-valent Conjugate Vaccine) for the prevention of invasive pneumococcal disease and pneumococcal pneumonia in individuals 18 years of age and older.
+Added: The approval was supported by results from multiple Phase 3 clinical studies evaluating Capvaxive in both vaccine-naïve and vaccine-experienced adult patient populations, including STRIDE-3, STRIDE-4, STRIDE-5 and STRIDE-6.
+Added: In June 2024, the U.S.
+Added: Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices unanimously voted to recommend Capvaxive as an option for certain adults for pneumococcal vaccination.
+Added: These provisional recommendations were adopted by the CDC director and are now official.
+Added: Merck is a party to certain third-party license agreements pursuant to which the Company will pay royalties on sales of Capvaxive .
+Added: Under the more significant of these agreements, Merck will pay a royalty of 7.25% on net sales of Capvaxive through 2026;
+Added: this royalty will decline to 2.5% on net sales from 2027 through 2035.
Hospital Acute Care
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Bridion $ 455 $ 502 (9) % (8) % $ 895 $ 989 (9) % (8) %
Prevymis 188 143 31 % 35 % 362 273 33 % 37 %
−Removed: Worldwide sales of Bridion (sugammadex), for the reversal of two types of neuromuscular blocking agents used during surgery, declined 10% in the first quarter of 2024 driven by lower demand in certain ex-U.S.
−Removed: markets due to generic competition, particularly in the EU, partially offset by higher demand in the U.S.
+Added: Worldwide sales of Bridion (sugammadex), for the reversal of two types of neuromuscular blocking agents used during surgery, declined 9% in both the second quarter and first six months of 2024 primarily driven by lower demand in certain ex-U.S.
+Added: markets due to generic competition, particularly in the EU and the Asia Pacific region, partially offset by higher demand in the U.S.
The patent that provided market exclusivity for Bridion in the EU expired in July 2023.
2 unchanged sentences
the Company anticipates sales of Bridion in Japan will decline in future periods.
−Removed: Worldwide sales of Prevymis (letermovir), a medicine for prophylaxis (prevention) of cytomegalovirus (CMV) infection and disease in certain high risk adult recipients of an allogenic hematopoietic stem cell transplant and for prophylaxis of CMV disease in certain high risk adult recipients of a kidney transplant, grew 35% in the first quarter of 2024 largely due to higher global demand, particularly in the U.S.
+Added: Worldwide sales of Prevymis (letermovir), a medicine for prophylaxis (prevention) of cytomegalovirus (CMV) infection and disease in certain high risk adult recipients of an allogenic hematopoietic stem cell transplant and for prophylaxis of CMV disease in certain high risk adult recipients of a kidney transplant, grew 31% and 33% in the second quarter and first six months of 2024, respectively, largely due to higher global demand, particularly in the U.S., China and Europe.
Cardiovascular
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
−Removed: Alliance Revenue - Adempas/Verquvo (1)
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
+Added: Alliance Revenue - Adempas/
$ 106 $ 68 56 % 56 % $ 203 $ 167 22 % 22 %
Adempas 72 65 11 % 15 % 142 125 14 % 17 %
+Added: 70 — — — 70 — — —
(1) Alliance revenue represents Merck’s share of profits from sales in Bayer’s marketing territories, which are product sales net of cost of sales and commercialization costs (see Note 3 to the condensed consolidated financial statements).
2 unchanged sentences
Verquvo is approved to reduce the risk of cardiovascular death and heart failure hospitalization following a hospitalization for heart failure or need for outpatient intravenous diuretics in adults with symptomatic chronic heart failure and reduced ejection fraction.
−Removed: Alliance revenue from the collaboration in the first quarter of 2024 was nearly flat compared with the corresponding prior year period.
+Added: Alliance revenue from the collaboration grew 56% and 22% in the second quarter and first six months of 2024, respectively, due to higher demand in Bayer’s marketing territories.
Revenue also includes sales of Adempas and Verquvo in Merck’s marketing territories.
−Removed: Sales of Adempas in Merck’s marketing territories grew 18% in the first quarter of 2024 primarily due to higher demand.
−Removed: In March 2024, the FDA approved Winrevair (sotatercept-csrk) for the treatment of adults with PAH (World Health Organization [WHO] Group 1) to increase exercise capacity, improve WHO functional class, and reduce the risk of clinical worsening events.
+Added: Sales of Adempas in Merck’s marketing territories grew 11% and 14% in the second quarter and first six months of 2024, respectively, primarily due to higher demand.
+Added: In March 2024, the FDA approved Winrevair for the treatment of adults with PAH (World Health Organization [WHO] Group 1) to increase exercise capacity, improve WHO functional class, and reduce the risk of clinical worsening events.
The approval is based on the STELLAR trial.
−Removed: Winrevair is the subject of a licensing agreement with Bristol-Myers Squibb Company (BMS) and Merck will pay 22% royalties on sales of Winrevair in the PH field to BMS.
+Added: Additional worldwide regulatory filings for Winrevair are underway.
+Added: Winrevair is the subject of a licensing agreement with BMS pursuant to which Merck pays a 22% royalty on sales of Winrevair to BMS.
+Added: Merck estimates approximately 40% of Winrevair sales in the second quarter 2024 were attributable to doses administered to patients, with the remainder due to distributors building inventory in support of increasing demand.
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Lagevrio $ 110 $ 203 (46) % (42) % $ 460 $ 595 (23) % (18) %
Lagevrio is an investigational oral antiviral COVID-19 medicine being developed in a collaboration with Ridgeback Biotherapeutics LP (Ridgeback) (see Note 3 to the condensed consolidated financial statements).
−Removed: Sales of Lagevrio declined 11% in the first quarter of 2024 primarily due to lower demand in certain markets in the Asia Pacific region, partially offset by sales in the U.S.
+Added: Sales of Lagevrio declined 46% and 23% in the second quarter and first six months of 2024, respectively, primarily due to lower demand and pricing in certain markets in the Asia Pacific region, partially offset by uptake from commercial distribution in the U.S.
and higher demand in Japan.
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
$ 172 $ 180 (4) % (2) % $ 356 $ 359 (1) % (1) %
3 unchanged sentences
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Januvia/Janumet $ 629 $ 864 (27) % (23) % $ 1,299 $ 1,744 (26) % (22) %
−Removed: Worldwide combined sales of Januvia and Janumet , medicines that help lower blood sugar levels in adults with type 2 diabetes, declined 24% in the first quarter of 2024 primarily due to lower sales in the U.S., largely reflecting lower pricing and lower demand due to competitive pressures, as well as the ongoing impact of the loss of exclusivity in most markets in Europe and the Asia Pacific region, as well as in Canada.
