Belzutifan

- Total Revenues of $628.7 million, Cabozantinib Franchise U.S. Net Product Revenues of $573.0 million - - GAAP Diluted EPS of $0.82, Non-GAAP Diluted EPS of $0.91 - - Conference Call and Webcast Today at 5:00 PM ET - ALAMEDA, Calif.--(BUSINESS WIRE)--Aug. 5, 2026-- Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the second quarter of 2026, provided an update on progress toward achieving key corporate objectives, and outlined its commercial, clinical and pipeline development milestones. “Exelixis continues to execute across the key pillars of our business, positioning the company to deliver on our strategic objectives for 2026 and beyond,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer, Exelixis. “For zanzalintinib, our next potential franchise molecule, the R&D organization is executing on our priority goals for pivotal data readouts, clinical trial enrollment and new study initiations, while also laying the foundation for the next wave of development opportunities. Additionally, in the second quarter, we saw the continued growth of the cabozantinib franchise while advancing preparations for the potential launch of zanzalintinib in metastatic colorectal cancer, pending approval from regulatory authorities later this year. We are executing on all these initiatives while maintaining disciplined expense management and capital allocation, with a focus on simultaneously investing in R&D and returning capital to shareholders, as well as pursuing opportunistic business development when appropriate.” Second Quarter 2026 Financial Results Total revenues for the quarter ended June 30, 2026 were $628.7 million, as compared to $568.3 million for the comparable period in 2025. Total revenues for the quarter ended June 30, 2026 included net product revenues of $573.0 million, as compared to $520.0 million for the comparable period in 2025. The increase in net product revenues was primarily due to an increase in sales volume. Collaboration revenues, composed of license revenues and collaboration services revenues, were $55.7 million for the quarter ended June 30, 2026, as compared to $48.2 million for the comparable period in 2025. The increase in collaboration revenues was primarily related to higher royalty revenues for the sales of cabozantinib outside the U.S. generated by Exelixis’ collaboration partner Ipsen Pharma SAS (Ipsen), partially offset by lower development cost reimbursements earned. Research and development expenses for the quarter ended June 30, 2026 were $212.0 million, as compared to $200.4 million for the comparable period in 2025. The increase in research and development expenses was primarily related to increases in clinical trial costs, manufacturing costs to support our development candidates, and license and other collaboration costs, partially offset by a decrease in personnel expenses. Selling, general and administrative expenses for the quarter ended June 30, 2026 were $147.6 million, as compared to $134.9 million for the comparable period in 2025. The increase in selling, general and administrative expenses was primarily related to increases in marketing activities and personnel expenses. Provision for income taxes for the quarter ended June 30, 2026 was $50.6 million, as compared to $45.6 million for the comparable period in 2025. GAAP net income for the quarter ended June 30, 2026 was $212.1 million, or $0.85 per share, basic and $0.82 per share, diluted, as compared to GAAP net income of $184.8 million, or $0.68 per share, basic and $0.65 per share, diluted, for the comparable period in 2025. GAAP net income per share for the quarter ended June 30, 2026 was favorably impacted by lower weighted-average common shares outstanding for the quarter ended June 30, 2026, as compared to the comparable period in 2025, as a result of the stock repurchase programs. Non-GAAP net income for the quarter ended June 30, 2026 was $237.1 million, or $0.95 per share, basic and $0.91 per share, diluted, as compared to non-GAAP net income of $212.6 million, or $0.78 per share, basic and $0.75 per share, diluted, for the comparable period in 2025. Non-GAAP Financial Measures To supplement Exelixis’ financial results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Exelixis presents non-GAAP net income (and the related per share measures), which excludes from GAAP net income (and the related per share measures) stock-based compensation, adjusted for the related income tax effect for all periods presented. Exelixis believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Exelixis believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Exelixis’ results from period to period, and to identify operating trends in Exelixis’ business. Exelixis has excluded stock-based compensation, adjusted for the related income tax effect, because it is a non-cash item that may vary significantly from period to period as a result of changes not directly or immediately related to the operational performance for the periods presented. Exelixis also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Exelixis encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations, to more fully understand Exelixis’ business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release. 2026 Financial Guidance Exelixis is providing the following updated financial guidance for fiscal year 2026. Net product and total revenues guidance do not currently reflect any revenues resulting from a potential U.S. regulatory approval and commercial launch of zanzalintinib for the treatment of patients with previously treated metastatic colorectal cancer (CRC). The U.S. Food and Drug Administration (FDA) is currently reviewing Exelixis' New Drug Application (NDA) for this proposed indication, when used in combination with atezolizumab (Tecentriq®). Cabozantinib Franchise Highlights Net product revenues generated by the cabozantinib franchise in the U.S. were $573.0 million during the second quarter of 2026, with net product revenues of $570.6 million from CABOMETYX® (cabozantinib) and $2.4 million from COMETRIQ® (cabozantinib). Based upon cabozantinib-related net product revenues generated by Exelixis’ collaboration partners, Ipsen and Takeda Pharmaceutical Company Limited, during the quarter ended June 30, 2026, Exelixis earned $53.2 million in royalty revenues. Zanzalintinib GI Highlights Ongoing Regulatory Review of Zanzalintinib in Combination with Atezolizumab for Previously Treated Metastatic CRC and Update on Results from the Non-Liver Metastases (NLM) Subgroup from STELLAR-303. In June 2026, Exelixis announced results from the final analysis of the dual primary endpoint of overall survival (OS) in the NLM subgroup in the phase 3 STELLAR-303 pivotal trial evaluating zanzalintinib in combination with atezolizumab versus regorafenib in previously treated non-microsatellite instability (non-MSI)-high metastatic CRC. The results showed a non-statistically significant trend in OS favoring the combination in the NLM subgroup. As previously announced in June 2025, STELLAR-303 met its other dual primary endpoint, OS in the intention-to-treat population, which included all randomized patients regardless of the presence of active liver metastases. In February 2026, the U.S. FDA accepted the company’s NDA for