Xevinapant

Disclosure of inside information pursuant to Article 17 of Regulation (EU) No 596/2014 Darmstadt, Germany, July 26, 2024 – Based on a very strong second quarter of 2024 with net sales of EUR 5.352 bn resulting in an EBITDA pre1 of EUR 1.509 bn and an EPS pre1 of EUR 2.20, Merck KGaA, Darmstadt, Germany, (the "Company") has raised its guidance for the entire group for fiscal 2024.  The main driver is a very strong operating performance of Healthcare and Electronics compared to consensus. The performance of Life Science is within expectations. The strong operating performance of Healthcare more than offset the provision equal to a mid-double-digit million euro amount associated with xevinapant. The Company now projects net sales of approx. EUR 20.7 - 22.1 bn (previously EUR 20.6 – 22.1 bn). EBITDA pre1 is anticipated to grow to approx. EUR 5.8 – 6.4 bn for the Group (previously "EUR 5.7 – 6.3 bn"). EPS pre1 is projected to amount to approx. EUR 8.20 – 9.30 (previously "EUR 8.05 – 9.10"). The Company will publish Q2 / 2024 figures as scheduled on 1 August 2024. 1 EBITDA pre and EPS pre are alternative performance measures not defined by international accounting standards, used by the Company to improve the comparability of business performance over time and within the industry. EBITDA pre means earnings before interest, income tax, depreciation and amortization as well as adjustments ( Ergebnis vor Zinsen, Ertragsteuern, Abschreibungen und Anpassungen ). EPS pre means profit after tax including adjustments per theoretical shares outstanding (see Merck KGaA, Darmstadt, Germany, Annual Report 2023). About Merck KGaA, Darmstadt, Germany Merck KGaA, Darmstadt, Germany, a leading science and technology company, operates across life science, healthcare and electronics. Around 63,000 employees work to make a positive difference to millions of people’s lives every day by creating more joyful and sustainable ways to live. From providing products and services that accelerate drug development and manufacturing as well as discovering unique ways to treat the most challenging diseases to enabling the intelligence of devices – the company is everywhere. In 2023, Merck KGaA, Darmstadt, Germany, generated sales of € 21 billion in 65 countries. The company holds the global rights to the name and trademark “Merck” internationally. The only exceptions are the United States and Canada, where the business sectors of Merck KGaA, Darmstadt, Germany, operate as MilliporeSigma in life science, EMD Serono in healthcare and EMD Electronics in electronics. Since its founding in 1668, scientific exploration and responsible entrepreneurship have been key to the company’s technological and scientific advances. To this day, the founding family remains the majority owner of the publicly listed company. All Merck KGaA, Darmstadt, Germany, press releases are distributed by e-mail at the same time they become available on the EMD Group website. In case you are a resident of the USA or Canada, please go to www.emdgroup.com/subscribe to register for your online, change your selection or discontinue this service.

Merck licensed xevinapant back in 2021 via a $855 million pact with Swiss biotech Debiopharm. Just last month, Merck KGaA executives were reassuring analysts that the failure of a phase 3 trial of xevinapant was “unlikely.” Now that worst-case scenario has come to pass. The company will now halt both studies on what was once a key brick in the German pharma’s oncology wall. The TrilynX study was evaluating the apoptosis proteins inhibitor alongside chemoradiotherapy in patients with unresected locally advanced squamous cell carcinoma of the head and neck (LA SCCHN). In an earnings call with analysts in May, Merck’s Healthcare CEO Peter Guenter said “no news is good news” when it came to the upcoming pre-planned interim analysis of the study. Only when pushed by an analyst on the May 15 call did Guenter admit that there was also a “worst-case scenario” where the company would be forced to divulge that the trial was heading for failure. Merck has now confirmed the worst case in a post-market announcement yesterday, disclosing that the interim analysis has concluded that the TrilynX study is unlikely to meet its primary objective of prolonging event-free survival. The company said that LA SCCHN has “proven to be a difficult-to-treat form of cancer.” “Chemoradiotherapy has remained the standard of care for decades, despite multiple studies designed to improve outcomes with new treatment approaches, including multiple immunotherapy trials,” the company pointed out in the June 24 release. Topline safety data from the trial were “overall compatible with the chemo-radio sensitizing properties of xevinapant,” Merck added. “While we are disappointed by these results, we remain steadfast in our commitment to develop transformative medicines within our oncology portfolio for areas of high unmet need,” Danny Bar-Zohar, M.D., global head of R&D and chief medical officer for Merck’s healthcare business, said in the release. The company added that “given the totality of the data,” another trial of xevinapant will be halted—the phase 3 X-Ray Vision study in patients who have undergone resection of locally advanced head and neck cancer. Inhibitors of apoptosis proteins, in the form of xevinapant, had been one of the pillars of Merck’s oncology pipeline, alongside antibody-drug conjugates and DNA damage response (DDR) kinase inhibitors. Merck licensed xevinapant back in 2021 via a $855 million pact with Swiss biotech Debiopharm. A year later, Bar-Zohar was specifically highlighting the Debiopharm agreement as the kind of deal the company hoped to replicate. In yesterday’s release, Merck stressed that its support for the head and neck cancer community “remains steadfast” thanks to the EGFR inhibitor Erbitux, which the pharma commercializes outside of the U.S. and Canada, where it is marketed by Eli Lilly. Assessing the impact of xevinapant's failure, analysts at ODDO BHF said they had identified “blockbuster potential” in the candidate and put the drug's failure in the context of the end of Merck's evobrutinib ambitions in March. “The failure of xevinapant is clearly very negative as the drug was seen as the strongest drug pipeline candidate for the near future of the company,” the analysts wrote in a June 25 note. “The stop is a further major setback for Merck and counteracts its objective to launch a meaningful drug every 1.5 years.” Merck's stock was trading down 8% at 153.65 euros on the Frankfurt Stock Exchange as of 2:18 pm local time.