+Added: Worldwide combined sales of Januvia and Janumet , medicines that help lower blood sugar levels in adults with type 2 diabetes, declined 27% and 26% in the second quarter and first six months of 2024, respectively, primarily due to lower sales in the U.S., largely reflecting lower pricing and lower demand due to competitive pressures, as well as the ongoing impact of the loss of exclusivity in most markets in Europe and the Asia Pacific region, as well as in Canada.
The American Rescue Plan Act enacted in the U.S.
1 unchanged sentence
Accordingly, manufacturers may have to pay state Medicaid programs more in rebates than they receive on sales of particular products.
−Removed: As a result of this provision, the Company has recognized increased discounts for Januvia and Janumet in the first quarter of 2024.
+Added: As a result of this provision, the Company has recognized increased discounts for Januvia and Janumet in the first six months of 2024.
In A ugust 2023, the U.S.
Department of HHS, through the CMS, announced that Januvia would be included in the first year of the IRA’s Program.
−Removed: Pursuant to the IRA’s Program, discussions with the government occurred in 2023 and will continue in 2024, with government price-setting becoming effective on January 1, 2026.
+Added: Pursuant to the IRA’s Program, discussions with the government have now concluded, with government price-setting becoming effective on January 1, 2026.
The Company has sued the U.S.
12 unchanged sentences
Three Months Ended
−Removed: March 31, % Change
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, % Change
+Added: Exchange Six Months Ended
+Added: June 30, % Change
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Livestock $ 837 $ 807 4 % 11 % $ 1,686 $ 1,656 2 % 7 %
1 unchanged sentence
$ 1,482 $ 1,456 2 % 6 % $ 2,993 $ 2,947 2 % 5 %
−Removed: Animal Health sales grew 1% in the first quarter of 2024, or 4% excluding the unfavorable impact of foreign exchange.
−Removed: Approximately 3 percentage points of the negative impact of foreign exchange was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
−Removed: Sales of livestock products were nearly flat in the first quarter of 2024 primarily due to higher pricing, as well as increased demand for swine and poultry products, partially offset by lower demand for ruminant products.
−Removed: Sales of companion animal products grew 3% in the first quarter of 2024 due to higher pricing.
−Removed: Sales of Bravecto (fluralaner), a line of oral and topical parasitic control products, were $332 million for the first quarter of 2024, representing growth of 6% compared with the corresponding prior year period, or 7% excluding the unfavorable effect of foreign exchange.
−Removed: In February 2024, Merck entered into a definitive agreement to acquire the aqua business of Elanco for $1.3 billion in cash.
+Added: Animal Health sales grew 2% in the second quarter of 2024, or 6% excluding the unfavorable effect of foreign exchange, and increased 2% in the first six months of 2024, or 5% excluding the unfavorable effect of foreign exchange.
+Added: Approximately 3 percentage points of the negative impact of foreign exchange in both periods was due to the devaluation of the Argentine peso, which was largely offset by inflation-related price increases consistent with practice in that market.
+Added: Sales of livestock products grew 4% and 2% in the second quarter and first six months of 2024, respectively, primarily due to higher pricing, as well as increased demand for poultry products.
+Added: Higher demand for ruminant products also contributed to sales growth in the second quarter of 2024.
+Added: Sales of companion animal products were relatively flat in the second quarter of 2024.
+Added: Sales of companion animal products grew 1% in the first six months of 2024 due to higher pricing, largely offset by lower volumes reflecting a reduction in distributor inventory.
+Added: Sales of Bravecto (fluralaner), a line of oral, topical and injectable parasitic control products, were $331 million for the second quarter of 2024, representing growth of 2% compared with the second quarter of 2023, or 3% excluding the unfavorable effect of foreign exchange.
+Added: Sales of Bravecto were $663 million for the first six months of 2024, representing growth of 4% compared with the corresponding prior year period, or 5% excluding the unfavorable effect of foreign exchange.
+Added: In July 2024, Merck acquired the aqua business of Elanco for $1.3 billion.
See “Business Development Transactions” above for additional information related to this transaction.
1 unchanged sentence
Three Months Ended
−Removed: ($ in millions) 2024 2023 % Change
+Added: June 30, Six Months Ended
+Added: ($ in millions) 2024 2023 % Change 2024 2023 % Change
Cost of sales $ 3,745 $ 4,024 (7) % $ 7,285 $ 7,951 (8) %
5 unchanged sentences
Cost of Sales
−Removed: Cost of sales declined 10% in the first quarter of 2024.
−Removed: Cost of sales includes the amortization of intangible assets recorded in connection with acquisitions, collaborations, and licensing arrangements, which totaled $462 million and $532 million in the first quarter of 2024 and 2023, respectively.
−Removed: Amortization expense in the first quarter of 2023 includes $72 million of cumulative catch-up amortization related to Merck’s collaboration with Eisai.
+Added: Cost of s ales declined 7% and 8% in the second quarter and first six months of 2024, respectively.
+Added: Cost of s ales includes the amortization of intangible assets recorded in connection with acquisitions, collaborations, and licensing arrangements, which totaled $603 million and $468 million in the second quarter of 2024 and 2023, respectively, and $1.1 billion and $1.0 billion in the first six months of 2024 and 2023, respectively.
+Added: Amortization expense in the first six months of 2023 includes $72 million of cumulative catch-up amortization related to Merck’s collaboration with Eisai.
See Note 3 to the condensed consolidated financial statements for more information on Merck’s collaborative arrangements.
−Removed: Also included in cost of sales are expenses associated with restructuring activities, which amounted to $116 million and $29 million in the first quarter of 2024 and 2023, respectively, primarily reflecting accelerated depreciation and asset write-offs related to the planned sale or closure of manufacturing facilities.
+Added: Also included in Cost of s ales are expenses associated with restructuring activities, which amounted to $66 million and $32 million in the second quarter of 2024 and 2023, respectively, and $182 million and $61 million in the first six months of 2024 and 2023, respectively, primarily reflecting accelerated depreciation and asset write-offs related to the planned sale or closure of manufacturing facilities.
Separation costs associated with manufacturing-related headcount reductions have been incurred and are reflected in Restructuring costs as discussed below.
−Removed: Gross margin was 77.6% in the first quarter of 2024 compared with 72.9% in the first quarter of 2023.
−Removed: The gross margin improvement was primarily due to the favorable effects of product mix (including lower royalty rates related to Keytruda and Gardasil/Gardasil 9 sales), foreign exchange and lower amortization of intangible assets, partially offset by higher restructuring costs and inventory write-offs.
+Added: Gross margin was 76.8% in the second quarter of 2024 compared with 73.2% in the second quarter of 2023.
+Added: Gross margin was 77.2% in the first six months of 2024 compared with 73.1% in the first six months of 2023.