zanzalintinib, in combination with atezolizumab, for the treatment of patients with metastatic CRC who have been previously treated with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy, and, if RAS wild-type, an anti-epidermal growth factor receptor (EGFR) therapy. The FDA assigned a Prescription Drug User Fee Act (PDUFA) target action date of December 3, 2026. Phase 3 STELLAR-316 Pivotal Trial Nearing Initiation, in Collaboration with Merck and Natera. Exelixis remains on track to initiate the planned phase 3 STELLAR-316 pivotal trial of zanzalintinib in mid-2026. This Exelixis-sponsored trial will evaluate zanzalintinib, with and without KEYTRUDA QLEX™ (pembrolizumab and berahyaluronidase alfa-pmph) [KEYTRUDA QLEX is marketed outside the U.S. as KEYTRUDA SC™], in patients with resected stage II/III CRC who, following definitive therapy, have tested positive for molecular residual disease (MRD+) and have no radiographic evidence of disease. Natera, a global leader in cell-free DNA and precision medicine, will provide its Signatera™ assay to identify MRD+ patients for trial enrollment. In May 2026, Exelixis announced a clinical development collaboration in which Merck, known as MSD outside of the United States and Canada, will supply KEYTRUDA QLEX injection for subcutaneous administration in combination with zanzalintinib for the trial. The primary endpoint of STELLAR-316 will be disease-free survival, with secondary endpoints including circulating tumor DNA clearance. Enrollment Progress for Phase 2/3 STELLAR-311 Pivotal Trial. Exelixis is continuing to actively enroll patients in the phase 2/3 STELLAR-311 pivotal trial. STELLAR-311 is evaluating zanzalintinib versus everolimus as a first oral therapy in patients with advanced neuroendocrine tumors (NET), regardless of site of origin, who have received up to one prior line of therapy. The primary endpoint of the trial is progression-free survival (PFS) per RECIST 1.1 as assessed by blinded independent central review. Zanzalintinib GU Highlights Topline Results for Phase 3 STELLAR-304 Pivotal Trial Expected in Second Half of 2026. In May 2026, Exelixis announced that the company expects topline results from the STELLAR-304 trial in the second half of 2026, depending on event rates. STELLAR-304 is a phase 3 pivotal trial evaluating zanzalintinib in combination with nivolumab versus sunitinib in previously untreated patients with advanced non-clear cell renal cell carcinoma (nccRCC). The primary endpoints of the trial are PFS as assessed by blinded independent radiology committee and objective response rate (ORR) per RECIST 1.1, with OS as the secondary endpoint. Initiation of Phase 3 LITESPARK-034 Pivotal Trial as Part of Clinical Development Collaboration with Merck. In April 2026, Exelixis’ collaborator Merck initiated LITESPARK-034, a global phase 3 pivotal trial evaluating zanzalintinib in combination with WELIREG® (belzutifan) versus WELIREG and placebo in second-line or later advanced renal cell carcinoma (RCC) patients who have progressed on or after both programmed death-1/ligand 1 (PD-1/L1) and vascular endothelial growth factor receptor-tyrosine kinase inhibitor (VEGFR-TKI) therapies in sequence or in combination. LITESPARK-034 is the second of two Merck-sponsored phase 3 pivotal trials of zanzalintinib and WELIREG in RCC under the companies’ clinical development collaboration. Merck initiated the first trial, LITESPARK-033, in December 2025. LITESPARK-033 is evaluating the combination of zanzalintinib and WELIREG versus cabozantinib in first-line advanced RCC following an immunotherapy administered in the adjuvant setting. Zanzalintinib Development Program Expansion Opportunities Initiation of Phase 2 STELLAR-201 Trial in Recurrent Meningioma. In May 2026, Exelixis announced the initiation of STELLAR-201, a phase 2 trial evaluating zanzalintinib in patients with recurrent Grade I/II/III meningioma with relapse or progression following radiation and/or surgery or those who are not candidates for these therapies. The primary endpoint of the trial is ORR, with secondary endpoints including PFS, duration of response (DOR) and OS. Enrollment is currently ongoing. Pending favorable results, the trial represents an opportunity for zanzalintinib to become the first and only systemic therapy for this form of meningioma, the most common primary intracranial neoplasm for which there are currently no approved systemic therapies. Expansion of Zanzalintinib Clinical Development Program in Squamous Non-small Cell Lung Cancer (NSCLC), Metastatic Bladder Cancer and Metastatic Castration-Resistant Prostate Cancer (mCRPC). Exelixis has additional planned and ongoing zanzalintinib studies across multiple tumor types. These include STELLAR-202, a planned phase 2 trial evaluating zanzalintinib in combination with pembrolizumab in the maintenance setting in squamous NSCLC, as well as expansion cohorts in the ongoing phase 1b/2 STELLAR-002 study. The STELLAR-002 expansion cohorts are evaluating zanzalintinib monotherapy in patients with metastatic bladder cancer who have progressed following treatment with enfortumab vedotin and pembrolizumab, as well as zanzalintinib in combination with docetaxel in mCRPC patients with measurable disease. Both the bladder cancer and mCRPC expansion cohorts in the STELLAR-002 study have been initiated and enrollment is ongoing. Exelixis expects to initiate STELLAR-202 in the second half of 2026. Corporate Highlights Zanzalintinib and Cabozantinib Data Presentations at the 2026 American Society of Clinical Oncology Annual Meeting (ASCO 2026). Zanzalintinib and cabozantinib were the subject of numerous presentations at ASCO 2026, which was held from May 29 through June 2 in Chicago. Notable posters included an analysis of the contribution of atezolizumab to the efficacy of the combination with zanzalintinib in the phase 3 STELLAR-303 trial and results from a subgroup analysis of the phase 3 CABINET pivotal trial evaluating CABOMETYX in patients with previously treated advanced NET. The STELLAR-303 data support the contribution of atezolizumab to the previously observed survival benefits of zanzalintinib in combination with atezolizumab for patients with metastatic CRC. The presentation demonstrated the importance of generating data around the potential impact of anti-drug antibodies on systemic exposures or neutralization of immune checkpoint inhibitor activity, which Exelixis plans to continue to interrogate across all zanzalintinib development opportunities. The results from the CABINET subgroup analysis showed CABOMETYX provided significant improvements in PFS versus placebo in patients with NET regardless of functional status, highlighting the ability of CABOMETYX to delay disease progression for these patients. Stock Repurchase Program (SRP) Update. In the second quarter of 2026, Exelixis repurchased $311.6 million of the company’s stock, at an average price of $47.85 per share, and completed the SRP authorized in October 2025, fulfilling its commitment to purchase a total of $750 million of the company’s stock under the October 2025 SRP before December 31, 2026. In May 2026, Exelixis’ Board of Directors authorized the repurchase of up to an additional $750 million of the company’s outstanding common stock before December 