Fidaxomicin

RAHWAY, N.J.--( BUSINESS WIRE )--Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2024. “ Our business is demonstrating strong momentum as we exit the first half of the year,” said Robert M. Davis, chairman and chief executive officer, Merck. “ Through excellent scientific, commercial and operational execution, we’re achieving significant milestones for our company and for patients, including the launch of WINREVAIR. I am proud of our dedicated teams around the world that are working tirelessly to advance our deep pipeline as we continue delivering innovation that solves unmet medical needs.” Financial Summary $ in millions, except EPS amounts Second Quarter 2024 2023 Change Change Ex- Exchange Sales $16,112 $15,035 7% 11% GAAP net income (loss) 1 5,455 (5,975) N/M N/M Non-GAAP net income (loss) that excludes certain items 1,2* 5,809 (5,220) N/M N/M GAAP EPS 2.14 (2.35) N/M N/M Non-GAAP EPS that excludes certain items 2* 2.28 (2.06) N/M N/M *Refer to table on page 7. N/M – Not meaningful For the second quarter of 2024, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $2.14 and non-GAAP EPS was $2.28. GAAP and non-GAAP loss per share for the second quarter of 2023 include a charge of $4.02 per share for the acquisition of Prometheus Biosciences, Inc. (Prometheus). Non-GAAP EPS in both periods excludes acquisition- and divestiture-related costs, costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the second quarter of 2024 also excludes a tax 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. 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 2024 2023 Change Change Ex-Exchange Commentary Total Sales $16,112 $15,035 7% 11% Approximately 2 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market. Pharmaceutical 14,408 13,457 7% 11% Increase driven by growth in oncology, cardiovascular and vaccines, partially offset by declines in diabetes and virology. KEYTRUDA 7,270 6,271 16% 21% Growth driven by increased global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC) and renal cell carcinoma, as well as non-small cell lung cancer in the U.S., and continued strong global demand from metastatic indications. Approximately 4 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases. GARDASIL/GARDASIL 9 2,478 2,458 1% 4% Growth primarily due to higher sales in the U.S. driven by higher pricing, demand and public-sector buying patterns, as well as higher demand in certain ex-U.S. markets. Growth was largely offset by lower sales in China due to timing of shipments compared with prior year. JANUVIA/JANUMET 629 864 -27% -23% Decline primarily due to lower pricing and demand in the U.S., as well as ongoing generic competition in many international markets, particularly in Europe and the Asia Pacific region. PROQUAD, M-M-R II and VARIVAX 617 582 6% 7% Growth largely from higher pricing and demand in the U.S. BRIDION 455 502 -9% -8% Decline primarily due to generic competition in certain ex-U.S. markets, particularly in Europe and the Asia Pacific region, partially offset by higher demand in the U.S. Lynparza* 317 310 2% 4% Growth due to higher demand in the U.S. and certain international markets, particularly in China and Europe. Lenvima* 249 242 3% 4% Growth primarily from higher demand in the U.S. VAXNEUVANCE 189 168 13% 16% Growth largely driven by continued uptake from launches in Japan and Europe, partially offset by lower demand and public-sector buying patterns in the U.S. PREVYMIS 188 143 31% 35% Growth primarily due to higher global demand, particularly in the U.S., China and Europe. ROTATEQ 163 131 25% 26% Growth primarily due to timing of shipments to China and public-sector buying patterns in the U.S., partially offset by lower demand in the U.S. WELIREG 126 50 150% 150% Growth primarily driven by higher demand in the U.S., largely attributable to launch of a new indication. LAGEVRIO 110 203 -46% -42% Decline due to lower demand and pricing in certain markets in the Asia Pacific region, partially offset by higher demand in Japan and the U.S. WINREVAIR 70 - - - Represents sales in the U.S. following approval in March 2024. About 40% of sales were attributable to doses administered to patients and remainder was due to distributors building inventory in support of increasing demand. Animal Health 1,482 1,456 2% 6% Growth primarily driven by higher pricing in both Livestock and Companion Animal product portfolios, as well as higher demand for Livestock products, partially offset by a decline in Companion Animal distributor inventory. Approximately 3 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases. Livestock 837 807 4% 11% Growth primarily driven by higher demand for ruminant and poultry products, as well as higher pricing across product portfolio. Companion Animal 645 649 -1% 1% Sales were relatively flat compared with prior year reflecting lower distributor inventory, largely offset by higher pricing across product portfolio. Sales of BRAVECTO were $331 million and $326 million in current and prior-year quarters, respectively, which represented growth of 2%, or 3% excluding impact of foreign exchange. Other Revenues** 222 