+Added: The gross margin improvement in both periods was primarily due to the favorable effect of product mix (including lower royalty rates related to Keytruda and Gardasil/Gardasil 9 sales), partially offset by higher restructuring costs and amortization of intangible assets.
Selling, General and Administrative
−Removed: Selling, general and administrative (SG&A) expenses were nearly flat in the first quarter of 2024 primarily due to higher administrative costs, largely offset by lower promotional spending, reflecting the prioritization of spending on key growth products, and the favorable effect of foreign exchange.
+Added: Selling, general and administrative (SG&A) expenses increased 1% in the second quarter of 2024 primarily due to higher administrative and promotional costs, largely offset by the favorable effect of foreign exchange and lower restructuring costs.
+Added: SG&A expenses rose 1% in the first six months of 2024 primarily due to higher administrative costs, largely offset by the favorable effect of foreign exchange, lower promotional spending, reflecting the prioritization of spending on key growth products, as well as lower restructuring costs.
Research and Development
−Removed: Research and development (R&D) expenses declined 7% in the first quarter of 2024 primarily due to lower charges for business development transactions, which included a $656 million charge for the acquisition of Harpoon in the first quarter of 2024, compared with charges of $1.2 billion for the acquisition of Imago and $175 million for a license and collaboration agreement with Kelun-Biotech in the first quarter of 2023.
−Removed: The decline was partially offset by higher compensation and benefit costs, increased clinical development spending, and higher investments in discovery research and early drug development in the first quarter of 2024.
−Removed: R&D expenses are comprised of the costs directly incurred by Merck Research Laboratories (MRL), the Company’s research and development division that focuses on human health-related activities, which were $2.4 billion and $2.1 billion for the first quarter of 2024 and 2023, respectively.
−Removed: Also included in R&D expenses are Animal Health research costs, upfront payments for collaboration and licensing agreements, charges for transactions accounted for as asset acquisitions (including the charges for the Harpoon and Imago acquisitions as noted above), and costs incurred by other divisions in support of R&D activities, including depreciation, production and general and administrative, which in the aggregate were approximately $1.6 billion and $2.2 billion for the first quarter of 2024 and 2023, respectively.
+Added: Research and development (R&D) expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023.
+Added: The decline was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus.
+Added: R&D expenses were $7.5 billion in the first six months 2024 compared with $17.6 billion in the first six months of 2023.
+Added: The decline was primarily due to lower charges for business development transactions, which included a $656 million charge for the acquisition of Harpoon in the first six months of 2024, compared with charges of $10.2 billion for the acquisition of Prometheus, $1.2 billion for the acquisition of Imago and $175 million for a license and collaboration agreement with Kelun-Biotech in the first six months of 2023.
+Added: The declines in R&D expenses for both the second quarter and first six months of 2024 were partially offset by increased clinical development spending, as well as higher compensation and benefit costs in 2024.
+Added: R&D expenses are comprised of the costs directly incurred by Merck Research Laboratories (MRL), the Company’s research and development division that focuses on human health-related activities, which were $2.5 billion and $2.3 billion for the second quarter of 2024 and 2023, respectively, and $4.9 billion and $4.3 billion for the first six months of 2024 and 2023, respectively.
+Added: Also included in R&D expenses are Animal Health research costs, upfront payments for collaboration and licensing agreements, charges for transactions accounted for as asset acquisitions (including the charges for the Harpoon, Prometheus and Imago acquisitions as noted above), and costs incurred by other divisions in support of R&D activities, including depreciation, production and general and administrative, which in the aggregate were approximately $955 million and $11.1 billion for the second quarter of 2024 and 2023, respectively, and $2.5 billion and $13.3 billion for the first six months of 2024 and 2023, respectively.
Restructuring Costs
−Removed: In January 2024, the Company approved a new restructuring program (2024 Restructuring Program) intended to continue the optimization of the Company’s Human Health global manufacturing network as the future pipeline shifts to new modalities and also optimize the Animal Health global manufacturing network to improve supply reliability and increase efficiency.
+Added: In January 2024, the Company approved a new restructuring program (2024 Restructuring Program) intended to continue the optimization of the Company’s Human Health global manufacturing network as the future pipeline shifts to new
+Added: modalities and also optimize the Animal Health global manufacturing network to improve supply reliability and increase efficiency.
The actions contemplated under the 2024 Restructuring Program are expected to be substantially completed by the end of 2031, with the cumulative pretax costs to be incurred by the Company to implement the program estimated to be approximately $4.0 billion.
3 unchanged sentences
The Company anticipates the actions under the 2024 Restructuring Program will result in cumulative annual net cost savings of approximately $750 million by the end of 2031.
−Removed: In 2019, Merck approved a global restructuring program (2019 Restructuring Program) as part of a worldwide initiative focused on optimizing the Company’s manufacturing and supply network, as well as reducing its global real estate
+Added: In 2019, Merck approved a global restructuring program (2019 Restructuring Program) as part of a worldwide initiative focused on optimizing the Company’s manufacturing and supply network, as well as reducing its global real estate footprint.
The actions under the 2019 Restructuring Program were substantially complete at the end of 2023 and, as of January 1, 2024, any remaining activities are now being accounted for as part of the 2024 Restructuring Program.
−Removed: Restructuring costs, primarily representing separation and other costs associated with these restructuring activities, were $123 million and $67 million for the first quarter of 2024 and 2023, respectively.
+Added: Restructuring costs , primarily representing separation and other costs associated with these restructuring activities, were $80 million and $151 million for the second quarter of 2024 and 2023, respectively, and $202 million and $218 million for the first six months of 2024 and 2023, respectively.
Separation costs incurred were associated with actual headcount reductions, as well as estimated expenses under existing severance programs for involuntary headcount reductions that were probable and could be reasonably estimated.
2 unchanged sentences
Additional costs associated with the Company’s restructuring activities are included in Cost of sales , Selling, general and administrative expenses and Research and development costs.
−Removed: The Company recorded aggregate pretax costs of $246 million and $97 million in the first quarter of 2024 and 2023, respectively, related to restructuring program activities (see Note 4 to the condensed consolidated financial statements).
+Added: The Company recorded aggregate pretax costs of $177 million and $236 million in the second quarter of 2024 and 2023, respectively, and $422 million and $333 million for the first six months of 2024 and 2023, respectively, related to restructuring program activities (see Note 4 to the condensed consolidated financial statements).
Other (Income) Expense, Net
−Removed: Other (income) expense, net, was $33 million of income in the first quarter of 2024 compared with $89 million of expense in the first quarter of 2023.