31, 2027 (May 2026 SRP). Exelixis began executing stock repurchases under the May 2026 SRP in the second quarter of 2026. Since Exelixis’ Board of Directors authorized the first SRP in March 2023, Exelixis has repurchased a total of $2.9 billion of the company’s common stock, retiring 93.3 million shares, at an average price of $31.12 per share, as of the end of the second quarter of 2026. Stock repurchases under the May 2026 SRP may be made from time to time through a variety of methods, which may include open market purchases, in block trades, Rule 10b5-1 trading plans, accelerated share repurchase transactions, exchange transactions or any combination of such methods. The timing and amount of any stock repurchases under the program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of the company’s common stock and general market conditions. The program does not obligate Exelixis to acquire any amount of its common stock, and may be modified, suspended or discontinued at any time without prior notice. Basis of Presentation Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31. For convenience, references in this press release as of and for the fiscal periods ended July 3, 2026 and July 4, 2025, are indicated as being as of and for the periods ended June 30, 2026 and June 30, 2025, respectively. Conference Call and Webcast Exelixis management will discuss the company’s financial results for the second quarter of 2026 and provide a general business update during a conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today, Wednesday, August 5, 2026. To access the conference call, please dial (800) 715-9871 (domestic) or (646) 307-1963 (international). The Exelixis conference call ID number is 5587241. To access the live webcast link, log onto www.exelixis.com and proceed to the Event Calendar page under the Investors & News heading. A webcast replay of the conference call will be archived on www.exelixis.com for one year. About Exelixis Exelixis is a globally ambitious oncology company innovating next-generation medicines and regimens at the forefront of cancer care. Powered by drug discovery and development excellence, we are rapidly evolving our product portfolio to target an expanding range of tumor types and indications with our clinically differentiated pipeline of small molecules and biotherapeutics. This comprehensive approach harnesses decades of robust investment in our science and partnerships to advance our pipeline of franchise molecules, including our novel oral kinase inhibitor zanzalintinib, and to extend the impact of our flagship commercial product, CABOMETYX® (cabozantinib). Exelixis is driven by a bold scientific pursuit to create transformational treatments that give more patients hope for the future. For information about the company and its mission to help cancer patients recover stronger and live longer, visit www.exelixis.com, follow @ExelixisInc on X (Twitter), like Exelixis, Inc. on Facebook and follow Exelixis on LinkedIn. Forward-Looking Statements This press release contains forward-looking statements, including, without limitation, statements related to: Exelixis’ plans and ability to execute and deliver on its strategic objectives for 2026 and beyond; Exelixis’ belief in zanzalintinib as its next potential franchise molecule; Exelixis’ focus on investing in R&D, returning capital to shareholders, and pursuing opportunistic business development; Exelixis’ goals and clinical development plans for zanzalintinib, including the anticipated timing for pivotal data milestones for STELLAR-304 and plans to initiate additional zanzalintinib trials, including STELLAR-202 and STELLAR-316; Exelixis’ belief that STELLAR-201 represents an opportunity for zanzalintinib to become the first and only systemic therapy for recurrent Grade I/II/III meningioma; complexities and the unpredictability of the regulatory review and approval process with respect to Exelixis’ NDA for zanzalintinib for the treatment of patients with previously treated metastatic CRC, when used in combination with atezolizumab, including the risk that the FDA may not approve zanzalintinib as a treatment for metastatic CRC in a timely fashion, if at all; Exelixis’ updated FY 2026 financial guidance; the timing, amount, and completion of any stock repurchase programs; Exelixis’ scientific pursuit to create transformational treatments that give more patients hope for the future; and other statements that are not historical facts. Any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements and are based upon Exelixis’ current plans, assumptions, beliefs, expectations, estimates and projections. Forward-looking statements involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of these risks and uncertainties, which include, without limitation: the degree of market acceptance of CABOMETYX and other Exelixis products in the indications for which they are approved and in the territories where they are approved, and Exelixis’ and its partners’ ability to obtain or maintain coverage and reimbursement for these products; the effectiveness of CABOMETYX and other Exelixis products in comparison to competing products; complexities and the unpredictability of the regulatory review and approval processes in the U.S. and elsewhere; the level of costs associated with Exelixis’ commercialization, research and development, in-licensing or acquisition of product candidates, and other activities; Exelixis’ ability to maintain and scale adequate sales, marketing, market access and product distribution capabilities for its products or to enter into and maintain agreements with third parties to do so; the availability of data at the referenced times; the potential failure of cabozantinib, zanzalintinib and other Exelixis product candidates, both alone and in combination with other therapies, to demonstrate safety and/or efficacy in clinical testing; uncertainties inherent in the drug discovery and product development process; Exelixis’ dependence on its relationships with its collaboration partners, including their pursuit of regulatory approvals for partnered compounds in new indications, their adherence to their obligations under relevant collaboration agreements and the level of their investment in the resources necessary to complete clinical trials or successfully commercialize partnered compounds in the territories where they are approved; Exelixis’ continuing compliance with applicable legal and regulatory requirements; unexpected concerns that may arise as a result of the occurrence of adverse safety events or additional data analyses of clinical trials evaluating cabozantinib, zanzalintinib and other Exelixis product candidates; Exelixis’ dependence on third-party vendors for the development, manufacture and supply of its products and product candidates; Exelixis’ ability to protect its intellectual property rights; market competition, including the potential for competitors to obtain approval for generic versions of Exelixis’ marketed products; changes in economic and business conditions, including as a result of changing trade policies and tariffs and the related uncertainty thereof; and other factors detailed from time to time under the caption “Risk Factors” in Exelixis’ most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and in Exelixis’ other future filings with the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Exelixis as of the date of this press release, and Exelixis undertakes no obligation to update or revise any forward-looking statements contained herein, except as required by law. Exelixis, the Exelixis logo, CABOMETYX and COMETRIQ are registered U.S. trademarks of Exelixis, Inc. TECENTRIQ (atezolizumab) is a registered trademark of Genentech, a member of the Roche Group. WELIREG®, KEYTRUDA QLEX™ and KEYTRUDA SC™ are registered trademarks of Merck Sharp & Dohme LLC, a subsidiary of Merck & Co., Inc., Rahway, N.J., USA. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804452015/en/ Chris Senner Chief Financial Officer Exelixis, Inc. 650-837-7240 csenner@exelixis.com Andrew Peters SVP, Strategy & Investor Relations Exelixis, Inc. 650-837-7248 apeters@exelixis.com Source: Exelixis, Inc.

