OREANDA-NEWS. Merck (NYSE:MRK), known as MSD outside the United States and Canada, today will report on the ongoing execution of its multi-year, strategic initiative to sharpen its commercial and research and development (R&D) focus, redesign its operating model and reduce its cost base. In October 2013, Merck launched its global initiative to transform the company into a more competitive and innovative company and to build a platform for sustained future growth.

“Over the past 15 months, we’ve seen the results of our transformation strategy, including advancing major pipeline candidates, completing multiple business development actions and securing first-in-class product approvals,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “As a result of our strong and continued commitment to the pursuit of science and R&D, our labs are focused on many of the most innovative areas in biomedical research today, which we believe is the best way to create intrinsic value for both society and for our shareholders.”

Positioned for Long-Term Growth Through Innovation

As a result of prioritizing its research efforts in the core areas where it can make the most impact on addressing critical areas of unmet medical need, Merck is now focused on many of the world’s most urgent global health challenges, including immuno-oncology, hepatitis C, cardiometabolic disease, antimicrobial resistance and Alzheimer’s disease. Merck accelerated several of its key clinical programs in 2014, positioning the company for long-term growth.

In addition to being the first anti-PD-1 therapy approved in the United States, KEYTRUDA (pembrolizumab) received Breakthrough Therapy Designation from the U.S. Food and Drug Administration (FDA) in two tumor types: advanced melanoma and advanced non-small cell lung cancer (NSCLC).
In mid-year 2015, Merck expects to submit a supplemental Biologics License Application (sBLA) to the FDA for KEYTRUDA for the treatment of patients with Epidermal Growth Factor Receptor (EGFR) mutation-negative and Anaplastic Lymphoma Kinase (ALK) rearrangement-negative NSCLC whose disease has progressed on or following platinum-containing chemotherapy.
In 2014, Merck engaged in multiple research collaborations in oncology, and data for KEYTRUDA was presented in seven different types of cancer. KEYTRUDA continues to be studied in more than 30 cancers and in 20 combination settings.

Merck also continued to accelerate its R&D efforts in its other core areas of focus, such as hepatitis C.

The company expects to file a New Drug Application (NDA) with the FDA in the first half of 2015 for grazoprevir/elbasvir (MK-5172/MK-8742), the company’s investigational oral, once-daily combination regimen for the treatment of chronic hepatitis C virus (HCV) infection.
Merck bolstered its hepatitis pipeline in 2014 by acquiring Idenix Pharmaceuticals.
As a result of the acquisition, the Phase 2 C-CREST studies (NCT02332707 and NCT02332720) have been initiated to study combination regimens of grazoprevir and MK-3682 (formerly IDX21437) with either elbasvir or MK-8408 for the treatment of HCV infection.

In total, Merck now has more than 10 Phase 3 clinical programs in its core therapeutic areas, as well as in other areas with significant potential such as Alzheimer’s disease, and has multiple strategic collaborations.

Merck recently initiated its first Phase 3 study (NCT02275780) of doravirine (MK-1439), an investigational HIV medicine.
In addition to oncology collaborations, Merck also initiated several other clinical research collaborations in 2014, such as working with NewLink on the development of an investigational Ebola vaccine and a cardiovascular-focused collaboration with Bayer.

Focused Commercial Strategy Provides a Strong Platform for Growth and Leadership

Additionally, Merck has taken several steps to create and maximize near- and longer-term commercial leadership opportunities that create value for sustained growth.

The initial indication for KEYTRUDA was filed and launched in the United States within five months in 2014; the company continues to focus efforts on this priority launch. Additionally, filings are underway in the European Union and globally for advanced melanoma.
Merck bolstered its product portfolio by entering into an agreement to acquire Cubist Pharmaceuticals, a global leader in the discovery, development and supply of antibiotics to treat serious and potentially life-threatening infections.
Following the completion of the acquisition of Cubist in the first quarter of 2015, Merck looks forward to launching ZERBAXA (ceftolozan/tazobactam), a recently approved antibiotic to treat Gram-negative bacteria, a key cause of in-hospital infections.
In total, Merck received approval for seven products in 2014, such as GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and BELSOMRA (suvorexant).

Reduced Operating Costs Drive Profitability and Investment in Innovation and Late-Stage Portfolio

In 2014, the company’s redesigned operating model enabled Merck to remain on track to meet its goal of realizing \$2.5 billion in annual net cost savings by the end of 2015. These savings are off of the company’s full-year 2012 expense levels. As part of its prioritization efforts, the company continued to review its assets to determine whether they could provide the best short- and longer-term value with Merck or elsewhere.

As a result, Merck divested its consumer care business to Bayer for \$14 billion, which provided capital to the company to better resource its core areas of focus and return cash to shareholders.
Merck determined its Animal Health business remains a key growth driver and is committed to looking for ways to augment this critical business.
In 2014, the company continued to streamline its physical footprint, divesting multiple sites within its manufacturing network around the world and completing the closures of facilities in Whitehouse Station and Summit, N.J.

About Merck

Today’s Merck is a global healthcare leader working to help the world be well. Merck is known as MSD outside the United States and Canada. Through our prescription medicines, vaccines, biologic therapies and animal health products, we work with customers and operate in more than 140 countries to deliver innovative health solutions. We also demonstrate our commitment to increasing access to healthcare through far-reaching policies, programs and partnerships. For more information, visit www.merck.com and connect with us on Twitter, Facebook and YouTube.

Merck Forward-Looking Statement

This news release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; Merck’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of Merck patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions.

Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2013 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).