−Removed: The favorability was primarily due to a $572.5 million charge in 2023 related to settlements with certain plaintiffs in the Zetia antitrust litigation (see Note 7 to the condensed consolidated financial statements), partially offset by lower income from investments in equity securities and higher interest expense in 2024.
+Added: Other (income) expense, net was $42 million of expense in the second quarter of 2024 compared with $172 million of expense in the second quarter of 2023 primarily due to net income from investments in equity securities in 2024 compared with net losses in 2023, partially offset by higher net interest expense in 2024.
+Added: Other (income) expense, net was $12 million of expense in the first six months of 2024 compared with $259 million of expense in the first six months of 2023.
+Added: The favorability was primarily due to a $572.5 million charge in 2023 related to settlements with certain plaintiffs in the Zetia antitrust litigation, partially offset by higher net interest expense and lower income from investments in equity securities in 2024.
For details on the components of Other (income) expense, net see Note 11 to the condensed consolidated financial statements.
1 unchanged sentence
Three Months Ended
+Added: June 30, Six Months Ended
($ in millions) 2024 2023 2024 2023
2 unchanged sentences
Other (5,702) (15,656) (11,493) (21,710)
−Removed: Income Before Taxes $ 5,670 $ 3,650
+Added: Income (Loss) Before Taxes
+Added: $ 6,006 $ (5,335) $ 11,675 $ (1,685)
Pharmaceutical segment profits are comprised of segment sales less standard costs, as well as SG&A expenses directly incurred by the segment.
6 unchanged sentences
Also included in “Other” are miscellaneous corporate profits (losses), as well as operating profits (losses) related to third-party manufacturing arrangements.
−Removed: Pharmaceutical segment profits grew 19% in the first quarter of 2024 primarily due to higher sales, partially offset by higher administrative and promotional costs, as well as the unfavorable effect of foreign exchange.
−Removed: Animal Health segment profits declined 2% in the first quarter of 2024 reflecting higher production costs, increased administrative and promotional costs, as well as the unfavorable effect of foreign exchange.
+Added: Pharmaceutical segment profits grew 14% and 16% in the second quarter and first six months of 2024, respectively, primarily due to higher sales, partially offset by higher administrative and promotional costs, as well as the unfavorable effect of
+Added: foreign exchange.
+Added: Animal Health segment profits rose 9% and 3% in the second quarter and first six months of 2024, respectively, primarily due to higher sales, partially offset by increased promotional costs, as well as the unfavorable effect of foreign exchange.
Taxes on Income
−Removed: The effective income tax rate of 15.9% for the first quarter of 2024 reflects a 1.6 percentage point unfavorable discrete impact of a charge for the acquisition of Harpoon for which no tax benefit was recognized.
−Removed: The effective income tax rate of 22.6% for the first quarter of 2023 reflects a 5.5 percentage point unfavorable discrete impact of a charge for the acquisition of Imago for which no tax benefit was recognized.
+Added: The effective income tax rates were 9.1% and 12.4% for the second quarter and first six months of 2024, respectively.
+Added: The effective income tax rates in the second quarter and first six months of 2024 reflect a 4.3 percentage point favorable impact and a 2.2 percentage point favorable impact, respectively, due to a $259 million reduction in reserves for unrecognized income tax benefits resulting from the expiration in June 2024 of the statute of limitations for assessments related to the 2019 federal tax return year.
+Added: The effective income tax rate for the first six months of 2024 also reflects a 0.7 percentage point unfavorable discrete impact of a charge for the acquisition of Harpoon for which no tax benefit was recognized.
+Added: The income tax provision of $637 million and $1.5 billion for the second quarter and first six months of 2023, respectively, on pretax losses of $5.3 billion and $1.7 billion, respectively, resulted in effective income tax rates of (11.9)% and (86.8)%, respectively.
+Added: The second quarter 2023 effective income tax rate includes the impact of a charge for the acquisition of Prometheus for which no tax benefit was recognized, which unfavorably affected the tax rate by 25.1 percentage points, as well as the favorable impact of net unrealized losses from investments in equity securities, which were taxed at the U.S.
+Added: The effective income tax rate for the first six months of 2023 includes a 101.9 percentage point combined unfavorable impact of charges for the acquisitions of Prometheus and Imago for which no tax benefits were recognized, as well as higher foreign taxes, the impact of the R&D capitalization provision of the Tax Cuts and Jobs Act of 2017 (TCJA) on the Company’s U.S.
+Added: global intangible low-taxed income inclusion, and net unrealized gains from investments in equity securities, which were taxed at the U.S.
+Added: tax rate, partially offset by higher foreign tax credits.
While many jurisdictions in which Merck operates have adopted the global minimum tax provision of the Organisation for Economic Co-operation and Development (OECD) Pillar 2, effective for tax years beginning in January 2024, the Company anticipates there will be a reduced impact to its 2024 tax rate due to the accounting for the tax effects of intercompany transactions.
The Company expects the impact of the global minimum tax will increase its tax rate to a greater extent in 2025 and thereafter.
−Removed: Also, in the event that the provision of the Tax Cuts and Jobs Act of 2017 requiring capitalization and amortization of R&D expenses for tax purposes is repealed along the lines recently proposed in the Tax Relief for American Families and
−Removed: Workers Act of 2024, the Company will again be able to realize the benefit of U.S.
+Added: Also, in the event that the provision of the TCJA requiring capitalization and amortization of R&D expenses for tax purposes is repealed along the lines proposed in the Tax Relief for American Families and Workers Act of 2024, the Company will again be able to realize the benefit of U.S.
R&D expenses as incurred but expects no material impact to its effective income tax rate.
−Removed: Non-GAAP Income and Non-GAAP EPS
−Removed: Non-GAAP income and non-GAAP EPS are alternative views of the Company’s performance that Merck is providing because management believes this information enhances investors’ understanding of the Company’s results since management uses non-GAAP measures to assess performance.
−Removed: Non-GAAP income and non-GAAP EPS exclude certain items because of the nature of these items and the impact that they have on the analysis of underlying business performance and trends.
+Added: Non-GAAP Income (Loss) and Non-GAAP EPS
+Added: Non-GAAP income (loss) and non-GAAP earnings (loss) per share (EPS) are alternative views of the Company’s performance that Merck is providing because management believes this information enhances investors’ understanding of the Company’s results since management uses non-GAAP measures to assess performance.
+Added: Non-GAAP income (loss) and non-GAAP EPS exclude certain items because of the nature of these items and the impact that they have on the analysis of underlying business performance and trends.
The excluded items (which should not be considered non-recurring) consist of acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities, and certain other items.
These excluded items are significant components in understanding and assessing financial performance.
−Removed: Non-GAAP income and non-GAAP EPS are important internal measures for the Company.
+Added: Non-GAAP income (loss) and non-GAAP EPS are important internal measures for the Company.