Total Worldwide Sales Were $16.6 Billion (5% Growth; 4% Growth ex-FX) KEYTRUDA/KEYTRUDA QLEX 1 Sales Were $8.4 Billion (5% Growth; 4% Growth ex-FX); Includes KEYTRUDA QLEX Sales of $463 Million WINREVAIR Sales Were $588 Million (75% Growth; 75% Growth ex-FX) Animal Health Sales Were $1.8 Billion (8% Growth; 5% Growth ex-FX) KEYTRUDA/KEYTRUDA QLEX 1 Sales Were $8.4 Billion (5% Growth; 4% Growth ex-FX); Includes KEYTRUDA QLEX Sales of $463 Million WINREVAIR Sales Were $588 Million (75% Growth; 75% Growth ex-FX) Animal Health Sales Were $1.8 Billion (8% Growth; 5% Growth ex-FX) GAAP Loss per Share Was $0.54; Non-GAAP Loss per Share Was $0.13; GAAP and Non-GAAP Loss per Share Include a Charge of $2.31 per Share for the Acquisition of Terns Received U.S. FDA Approval for LIPFENDRA (enlicitide), the First and Only Once-Daily Oral PCSK9 Inhibitor To Reduce LDL-C in Adults With Hypercholesterolemia Announced Positive Data From TroFuse-005 Trial Evaluating Sacituzumab Tirumotecan (sac-TMT) in Certain Patients With Advanced or Recurrent Endometrial Cancer Announced Positive Phase 3 Results From Once-Weekly Investigational Oral HIV Treatment Regimen of Islatravir and Lenacapavir, in Collaboration With Gilead Narrows and Raises Expected Worldwide Sales Range To Be Between $66.3 Billion and $67.3 Billion Now Expects Non-GAAP EPS To Be Between $2.66 and $2.76; Outlook Includes Charges of $2.43 per Share for the Acquisition of Terns, Comprised of a One-Time Charge of $2.31 per Share as Well as Costs of Approximately $0.12 per Share To Finance the Acquisition and Advance MK-4208 (Formerly TERN-701) RAHWAY, N.J.--(BUSINESS WIRE)--Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2026. “We continued to make substantial progress across our business this quarter, driven by strong execution and growing contributions from new product launches,” said Robert M. Davis, chairman and chief executive officer. “The FDA approval of LIPFENDRA is an exciting moment for our company and for patients, marking the latest milestone in our nearly 70-year legacy in cardiovascular disease. Together with key regulatory and clinical advances across oncology, HIV and immunology, this achievement reflects the strength of our pipeline and portfolio transformation as we bring forward the next wave of innovation. I am confident in the ongoing execution of our strategy as we deliver for patients and further enhance our long-term growth trajectory.” Financial Summary $ in millions, except EPS amounts Second Quarter 2026 2025 Change Change Ex- Exchange Sales $16,607 $15,806 5% 4% GAAP net (loss) income2 (1,335) 4,427 N/M N/M Non-GAAP net (loss) income that excludes certain items2,3* (330) 5,366 N/M N/M GAAP EPS (0.54) 1.76 N/M N/M Non-GAAP EPS that excludes certain items3* (0.13) 2.13 N/M N/M *Refer to table on page 7. N/M - Not meaningful For the second quarter of 2026, Generally Accepted Accounting Principles (GAAP) loss / earnings per share (EPS) assuming dilution was a loss per share of $0.54 and non-GAAP loss per share was $0.13. Both the GAAP and non-GAAP loss per share were due to a charge for the acquisition of Terns Pharmaceuticals, Inc. (Terns) of $2.31 per share. Both GAAP and non-GAAP EPS in the second quarter of 2025 include a charge of $0.07 per share for an upfront payment related to a license agreement with Jiangsu Hengrui Pharmaceutical Co., Ltd. (Hengrui Pharma). Non-GAAP EPS excludes acquisition- and divestiture-related costs and costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the second quarter of 2025 also excludes tax benefits primarily resulting from favorable audit reserve adjustments. Year-to-date results can be found in the attached tables. Second-Quarter Sales Performance The following table reflects sales of the Company’s top products and significant performance drivers. Second Quarter $ in millions 2026 2025 Change Change Ex-Exchange Commentary Total Sales $16,607 $15,806 5% 4% Pharmaceutical 14,760 14,050 5% 4% Increase primarily driven by growth in oncology as well as cardiometabolic and respiratory, partially offset by a decline in diabetes. KEYTRUDA/ KEYTRUDA QLEX 8,366 7,956 5% 4% Growth primarily driven by strong global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC), cervical cancer, head and neck cancer and bladder cancer, as well as higher global demand in metastatic indications, including urothelial cancer. Sales of KEYTRUDA QLEX were $463 million. GARDASIL/ GARDASIL 9 1,169 1,126 4% 3% Increase primarily due to higher demand in Asia Pacific and Europe, as well as favorable timing of tenders in Europe, partially offset by lower demand in certain other international markets. PROQUAD, M-M-R II and VARIVAX 592 609 -3% -3% Decrease primarily reflects lower demand in the U.S., partially offset by higher net pricing in the U.S., higher demand in Europe and favorable private-sector purchasing patterns for M-M-R II in the U.S. WINREVAIR 588 336 75% 75% Growth primarily reflects continued uptake in the U.S. and early launch uptake in certain international markets, particularly in Japan and Europe. BRIDION 497 461 8% 8% Growth primarily due to higher demand and net pricing in the U.S. JANUVIA/JANUMET 429 623 -31% -31% Decline primarily due to lower demand and net pricing in the U.S. due to competition, as well as lower demand in China and most other international markets due to ongoing generic competition. Lynparza* 365 370 -1% -2% Relatively flat compared with prior year. PREVYMIS 295 228 29% 28% Increase primarily due to higher demand in the U.S. and certain European markets, reflecting in part the launch of new indications. Lenvima* 283 265 7% 6% Growth primarily due to higher demand in the U.S., partially offset by lower net pricing. WELIREG 271 162 67% 67% Growth primarily driven by higher demand in the U.S. and continued launch uptake in several international markets, particularly in Japan, as well as favorable wholesaler purchasing patterns in the U.S. OHTUVAYRE 204 - - - Product obtained as part of the Company’s October 2025 acquisition of Verona Pharma plc. Includes a benefit from the timing of specialty pharmacy purchases in the U.S. CAPVAXIVE 184 129 42% 40% Increase primarily driven by launch uptake in several international markets, particularly in Asia Pacific and Europe, as well as in the U.S. VAXNEUVANCE 148 229 -35% -36% Decline primarily due to favorable prior period public-sector activity in the U.S., which increased sales in that period, as well as lower demand in the U.S. and in most international markets in the current period due to competitive pressure. LAGEVRIO 5 83 -95% -95% Decline largely due to lower demand in Japan and the U.S. Animal Health 1,775 1,646 8% 5% Growth attributable to both Livestock and Companion Animal product portfolios. Livestock 1,041 961 8% 6% Growth primarily driven by higher demand for ruminant and poultry products. Companion Animal 734 685 7% 5% Growth primarily due to new product launches. Sales of BRAVECTO line of products were $359 million and $335 million in the current and prior-year quarters, respectively, which represents an increase of 7%, or 4% excluding impact of foreign exchange. Other Revenues** 72 110 -35% -34% Decline primarily due to lower revenue from third-party manufacturing arrangements. *Alliance revenue for this product represents the Company’s share of profits, which are product sales net of cost of sales and commercialization costs. **Other revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Second-Quarter Expense and Related Information The table below presents selected expense information. $ in millions GAAP Acquisition- and Divestiture- Related Costs4 Restructuring Costs (Income) Loss From Investments in Equity Securities Non- GAAP3 Second Quarter 2026 Cost of sales $4,395 $1,067 $184 $- $3,144 Selling, general and administrative 2,904 17 - - 2,887 Research and development 9,741 6 (1) - 9,736 Restructuring costs 151 - 151 - - Other (income) expense, net 99 - - (191) 290 Second Quarter 2025 Cost of sales $3,557 $576 $165 $- $2,816 Selling, general and administrative 2,649 15 1 - 2,633 Research and development 4,048 3 53 - 3,992 Restructuring costs 560 - 560 - - Other (income) expense, net (7) - - (61) 54 GAAP Expense, EPS and Related Information Gross margin was 73.5% for the second quarter of 2026 compared with 77.5% for the second quarter of 2025. The decrease was primarily due to higher amortization of intangible assets and inventory write-downs. Selling, general and administrative (SG&A) expenses were $2.9 billion in the second quarter of 2026, an increase of 10% compared with the second quarter of 2025. The increase was primarily due to higher administrative costs (including investments in IT), as well as higher promotional costs in support of product launches. Research and development (R&D) expenses were $9.7 billion in the second quarter of 2026 compared with $4.0 billion in the second quarter of 2025. The increase was largely due to a $5.7 billion charge for the acquisition of Terns and higher clinical development spending, partially offset by a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone Life Sciences (Blackstone). R&D expenses in the second quarter of 2025 include a $200 million charge for an upfront payment related to a license agreement with Hengrui Pharma. Other (income) expense, net, was $99 million of expense in the second quarter of 2026 compared with $7 million of income in the second quarter of 2025. The unfavorability was primarily due to higher net interest expense, partially offset by higher net income from investments in equity securities. The income tax provision for the second quarter of 2026 was $654 million on a pretax loss of $683 million, resulting in an effective income tax rate of (95.9)%. This effective income tax rate includes a 108.9 percentage point unfavorable impact of the charge for the acquisition of Terns, for which no tax benefit was recorded. GAAP loss per share was $0.54 for the second quarter of 2026 compared with earnings per share of $1.76 for the second quarter of 2025, largely due to higher charges for business development transactions, reflecting a $2.31 per share charge in the second quarter of 2026 for the acquisition of Terns compared with a $0.07 per share charge in the second quarter of 2025 related to a license agreement with Hengrui Pharma. Non-GAAP Expense, EPS and Related Information Non-GAAP gross margin was 81.1% for the second quarter of 2026 compared with 82.2% for the second quarter of 2025. The decrease was primarily due to higher inventory write-downs. Non-GAAP SG&A expenses were $2.9 billion in the second quarter of 2026, an increase of 10% compared with the second quarter of 2025. The increase was primarily due to higher administrative costs (including investments in IT), as well as higher promotional costs in support of product launches. Non-GAAP R&D expenses were $9.7 billion in the second quarter of 2026 compared with $4.0 billion in the second quarter of 2025. The increase was largely due to a $5.7 billion charge for the acquisition of Terns and higher clinical development spending, partially offset by a $200 million reduction in R&D expenses as part of a funding agreement with Blackstone. R&D expenses in the second quarter of 2025 include a $200 million charge for an upfront payment related to a license agreement with Hengrui Pharma. Non-GAAP other (income) expense, net, was $290 million of expense in the second quarter of 2026 compared with $54 million of expense in the second quarter of 2025. The unfavorability was primarily due to higher net interest expense. The non-GAAP income tax provision for the second quarter of 2026 was $882 million on pretax income of $550 million, resulting in a non-GAAP effective income tax rate of 160.3%. This effective income tax rate includes a 146.2 percentage point unfavorable impact of the charge for the acquisition of Terns, for which no tax benefit was recorded. Non-GAAP loss per share was $0.13 for the second quarter of 2026 compared with earnings per share of $2.13 for the second quarter of 2025, largely due to higher charges for business development transactions, reflecting a $2.31 per share charge in the second quarter of 2026 for the acquisition of Terns compared with a $0.07 per share charge in the second quarter of 2025 related to a license agreement with Hengrui Pharma. A reconciliation of GAAP to non-GAAP net (loss) income and EPS is provided in the table that follows. Second Quarter $ in millions, except EPS amounts 2026 2025 EPS GAAP EPS $(0.54) $1.76 Difference 0.41 0.37 Non-GAAP EPS that excludes items listed below3 $(0.13) $2.13 Net (Loss) Income GAAP net (loss) income2 $(1,335) $4,427 Difference 1,005 939 Non-GAAP net (loss) income that excludes items listed below2,3 $(330) $5,366 Excluded Items: Acquisition- and divestiture-related costs4 $1,090 $594 Restructuring costs 334 779 Income from investments in equity securities (191) (61) Increase to net loss / decrease to net income before taxes 1,233 1,312 Estimated income tax benefit5 (228) (373) Increase to net loss / decrease to net income $1,005 $939 Pipeline and Portfolio Highlights In the second quarter, the Company achieved key regulatory milestones across the portfolio while continuing to advance its broad and diverse pipeline. Oncology: U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, each with WELIREG, for the adjuvant treatment of certain patients with clear cell renal cell carcinoma (ccRCC), based on Phase 3 LITESPARK-022 trial. Approvals represent first approved combination of a PD-1 and hypoxia-inducible factor-2 alpha inhibitor for these patients. In July, FDA approved expanded use of KEYTRUDA