Senior management receives a monthly analysis of operating results that includes a non-GAAP EPS metric.
Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics.
−Removed: In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric.
−Removed: Since non-GAAP income and non-GAAP EPS are not measures determined in accordance with GAAP, they have no standardized meaning prescribed by GAAP and, therefore, may not be comparable to the calculation of similar measures of other companies.
−Removed: The information on non-GAAP income and non-GAAP EPS should be considered in addition to, but not as a substitute for or superior to, net income and EPS prepared in accordance with generally accepted accounting principles in the U.S.
+Added: In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income (loss) metric.
+Added: Since non-GAAP income (loss) and non-GAAP EPS are not measures determined in accordance with GAAP, they have no standardized meaning prescribed by GAAP and, therefore, may not be comparable to the calculation of similar measures of other companies.
+Added: The information on non-GAAP income (loss) and non-GAAP EPS should be considered in addition to, but not as a substitute for or superior to, net income (loss) and EPS prepared in accordance with generally accepted accounting principles in the U.S.
A reconciliation between GAAP financial measures and non-GAAP financial measures is as follows:
Three Months Ended
+Added: June 30, Six Months Ended
($ in millions except per share amounts) 2024 2023 2024 2023
−Removed: Income before taxes as reported under GAAP $ 5,670 $ 3,650
+Added: Income (loss) before taxes as reported under GAAP
+Added: $ 6,006 $ (5,335) $ 11,675 $ (1,685)
Increase (decrease) for excluded items:
1 unchanged sentence
Restructuring costs 177 236 422 333
−Removed: Income from investments in equity securities, net (116) (429)
+Added: (Income) loss from investments in equity securities, net
+Added: (49) 194 (165) (235)
Charge for Zetia antitrust litigation settlements — — — 573
−Removed: Non-GAAP income before taxes 6,296 4,481
+Added: Non-GAAP income (loss) before taxes
+Added: 6,767 (4,407) 13,061 74
Income tax provision as reported under GAAP 545 637 1,447 1,462
Estimated tax benefit on excluded items (1)
+Added: 148 173 257 261
+Added: Tax benefit resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year
Non-GAAP income tax provision 952 810 1,963 1,723
−Removed: Non-GAAP net income
+Added: Non-GAAP net income (loss)
+Added: 5,815 (5,217) 11,098 (1,649)
Net income attributable to noncontrolling interests as reported under GAAP 6 3 11 7
−Removed: Non-GAAP net income attributable to Merck & Co., Inc.
+Added: Non-GAAP net income (loss) attributable to Merck & Co., Inc.
$ 5,809 $ (5,220) $ 11,087 $ (1,656)
5 unchanged sentences
(1) The estimated tax impact on the excluded items is determined by applying the statutory rate of the originating territory of the non-GAAP adjustments.
−Removed: (2) GAAP and non-GAAP EPS were negatively affected in the first quarter of 2024 and 2023 by $0.26 per share and $0.52 per share, respectively, of charges for certain upfront payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions.
+Added: (2) The Company recorded a net loss on both a GAAP and non-GAAP basis for the second quarter and first six months of 2023;
+Added: therefore, no potential dilutive common shares were used in the computations of loss per common share assuming dilution because the effects would have been antidilutive.
+Added: (3) GAAP and non-GAAP EPS were negatively affected in the second quarter of 2023 by $4.02 per share, and for the first six months of 2024 and 2023 by $0.26 per share and $4.53 per share, respectively, of charges for certain upfront payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions.
Acquisition- and Divestiture-Related Costs
−Removed: Non-GAAP income and non-GAAP EPS exclude the impact of certain amounts recorded in connection with acquisitions and divestitures of businesses.
+Added: Non-GAAP income (loss) and non-GAAP EPS exclude the impact of certain amounts recorded in connection with acquisitions and divestitures of businesses.
These amounts include the amortization of intangible assets, as well as intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration.
Also excluded are integration, transaction, and certain other costs associated with acquisitions and divestitures.
−Removed: Non-GAAP income and non-GAAP EPS also exclude amortization of intangible assets related to collaborations and licensing arrangements.
+Added: Non-GAAP income (loss) and non-GAAP EPS also exclude amortization of intangible assets related to collaborations and licensing arrangements.
Restructuring Costs
−Removed: Non-GAAP income and non-GAAP EPS exclude costs related to restructuring actions (see Note 4 to the condensed consolidated financial statements).
+Added: Non-GAAP income (loss) and non-GAAP EPS exclude costs related to restructuring actions (see Note 4 to the condensed consolidated financial statements).
These amounts include employee separation costs and accelerated depreciation associated with facilities to be closed or divested.
Accelerated depreciation costs represent the difference between the depreciation expense to be recognized over the revised useful life of the asset, based upon the anticipated date the site will be closed or divested or the equipment disposed of, and depreciation expense as determined utilizing the useful life prior to the restructuring actions.
−Removed: Restructuring costs also include asset abandonment, facility shut-down and other related costs, as well as employee-related
−Removed: costs such as curtailment, settlement and termination charges associated with pension and other postretirement benefit plans and share-based compensation costs.
+Added: Restructuring costs also include asset abandonment, facility shut-down and other related costs, as well as employee-related costs such as curtailment, settlement and termination charges associated with pension and other postretirement benefit plans and share-based compensation costs.
Income and Losses from Investments in Equity Securities
−Removed: Non-GAAP income and non-GAAP EPS exclude realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds.
+Added: Non-GAAP income (loss) and non-GAAP EPS exclude realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds.
Certain Other Items
−Removed: Non-GAAP income and non-GAAP EPS exclude certain other items.
+Added: Non-GAAP income (loss) and non-GAAP EPS exclude certain other items.
These items are adjusted for after evaluating them on an individual basis, considering their quantitative and qualitative aspects.
Typically, these consist of items that are unusual in nature, significant to the results of a particular period or not indicative of future operating results.
−Removed: Excluded from non-GAAP income and non-GAAP EPS in 2023 is a charge related to settlements with certain plaintiffs in the Zetia antitrust litigation (see Note 7 to the condensed consolidated financial statements).
+Added: Excluded from non-GAAP income and non-GAAP EPS in 2024 is a benefit due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year (see Note 12 to the condensed consolidated financial statements).
+Added: Excluded from non-GAAP income (loss) and non-GAAP EPS in 2023 is a charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.
Research and Development Update
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and internationally.
−Removed: MK-1022, patritumab deruxtecan, a potential first-in-class HER3 directed DXd antibody drug conjugate (ADC), is under priority review by the FDA for the treatment of adult patients with locally advanced or metastatic EGFR-mutated NSCLC previously treated with two or more systemic therapies.
+Added: MK-1022, patritumab deruxtecan, is a potential first-in-class HER3 directed DXd antibody drug conjugate (ADC), under review by the FDA for the treatment of adult patients with locally advanced or metastatic EGFR-mutated NSCLC previously treated with two or more systemic therapies.
The Biologics License Application (BLA) is based on the primary results from the HERTHENA-Lung01 pivotal Phase 2 trial and data results presented at the IASLC 2023 World Conference on Lung Cancer, which were simultaneously published in the Journal of Clinical Oncology.
−Removed: The FDA set a Prescription Drug User Fee Act (PDUFA), or target action, date of June 26, 2024 for the BLA.
−Removed: The priority review follows receipt of Breakthrough Therapy designation granted by the FDA in December 2021.
−Removed: The BLA is being reviewed under the Real-Time Oncology Review program.
+Added: In June 2024, the FDA issued a complete response letter (CRL) for the BLA due to findings pertaining to an inspection of a third-party manufacturing facility.
+Added: The CRL did not identify any issues with the efficacy or safety data submitted.
Patritumab deruxtecan (HER3-DXd) was discovered by Daiichi Sankyo and is being jointly developed by Daiichi Sankyo and Merck.
−Removed: V116, the Company’s investigational 21-valent pneumococcal conjugate vaccine designed to help prevent invasive pneumococcal disease and pneumococcal pneumonia in adults, is under priority review by the FDA.
−Removed: The BLA for V116 is supported by results from multiple Phase 3 clinical studies evaluating V116 in both vaccine-naïve and vaccine-experienced adult patient populations, including STRIDE-3, STRIDE-4, STRIDE-5 and STRIDE-6.
−Removed: The FDA set a PDUFA date of June 17, 2024.
−Removed: V116 was granted Breakthrough Therapy designation from the FDA for the prevention of invasive pneumococcal disease and pneumococcal pneumonia caused by Streptococcus pneumoniae serotypes 3, 6A/C, 7F, 8, 9N, 10A, 11A, 12F, 15A, 15B/C, 16F, 17F, 19A, 20, 22F, 23A, 23B, 24F, 31, 33F, 35B in adults 18 years of age and older.
−Removed: V116 is also under review in the EU.
−Removed: MK-7962, Winrevair (sotatercept-csrk), Merck’s novel activin signaling inhibitor, is under review in the EU for the treatment of adult patients with PAH (WHO Group 1).
−Removed: The application is based on the results from the Phase 3 STELLAR trial.
−Removed: Winrevair was granted Priority Medicines (PRIME) scheme and Orphan Drug designation by the European Medicines Agency for the treatment of PAH.
+Added: Merck is working with Daiichi Sankyo to address FDA feedback.
+Added: V116, Capvaxive , the Company’s 21-valent pneumococcal conjugate vaccine designed to help prevent invasive pneumococcal disease and pneumococcal pneumonia in adults, is under review in the EU.
+Added: The application is supported by results from multiple Phase 3 clinical studies evaluating V116 in both vaccine-naïve and vaccine-experienced adult patient populations, including STRIDE-3, STRIDE-4, STRIDE-5 and STRIDE-6.
+Added: MK-7962, Winrevair (sotatercept), Merck’s novel activin signaling inhibitor, is under review in the EU for the treatment of adult patients with PAH.
+Added: In June 2024, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) recommended the approval of Winrevair , in combination with other PAH therapies, for the treatment of PAH in adult patients with WHO functional class II to III, to improve exercise capacity.
+Added: The CHMP recommendation is based on data from the Phase 3 STELLAR trial.
+Added: Winrevair was previously granted Priority Medicines (PRIME) scheme and Orphan Drug designation by the EMA for the treatment of PAH.
+Added: The EC will now review the CHMP recommendation, and the EC’s decision is expected in the third quarter of 2024.
MK-7264, gefapixant, is a non-narcotic, oral selective P2X3 receptor antagonist for the treatment of refractory or unexplained chronic cough in adults.
−Removed: In December 2023, the FDA issued a second Complete Response Letter (CRL) regarding the resubmission of Merck’s New Drug Application for gefapixant.
+Added: In December 2023, the FDA issued a second CRL regarding the resubmission of Merck’s New Drug Application for gefapixant.
In the CRL, the FDA concluded that Merck’s application did not meet substantial evidence of effectiveness for treating refractory chronic cough and unexplained chronic cough.
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Further trials are being planned for other cancers.
−Removed: Keytruda is under priority review by the FDA in combination with chemotherapy (carboplatin and paclitaxel), followed by Keytruda as a single agent for the treatment of patients with primary advanced or recurrent endometrial carcinoma, based on the KEYNOTE-868 trial.
−Removed: The FDA set a PDUFA date of June 21, 2024 for the supplemental BLA.
+Added: Keytruda is under priority review by the FDA in combination with chemotherapy, for the first-line treatment of adult patients with unresectable advanced or metastatic malignant pleural mesothelioma, based on the Phase 2/3 IND.227/KEYNOTE-483 trial.
+Added: The FDA set a Prescription Drug User Fee Act (PDUFA) date of September 25, 2024 for the supplemental BLA.
KEYNOTE-483 is also under review in the EU and Japan.
+Added: Keytruda is under review in the EU and Japan in combination with chemotherapy (carboplatin and paclitaxel), followed by Keytruda as a single agent for the treatment of patients with primary advanced or recurrent endometrial carcinoma, based on the KEYNOTE-868 trial.
In addition, Keytruda is under review in the EU and Japan in combination with Padcev (enfortumab vedotin-ejfv), an ADC, for the treatment of adult patients with locally advanced or metastatic urothelial carcinoma, based on the KEYNOTE-A39 trial that was conducted in collaboration with Seagen (now Pfizer Inc.) and Astellas.
+Added: In July 2024, the EMA’s CHMP adopted a positive opinion recommending approval of Keytruda in combination with Padcev for the first-line treatment of adult patients with unresectable or metastatic urothelial carcinoma.
+Added: The CHMP’s recommendation will now be reviewed by the EC for marketing authorization in the EU, and a final decision is expected in the third quarter of 2024.
Keytruda is also under review in the EU and Japan in combination with chemoradiotherapy for the treatment of patients with high-risk locally advanced cervical cancer, based on the KEYNOTE-A18 trial.
−Removed: Keytruda is under review in Japan as part of a perioperative treatment regimen for certain patients with resectable stage II, IIIA or IIIB NSCLC based on the KEYNOTE-671 study.
+Added: Keytruda is under review in Japan as part of a perioperative treatment regimen for certain patients with resectable stage II, IIIA or IIIB (T3-4N2) NSCLC based on the KEYNOTE-671 study.