and KEYTRUDA QLEX, each with Padcev, as treatment before and after surgery for adult patients with muscle-invasive bladder cancer (MIBC), including cisplatin eligible patients based on Phase 3 KEYNOTE-B15 trial; the expansion builds upon prior approval of this regimen for cisplatin ineligible patients based on Phase 3 KEYNOTE-905 trial. FDA approved KEYTRUDA and KEYTRUDA QLEX, each with Trodelvy, for the first-line treatment of PD-L1 positive (Combined Positive Score [CPS] ≥10) advanced TNBC, based on Phase 3 KEYNOTE-D19/ASCENT-04 trial. FDA granted Breakthrough Therapy designation (BTD) for calderasib (MK-1084), an investigational oral specific KRAS G12C inhibitor, in combination with KEYTRUDA, for the first-line treatment of patients with advanced or metastatic non-small cell lung cancer (NSCLC) with KRAS G12C-mutation and expressing PD-L1 (tumor proportion score [TPS] ≥1%). Announced that Phase 3 TroFuse-005 trial evaluating sac-TMT, an investigational anti-TROP2 antibody-drug conjugate (ADC) being developed in collaboration with Kelun-Biotech, met its primary endpoints of overall survival (OS) and progression-free survival (PFS) in patients with advanced or recurrent endometrial cancer who have progressed after platinum-based chemotherapy and anti-PD-1/L1 immunotherapy. First Phase 3 results from the Company’s broad sac-TMT clinical development program, which includes 17 ongoing global Phase 3 trials across multiple tumor types. At the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting, new research was presented across over 25 types of cancer, reinforcing long-term impact of KEYTRUDA and momentum in the Company’s rapidly advancing oncology pipeline, including: Five-year follow-up data from Phase 2b KEYNOTE-942 trial, in collaboration with Moderna, underscoring continued potential of intismeran autogene (mRNA-4157/V940) in combination with KEYTRUDA for patients with stage III/IV melanoma following complete resection. Data from Phase 3 OptiTROP-Lung05 trial, led by Kelun-Biotech, evaluating sac-TMT plus KEYTRUDA in China, adding to ongoing research of novel treatment approaches for patients with NSCLC. Results from final analysis of KEYNOTE-522 evaluating KEYTRUDA in combination with chemotherapy, reporting a continued survival benefit for patients with high-risk early-stage TNBC. U.S. Food and Drug Administration (FDA) approved KEYTRUDA and KEYTRUDA QLEX, each with WELIREG, for the adjuvant treatment of certain patients with clear cell renal cell carcinoma (ccRCC), based on Phase 3 LITESPARK-022 trial. Approvals represent first approved combination of a PD-1 and hypoxia-inducible factor-2 alpha inhibitor for these patients. In July, FDA approved expanded use of KEYTRUDA and KEYTRUDA QLEX, each with Padcev, as treatment before and after surgery for adult patients with muscle-invasive bladder cancer (MIBC), including cisplatin eligible patients based on Phase 3 KEYNOTE-B15 trial; the expansion builds upon prior approval of this regimen for cisplatin ineligible patients based on Phase 3 KEYNOTE-905 trial. FDA approved KEYTRUDA and KEYTRUDA QLEX, each with Trodelvy, for the first-line treatment of PD-L1 positive (Combined Positive Score [CPS] ≥10) advanced TNBC, based on Phase 3 KEYNOTE-D19/ASCENT-04 trial. FDA granted Breakthrough Therapy designation (BTD) for calderasib (MK-1084), an investigational oral specific KRAS G12C inhibitor, in combination with KEYTRUDA, for the first-line treatment of patients with advanced or metastatic non-small cell lung cancer (NSCLC) with KRAS G12C-mutation and expressing PD-L1 (tumor proportion score [TPS] ≥1%). Announced that Phase 3 TroFuse-005 trial evaluating sac-TMT, an investigational anti-TROP2 antibody-drug conjugate (ADC) being developed in collaboration with Kelun-Biotech, met its primary endpoints of overall survival (OS) and progression-free survival (PFS) in patients with advanced or recurrent endometrial cancer who have progressed after platinum-based chemotherapy and anti-PD-1/L1 immunotherapy. First Phase 3 results from the Company’s broad sac-TMT clinical development program, which includes 17 ongoing global Phase 3 trials across multiple tumor types. At the 2026 American Society of Clinical Oncology (ASCO) Annual Meeting, new research was presented across over 25 types of cancer, reinforcing long-term impact of KEYTRUDA and momentum in the Company’s rapidly advancing oncology pipeline, including: Five-year follow-up data from Phase 2b KEYNOTE-942 trial, in collaboration with Moderna, underscoring continued potential of intismeran autogene (mRNA-4157/V940) in combination with KEYTRUDA for patients with stage III/IV melanoma following complete resection. Data from Phase 3 OptiTROP-Lung05 trial, led by Kelun-Biotech, evaluating sac-TMT plus KEYTRUDA in China, adding to ongoing research of novel treatment approaches for patients with NSCLC. Results from final analysis of KEYNOTE-522 evaluating KEYTRUDA in combination with chemotherapy, reporting a continued survival benefit for patients with high-risk early-stage TNBC. Vaccines and Infectious Diseases: In July, presented new data for daily and weekly options across HIV treatment and prevention pipeline at 26 th International AIDS Conference (AIDS 2026). Hosted HIV investor event to highlight these data. In collaboration with Gilead, presented first Phase 3 results for islatravir/lenacapavir (ISL/LEN), an investigational oral once-weekly single-tablet HIV treatment regimen, which maintained virological suppression in adults with HIV who switched antiretroviral therapy. ISL/LEN has the potential to be the first approved oral, once-weekly HIV treatment. Presented first results from a Phase 2b study evaluating switch to investigational once-weekly oral islatravir and ulonivirine (ISL/ULO) in adults with virologically suppressed HIV-1. Received regulatory approvals in Japan and China for ENFLONSIA for the prevention of RSV lower respiratory tract disease in newborns and infants who are born during or entering their first RSV season. In July, presented new data for daily and weekly options across HIV treatment and prevention pipeline at 26 th International AIDS Conference (AIDS 2026). Hosted HIV investor event to highlight these data. In collaboration with Gilead, presented first Phase 3 results for islatravir/lenacapavir (ISL/LEN), an investigational oral once-weekly single-tablet HIV treatment regimen, which maintained virological suppression in adults with HIV who switched antiretroviral therapy. ISL/LEN has the potential to be the first approved oral, once-weekly HIV treatment. Presented first results from a Phase 2b study evaluating switch to investigational once-weekly oral islatravir and ulonivirine (ISL/ULO) in adults with virologically suppressed HIV-1. Received regulatory approvals in Japan and China for ENFLONSIA for the prevention of RSV lower respiratory tract disease in newborns and infants who are born during or entering their first RSV season. Cardiometabolic and Respiratory: In July, FDA approved LIPFENDRA (enlicitide), the first and only once-daily oral PCSK9 inhibitor, as an adjunct to diet and exercise, to reduce LDL-C in adults with hypercholesterolemia, based on two Phase 3 trials from the CORALreef clinical program: CORALreef Lipids and CORALreef HeFH. At week 