A perioperative treatment regimen includes treatment before surgery (neoadjuvant) and continued after surgery (adjuvant).
−Removed: Additionally, Keytruda is under review in Japan in combination with fluoropyrimidine- and platinum-containing chemotherapy for the first-line treatment of patients with locally advanced unresectable or metastatic gastric or gastroesophageal junction adenocarcinoma, based on the KEYNOTE-859 trial.
−Removed: Keytruda is also under review in Japan in combination with standard of care chemotherapy (gemcitabine and cisplatin) for the treatment of patients with locally advanced unresectable or metastatic biliary tract cancer, based on the KEYNOTE-966 trial.
−Removed: Welireg is under review in the EU for the treatment of previously treated advanced RCC based on the LITEPARK-005 clinical trial and for the treatment of VHL disease based on the LITESPARK-004 clinical trial.
−Removed: In March 2024, Merck announced that in the Phase 3 KEYLYNK-006 trial, Keytruda in combination with chemotherapy followed by Keytruda plus maintenance Lynparza did not meet the study’s pre-specified statistical criteria for overall survival or progression-free survival compared to Keytruda in combination with chemotherapy (pemetrexed plus carboplatin or cisplatin) followed by Keytruda plus maintenance chemotherapy (pemetrexed).
+Added: Welireg is under review in the EU for the treatment of VHL disease based on the LITESPARK-004 clinical trial and and for the treatment of previously treated advanced RCC based on the LITESPARK-005 clinical trial.
+Added: LITESPARK-005 is also under review in Japan.
+Added: In May 2024, the Company announced that the Phase 3 KEYNOTE-B21 trial evaluating Keytruda in combination with chemotherapy as adjuvant treatment, with or without radiotherapy, did not meet its primary endpoint of disease-free survival for the treatment of patients with newly diagnosed, high-risk endometrial cancer after surgery with curative intent.
+Added: At a pre-specified interim analysis conducted by an independent Data Monitoring Committee (DMC), adjuvant treatment with Keytruda plus
+Added: chemotherapy, with or without radiotherapy, did not meet the study’s pre-specified statistical criteria for disease-free survival compared to placebo plus adjuvant chemotherapy, with or without radiotherapy.
+Added: The study’s other primary endpoint of overall survival was not formally tested since superiority was not reached for disease-free survival.
A full evaluation of the data from this study is ongoing.
−Removed: Merck will work with investigators to share the results with the scientific community.
−Removed: Also, the Company has discontinued development of MK-5475 in PAH but continues to study MK-5475 in PH associated with chronic obstructive pulmonary disease.
−Removed: The chart below reflects the Company’s research pipeline as of May 1, 2024.
+Added: The Company will work with investigators to share the results with the scientific community.
+Added: Also In May 2024, the Company announced the discontinuation of the vibostolimab and pembrolizumab coformulation arm of the Phase 3 KeyVibe-010 trial that is evaluating the regimen as adjuvant treatment for patients with resected high-risk melanoma (Stage IIB-IV).
+Added: At a pre-planned analysis, data showed that the primary endpoint of recurrence-free survival met the pre-specified futility criteria.
+Added: A higher rate of discontinuation of all adjuvant therapy by patients in the coformulation arm versus the Keytruda -only arm, primarily due to immune-mediated adverse experiences, rendered it highly unlikely that the trial could achieve a statistically significant improvement in recurrence-free survival.
+Added: Based on the recommendation of an independent DMC, the Company is unblinding the study and recommends that patients receiving the vibostolimab and pembrolizumab coformulation be offered the option to be treated with Keytruda monotherapy.
+Added: Data analysis from this study is ongoing.
+Added: Results will be shared with the scientific community and communicated to regulatory agencies.
+Added: The chart below reflects the Company’s research pipeline as of August 2, 2024.
Candidates shown in Phase 3 include the date such candidate entered into Phase 3 development.
3 unchanged sentences
MK-1022 (patritumab deruxtecan) (1)
+Added: Head and Neck
MK-1308 (quavonlimab) (2)
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MK-2400 (ifinatamab deruxtecan) (1)
−Removed: Small-Cell Lung
+Added: Head and Neck
MK-2870 (sacituzumab tirumotecan) (1)(3)
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MK-7684A (vibostolimab+pembrolizumab)
−Removed: Head and Neck
−Removed: Hepatocellular
−Removed: Cutaneous Squamous Cell
MK-7902 Lenvima (1)(2)
Head and Neck
+Added: Cutaneous Squamous Cell
Dengue Fever Virus Vaccine
+Added: Diabetic Macular Edema
+Added: MK-3000 Restoret
HIV-1 Infection
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Hematological Malignancies (March 2023)
+Added: Non-Small-Cell Lung (May 2024)
MK-1308A (quavonlimab+pembrolizumab)
Renal Cell (April 2021)
+Added: MK-2400 (ifinatamab deruxtecan) (1)
+Added: Small-Cell Lung (July 2024)
MK-2870 (sacituzumab tirumotecan) (1)(3)
Breast (April 2024)
+Added: Cervical (July 2024)
+Added: Gastric (May 2024)
Endometrial (December 2023)
3 unchanged sentences
Hepatocellular (May 2016) (EU)
−Removed: Mesothelioma (May 2018)
Ovarian (December 2018)
13 unchanged sentences
MK-7684A (vibostolimab+pembrolizumab)
−Removed: Melanoma (January 2023)
Non-Small-Cell Lung (April 2021)
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Pneumococcal Vaccine Adult
−Removed: V116 (U.S.) (EU)
+Added: V116 Capvaxive (EU)
Pulmonary Arterial Hypertension
2 unchanged sentences
MK-3475 Keytruda
−Removed: • Primary Advanced or Recurrent Endometrial Carcinoma
+Added: • First-Line Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma
(KEYNOTE-483) (U.S.) (EU) (JPN)
−Removed: • First-Line Locally Advanced or Metastatic Urothelial Cancer
+Added: • Primary Advanced or Recurrent Endometrial Carcinoma
+Added: (KEYNOTE-868) (EU) (JPN)
+Added: • First-Line Locally Advanced or Metastatic Urothelial Carcinoma
(KEYNOTE-A39) (EU) (JPN)
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(KEYNOTE-A18) (EU) (JPN)
−Removed: • Resectable Stage II, IIIA or IIIB NSCLC
−Removed: (KEYNOTE-671) (JPN)
−Removed: • First-Line HER2 Negative Locally Advanced Unresectable or Metastatic Gastric Cancer
−Removed: (KEYNOTE-859) (JPN)
−Removed: • First-Line Locally Advanced Unresectable or Metastatic Biliary Tract Cancer
+Added: • Resectable Stage II, IIIA or IIIB (T3-4N2) NSCLC
(KEYNOTE-671) (JPN)
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• Previously Treated Advanced Renal Cell Carcinoma
−Removed: (LITESPARK-005) (EU)
+Added: (LITESPARK-005) (EU) (JPN)
(1) Being developed in a collaboration.