24, LIPFENDRA significantly reduced LDL-C by a placebo-adjusted 56% and 59%, respectively. In July, FDA approved LIPFENDRA (enlicitide), the first and only once-daily oral PCSK9 inhibitor, as an adjunct to diet and exercise, to reduce LDL-C in adults with hypercholesterolemia, based on two Phase 3 trials from the CORALreef clinical program: CORALreef Lipids and CORALreef HeFH. At week 24, LIPFENDRA significantly reduced LDL-C by a placebo-adjusted 56% and 59%, respectively. Immunology: Announced positive topline results from Phase 3 ATLAS-UC induction-only study (Study 2) evaluating tulisokibart (MK-7240), an investigational humanized monoclonal antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active ulcerative colitis (UC). Initial topline results from primary analyses of two Phase 2 studies evaluating tulisokibart: In hidradenitis suppurativa (HS), the study met its primary and key secondary endpoints. Full results will be shared at an upcoming medical meeting. In systemic sclerosis-associated interstitial lung disease (SSc-ILD), the study did not meet its primary endpoint and will be discontinued. No new safety concerns were identified. Announced positive topline results from Phase 3 ATLAS-UC induction-only study (Study 2) evaluating tulisokibart (MK-7240), an investigational humanized monoclonal antibody targeting tumor necrosis factor-like cytokine 1A (TL1A), in patients with moderately to severely active ulcerative colitis (UC). Initial topline results from primary analyses of two Phase 2 studies evaluating tulisokibart: In hidradenitis suppurativa (HS), the study met its primary and key secondary endpoints. Full results will be shared at an upcoming medical meeting. In systemic sclerosis-associated interstitial lung disease (SSc-ILD), the study did not meet its primary endpoint and will be discontinued. No new safety concerns were identified. Business Development: Completed acquisition of Terns for $6.8 billion. Added MK-4208, a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor recently granted BTD by the FDA for the treatment of certain adults with Philadelphia chromosome-positive chronic myeloid leukemia. Completed acquisition of Terns for $6.8 billion. Added MK-4208, a novel investigational oral allosteric BCR::ABL1 tyrosine kinase inhibitor recently granted BTD by the FDA for the treatment of certain adults with Philadelphia chromosome-positive chronic myeloid leukemia. Notable recent news releases on the Company’s pipeline and portfolio are provided in the table that follows. Visit the News Releases section of the Company’s website to read the releases.* Oncology FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With WELIREG, for Adjuvant Treatment of Certain Patients With ccRCC; Based on Results From Phase 3 LITESPARK-022 Trial FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With Padcev, as Treatment Before and After Surgery for Adults With MIBC; Based on Results From Phase 3 KEYNOTE-B15 Trial, Combined With Previous Approvals Based on Phase 3 KEYNOTE-905 Trial FDA Approved KEYTRUDA and KEYTRUDA QLEX, Each With Trodelvy, as First-Line Treatment of PD-L1+ Advanced TNBC; Based on Results From Phase 3 KEYNOTE-D19/ASCENT-04 Trial European Commission Approved KEYTRUDA Plus Padcev as First PD-1 Inhibitor Plus ADC Regimen for Adults With Cisplatin-Ineligible Resectable MIBC; Based on Results From Phase 3 KEYNOTE-905 Trial FDA Granted BTD for Calderasib (MK-1084), an Investigational KRAS G12C Inhibitor, for Certain Patients With Newly Diagnosed Metastatic KRAS G12C-Mutant NSCLC The Company Announced TroFuse-005 Trial Evaluating Sac-TMT Met Primary Endpoints of OS and PFS in Certain Patients With Advanced or Recurrent Endometrial Cancer The Company and Moderna Presented 5-Year Data for Intismeran Autogene in Combination With KEYTRUDA in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection at ASCO 2026 KEYTRUDA as Monotherapy Significantly Improved PFS in Certain Patients With Advanced or Recurrent Endometrial Cancer With Mismatch Repair Deficient Tumors Compared to Chemotherapy; Results From Phase 3 KEYNOTE-C93 Trial The Company Highlighted New Long-Term Data and Advancements Across Broad Oncology Portfolio and Pipeline Research at ASCO 2026 The Company Completed Acquisition of Terns Vaccines and Infectious Diseases The Company, in Collaboration With Gilead, Announced That the Once-Weekly Investigational Oral HIV Treatment Regimen of Islatravir and Lenacapavir (ISL/LEN) Maintained Virological Suppression in People With HIV Who Switched Antiretroviral Therapy The Company Presented New Data on Daily, Weekly and Monthly Options Across its HIV Treatment and Prevention Pipeline at AIDS 2026 The Company Announced Initial Access Plans for Alimatravir (MK-8527), Its Investigational Once-Monthly Oral Pre-Exposure Prophylaxis in Phase 3 Development; Multi-Faceted Strategy Aims To Enable Rapid, Broad and Sustainable Access to Alimatravir, if Approved, in Low- And Middle-Income Countries The Company Announced New Agreement With AIDS Drug Assistance Program Crisis Task Force To Improve Access and Care for People Living With HIV FDA Approved an Additional Indication for CAPVAXIVE in Children and Adolescents Aged 2 Through 17 at Increased Risk for Pneumococcal Disease; Based on Results From Phase 3 STRIDE-13 Trial Cardiometabolic and Respiratory FDA Approved LIPFENDRA, the First and Only Once-Daily Oral PCSK9 Inhibitor To Reduce LDL-C in Adults With Hypercholesterolemia; Based on Results From CORALreef Lipids and CORALreef HeFH Trials Immunology Tulisokibart Met Primary and Key Secondary Endpoints in the Phase 3 ATLAS-UC Induction-only Study in Patients With Moderately to Severely Active UC Animal Health The Company’s Animal Health Business Completed Acquisition of TARGAN, Broadening Its Commercial Poultry Portfolio Through TARGAN’s Innovative High-Speed Biodevice Technology *References in the above news release titles have been modified for the purpose of this announcement. Upcoming Investor Event The Company will hold an Oncology Investor Event to coincide with the European Society for Medical Oncology Congress 2026 on Monday, Oct. 26, 2026, at 6 p.m. CET / 1 p.m. EDT, during which senior management will provide an update on the Company’s oncology strategy and program. The event will take place in Madrid, Spain, and will be accessible via live audio webcast at this weblink. Full-Year 2026 Financial Outlook The following table summarizes the Company’s full-year financial outlook. Full Year 2026 Updated Prior Sales* $66.3 billion to $67.3 billion $65.8 billion to $67.0 billion Non-GAAP Gross margin3 Approximately 81% Approximately 82% Non-GAAP Operating expenses3** $42.0 billion to $42.7 billion $36.0 billion to $36.8 billion Non-GAAP Other (income) expense, net3 Approximately $1.4 billion expense Approximately $1.3 billion expense Non-GAAP Effective income tax rate3 35.0% to 36.0% 23.5% to 24.5% Non-GAAP EPS3*** $2.66 to $2.76 $5.04 to $5.16 Share count (assuming dilution) Approximately 2.48 billion Approximately 2.48 billion *The Company does not have any non-GAAP adjustments to sales. **Includes one-time R&D charges of $9.0 billion for the acquisition of Cidara Therapeutics, Inc. (Cidara) and $5.7 billion for the acquisition of Terns. Outlook does not assume any additional significant potential business development transactions. ***Includes one-time charges of $3.62 per share for the acquisition of Cidara and $2.31 per share for the acquisition of Terns. The Company has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective income tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and income and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are inherently difficult to forecast and could have a significant impact on the Company’s future GAAP results. The Company is raising and narrowing the range for its full-year sales outlook and now anticipates full-year 2026 sales to be between $66.3 billion and $67.3 billion, including a positive impact from foreign exchange of approximately 1% at mid-July 2026 exchange rates. The Company now expects the full-year non-GAAP effective income tax rate to be between 35.0% and 36.0%, including the impact of the non-tax deductible one-time charges for the acquisitions of Cidara and Terns. The Company now expects full-year 2026 non-GAAP EPS to be between $2.66 and $2.76, including a positive impact from foreign exchange of approximately $0.15 per share at mid-July 2026 exchange rates. This range includes one-time charges of $9.0 billion, or $3.62 per share, related to the acquisition of Cidara and $5.7 billion, or $2.31 per share, related to the acquisition of Terns. This range also includes costs of approximately $0.12 per share to finance the Terns acquisition and advance MK-4208. The charges related to Terns were not previously included in the outlook. In 2025, non-GAAP EPS of $8.98 was negatively impacted by one-time charges of $0.20 per share in the aggregate related to certain business development transactions. Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions. Earnings Conference Call Investors, journalists and the general public may access a live audio webcast of the call on Tuesday, Aug. 4, at 9 a.m. EDT via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures and slides highlighting the results, will be available on the Company’s website. All participants may join the call by dialing (800) 369-3351 (U.S. and Canada Toll-Free) or (517) 308-9448 and using the access code 9818590. About Our Company At Merck & Co., Inc., Rahway, N.J., USA, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA This news release of Merck & Co., Inc., Rahway, N.J., USA (the “Company”) includes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline candidates that the candidates 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; the Company’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 the Company’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. The Company 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and the Company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov). Appendix Generic product names are provided below. Pharmaceutical BRIDION (sugammadex) CAPVAXIVE (Pneumococcal 21-valent Conjugate Vaccine) ENFLONSIA (clesrovimab-cfor) GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) JANUMET (sitagliptin and metformin HCl) JANUVIA (sitagliptin) KEYTRUDA (pembrolizumab) KEYTRUDA QLEX (pembrolizumab and berahyaluronidase alfa-pmph) LAGEVRIO (molnupiravir) Lenvima (lenvatinib) LIPFENDRA (enlicitide) Lynparza (olaparib) M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live) OHTUVAYRE (ensifentrine) PREVYMIS (letermovir) PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live) VARIVAX (Varicella Virus Vaccine Live) VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine) WELIREG (belzutifan) WINREVAIR (sotatercept-csrk) Animal Health BRAVECTO (fluralaner) 1 Available in some markets as KEYTRUDA SC. 2 Net (loss) income attributable to the Company. 3 The Company is providing certain 2026 and 2025 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the Company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the Company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release. 4 Reflects expenses related to business combinations, including the amortization of intangible assets, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations, licensing arrangements and asset acquisitions, and recognition of fair value step-up to inventories for asset acquisitions. 5 Includes the estimated income tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments for all periods presented. Amount in the second quarter of 2025 also includes a $146 million benefit primarily resulting from favorable audit reserve adjustments. GAAP 2Q26 2Q25 $ 16,607 $ 15,806 5% $ 32,893 $ 31,335 5% 4,395 3,557 24% 8,590 6,976 23% 2,904 2,649 10% 5,604 5,202 8% 9,741 4,048 * 22,333 7,669 * 151 560 -73% 346 629 -45% 99 (7 ) * 237 (43 ) * (683 ) 4,999 * (4,217 ) 10,902 * 654 571 1,363 1,388 (1,337 ) 4,428 * (5,580 ) 9,514 * (2 ) 1 (5 ) 8 $ (1,335 ) $ 4,427 * $ (5,575 ) $ 9,506 * $ (0.54 ) $ 1.76 * $ (2.26 ) $ 3.77 * 2,470 2,513 2,471 2,522 -95.9 % 11.4 % -32.3 % 12.7 % $ 4,395 1,067 184 1,251 $ 3,144 2,904 17 17 2,887 9,741 6 (1 ) 5 9,736 151 151 151 – 99 (191 ) (191 ) 290 (683 ) (1,090 ) (334 ) 191 (1,233 ) 550 654 (219 ) (3) (50 ) (3) 41 (3) (228 ) 882 (1,337 ) (871 ) (284 ) 150 (1,005 ) (332 ) (1,335 ) (871 ) (284 ) 150 (1,005 ) (330 ) $ (0.54 ) (0.35 ) (0.12 ) 0.06 (0.41 ) $ (0.13 ) -95.9 % 160.3 % $ 8,590 2,081 421 2,502 $ 6,088 5,604 49 49 5,555 22,333 6 33 39 22,294 346 346 346 – 237 (371 ) (371 ) 608 (4,217 ) (2,136 ) (800 ) 371 (2,565 ) (1,652 ) 1,363 (421 ) (3) (135 ) (3) 80 (3) (476 ) 1,839 (5,580 ) (1,715 ) (665 ) 291 (2,089 ) (3,491 ) (5,575 ) (1,715 ) (665 ) 291 (2,089 ) (3,486 ) $ (2.26 ) (0.70 ) (0.27 ) 0.12 (0.85 ) $ (1.41 ) -32.3 % -111.3 % 2026 2025 2Q June YTD 1Q 2Q June YTD 1Q 2Q June YTD 3Q 4Q Full Year Nom % Ex-Exch % Nom % Ex-Exch % $16,286 $16,607 $32,893 $15,529 $15,806 $31,335 $17,276 $16,400 $65,011 5 4 5 3 14,349 14,760 29,109 13,638 14,050 27,688 15,611 14,843 58,142 5 4 5 3 7,906 7,904 15,810 7,205 7,956 15,161 8,142 8,337 31,641 -1 -2 4 2 128 463 590 5 35 40 - - - - 341 365 706 312 370 682 379 389 1,450 -1 -2 4 2 256 283 539 258 265 523 258 272 1,053 7 6 3 2 199 271 470 137 162 300 196 220 716 67 67 57 56 148 122 270 119 107 226 136 164 525 15 15 20 20 1,069 1,169 2,238 1,327 1,126 2,453 1,749 1,031 5,233 4 3 -9 -10 538 592 1,130 539 609 1,148 684 619 2,451 -3 -3 -2 -3 202 148 350 230 229 459 226 140 825 -35 -36 -24 -26 206 134 340 228 121 349 204 119 673 10 9 -3 -4 142 184 325 107 129 236 244 279 759 42 40 38 36 1 2 3 79 21 100 - - - - 525 588 1,114 280 336 615 360 467 1,443 75 75 81 81 131 204 335 178 178 - - - - 109 126 235 106 123 229 112 129 470 3 3 3 3 78 78 156 68 80 147 82 83 312 -2 -4 6 1 472 497 969 441 461 902 439 499 1,841 8 8 7 7 272 295 568 208 228 436 266 275 978 29 28 30 27 75 101 176 67 83 150 77 79 306 21 17 17 10 82 77 159 70 74 145 81 87 312 4 2 10 8 59 60 119 90 86 176 82 67 325 -30 -31 -32 -33 34 22 56 83 96 179 43 25 247 -77 -77 -69 -69 28 5 32 102 83 185 138 57 380 -95 -95 -82 -83 367 258 625 549 372 921 382 302 1,604 -31 -30 -32 -32 207 171 378 247 251 498 243 199 940 -32 -33 -24 -25 774 641 1,416 865 703 1,568 1,004 770 3,340 -9 -9 -10 -11 1,791 1,775 3,566 1,588 1,646 3,234 1,615 1,505 6,354 8 5 10 6 1,064 1,041 2,105 924 961 1,885 1,023 987 3,896 8 6 12 7 727 734 1,461 664 685 1,349 592 518 2,458 7 5 8 4 146 72 218 303 110 413 50 52 515 -35 -34 -47 -6