6 unchanged sentences
under Emergency Use Authorization.
+Added: (8) In June 2024, the FDA issued a CRL for the BLA for patritumab deruxtecan.
+Added: Merck is working with Daiichi Sankyo to address FDA feedback .
(9) In December 2023, the FDA issued a CRL for the NDA for gefapixant.
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Analysis of Liquidity and Capital Resources
−Removed: ($ in millions) March 31, 2024 December 31, 2023
+Added: ($ in millions) June 30, 2024 December 31, 2023
Cash and investments $ 11,711 $ 7,345
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Total debt to total liabilities and equity 33.6 % 32.9 %
−Removed: Cash provided by operating activities was $3.1 billion in the first three months of 2024 compared with $1.3 billion in the first three months of 2023 reflecting stronger operating performance.
−Removed: Cash provided by operating activities was reduced by milestone and option payments related to certain collaborations of $245 million and $115 million in the first three months of 2024 and 2023, respectively.
+Added: Cash provided by operating activities was $8.7 billion in the first six months of 2024 compared with $5.0 billion in the first six months of 2023 reflecting stronger operating performance.
+Added: Cash provided by operating activities was reduced by milestone and option payments related to certain collaborations of $370 million and $240 million in the first six months of 2024 and 2023, respectively.
Cash provided by operating activities continues to be the Company’s primary source of funds to finance operating needs, with excess cash generally serving as the primary source of funds to finance business development transactions, capital expenditures, dividends paid to shareholders and treasury stock purchases.
−Removed: Cash used in investing activities was $1.4 billion in the first three months of 2024 compared with $2.4 billion in the first three months of 2023.
−Removed: The lower use of cash in investing activities was primarily due to lower cash used for acquisitions, lower purchases of securities and other investments, as well as lower capital expenditures, partially offset by higher proceeds from sales of securities and other investments.
−Removed: Cash used in financing activities was $2.8 billion in the first three months of 2024 compared with $2.1 billion in the first three months of 2023.
−Removed: The higher use of cash in financing activities was primarily due to higher payments on debt and higher dividends paid to shareholders, partially offset by higher proceeds from the exercise of stock options and lower purchases of treasury stock.
+Added: Cash used in investing activities was $2.4 billion in the first six months of 2024 compared with $13.8 billion in the first six months of 2023.
+Added: The lower use of cash in investing activities was primarily due to lower cash used for acquisitions, lower purchases of securities and other investments, as well as lower capital expenditures, partially offset by lower proceeds from sales of securities and other investments.
+Added: Cash used in financing activities was $1.6 billion in the first six months of 2024 compared with cash provided by financing activities of $1.7 billion in the first six months of 2023.
+Added: The change was primarily due to lower proceeds from the
+Added: issuance of debt, no proceeds from short-term borrowings and higher dividends paid to shareholders, partially offset by lower payments on long-term debt, lower purchases of treasury stock and higher proceeds from the exercise of stock options.
The Company has accounts receivable factoring agreements with financial institutions in certain countries to sell accounts receivable.
−Removed: The Company factored $2.7 billion and $3.0 billion of accounts receivable at March 31, 2024 and December 31, 2023, respectively, under these factoring arrangements, which reduced outstanding accounts receivable.
+Added: The Company factored $2.9 billion and $3.0 billion of accounts receivable at June 30, 2024 and December 31, 2023, respectively, under these factoring arrangements, which reduced outstanding accounts receivable.
The cash received from the financial institutions is reported within operating activities in the Condensed Consolidated Statement of Cash Flows.
1 unchanged sentence
The net cash flows relating to these collections are reported as financing activities in the Condensed Consolidated Statement of Cash Flows.
+Added: In May 2024, MSD Netherlands Capital B.V., a wholly-owned finance subsidiary of Merck, completed a registered public offering of €3.4 billion in aggregate principal amount of euro-dominated senior notes comprised of €850 million of 3.25% senior notes due 2032, €850 million of 3.50% senior notes due 2037, €850 million of 3.70% senior notes due 2044 and €850 million of 3.75% senior notes due 2054.
+Added: The net cash proceeds from the offering were used for general corporate purposes.
In March 2024, the Company’s $750 million, 2.90% notes matured in accordance with their terms and were repaid.
−Removed: Dividends paid to stockholders were $2.0 billion and $1.9 billion for the first three months of 2024 and 2023, respectively.
−Removed: In November 2023, Merck’s Board of Directors declared a quarterly dividend of $0.77 per share on the Company’s outstanding common stock for the first quarter of 2024 that was paid in January 2024.
−Removed: In January 2024, the Board of Directors declared a quarterly dividend of $0.77 per share on the Company’s outstanding common stock for the second quarter that was paid in April 2024.
+Added: Dividends paid to stockholders were $3.9 billion and $3.7 billion for the first six months of 2024 and 2023, respectively.
+Added: In January 2024, Merck’s Board of Directors declared a quarterly dividend of $0.77 per share on the Company’s outstanding common stock for the second quarter that was paid in April 2024.
+Added: In May 2024, Merck’s Board of Directors declared a quarterly dividend of $0.77 per share on the Company’s outstanding common stock for the third quarter of 2024 that was paid in July 2024.
In 2018, Merck’s Board of Directors authorized purchases of up to $10 billion of Merck’s common stock for its treasury.
The treasury stock purchase authorization has no time limit and will be made over time in open-market transactions, block transactions on or off an exchange, or in privately negotiated transactions.
−Removed: During the first three months of 2024, the Company purchased $122 million (1 million shares) of its common stock for its treasury under this program.
−Removed: As of March 31, 2024, the Company’s remaining share repurchase authorization was $3.6 billion.
+Added: During the first six months of 2024, the Company purchased $373 million (3 million shares) of its common stock for its treasury under this program.
+Added: As of June 30, 2024, the Company’s remaining share repurchase authorization was $3.3 billion.
The Company has a $6.0 billion credit facility that matures in May 2028.
3 unchanged sentences
The Company’s significant accounting policies, which include management’s best estimates and judgments, are included in Note 2 to the consolidated financial statements for the year ended December 31, 2023 included in Merck’s Form 10‑K filed on February 26, 2024.
+Added: See Note 1 to the condensed consolidated financial statements for information on the adoption of a new accounting standard during 2024.
A discussion of accounting estimates considered critical because of the potential for a significant impact on the financial statements due to the inherent uncertainty in such estimates are disclosed in the Critical Accounting Estimates section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Merck’s Form 10-K.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.