122 82% 53% Growth primarily due to higher royalty income and favorable impact of revenue hedging activities. *Alliance revenue for this product represents Merck’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, EPS and Related Information The table below presents selected expense information. $ in millions GAAP Acquisition- and Divestiture- Related Costs 3 Restructuring Costs (Income) Loss From Investments in Equity Securities Non- GAAP 2 Second Quarter 2024 Cost of sales $3,745 $606 $66 $- $3,073 Selling, general and administrative 2,739 24 31 - 2,684 Research and development 3,500 20 - - 3,480 Restructuring costs 80 - 80 - - Other (income) expense, net 42 (17) - (49) 108 Second Quarter 2023 Cost of sales $4,024 $467 $32 $- $3,525 Selling, general and administrative 2,702 25 52 - 2,625 Research and development 13,321 9 1 - 13,311 Restructuring costs 151 - 151 - - Other (income) expense, net 172 (3) - 194 (19) GAAP Expense, EPS and Related Information Gross margin was 76.8% for the second quarter of 2024 compared with 73.2% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9), partially offset by higher amortization of intangible assets. Selling, general and administrative (SG&A) expenses were $2.7 billion in the second quarter of 2024, an increase of 1% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange and lower restructuring costs. 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. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs. 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. The decrease was primarily due to income from investments in equity securities in 2024 compared with losses in 2023, partially offset by higher net interest expense in 2024. The effective tax rate of 9.1% for the second quarter of 2024 includes a 4.3 percentage point favorable impact 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. GAAP EPS was $2.14 for the second quarter of 2024 compared with GAAP loss per share of $2.35 for the second quarter of 2023. GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus. Non-GAAP Expense, EPS and Related Information Non-GAAP gross margin was 80.9% for the second quarter of 2024 compared with 76.6% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9). Non-GAAP SG&A expenses were $2.7 billion in the second quarter of 2024, an increase of 2% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange. Non-GAAP R&D expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs. Non-GAAP other (income) expense, net, was $108 million of expense in the second quarter of 2024 compared with $19 million of income in the second quarter of 2023, primarily due to higher net interest expense. The non-GAAP effective tax rate was 14.1% for the second quarter of 2024. Non-GAAP EPS was $2.28 for the second quarter of 2024 compared with non-GAAP loss per share of $2.06 for the second quarter of 2023. Non-GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus. A reconciliation of GAAP to non-GAAP net income (loss) and EPS is provided in the table that follows. Second Quarter $ in millions, except EPS amounts 2024 2023 EPS GAAP EPS $2.14 $(2.35) Difference 0.14 0.29 Non-GAAP EPS that excludes items listed below 2 $2.28 $(2.06) Net Income (Loss) GAAP net income (loss) 1 $5,455 $(5,975) Difference 354 755 Non-GAAP net income (loss) that excludes items listed below 1,2 $5,809 $(5,220) Excluded Items: Acquisition- and divestiture-related costs 3 $633 $498 Restructuring costs 177 236 (Income) loss from investments in equity securities (49) 194 Decrease to net income/increase to net loss before taxes 761 928 Income tax (benefit) expense 4 (407) (173) Decrease to net income/increase to net loss $354 $755 Pipeline and Portfolio Highlights In the second quarter, Merck demonstrated further progress in its strong and diverse pipeline, achieving multiple regulatory and clinical milestones. In vaccines, Merck recently received approval from the U.S. Food and Drug Administration (FDA) for CAPVAXIVE, now the first pneumococcal conjugate vaccine specifically designed to address the serotypes responsible for approximately 85% of invasive pneumococcal disease cases in adults age 65 and older, based on the U.S. Centers for Disease Control and Prevention (CDC) data from 2018-2021. The CDC’s Advisory Committee on Immunization Practices (ACIP) unanimously voted to recommend CAPVAXIVE for adults age 65 and older who have not received a pneumococcal conjugate vaccine or whose vaccination history is unknown, for adults 19 to 64 with certain risk conditions, and for adults 19 and older who have started their pneumococcal vaccine series with PCV13. Additionally, shared clinical decision-making is recommended for a supplemental dose of CAPVAXIVE for adults over 65 who completed their vaccine series with both PCV13 and PPSV23. The company also recently announced positive topline results from its Phase 2b/3 trial of clesrovimab (MK-1654), an investigational respiratory syncytial virus (RSV) preventative monoclonal antibody for infants, which met all primary safety and efficacy endpoints. In cardiometabolic disease, Merck continued to make progress in its launch of WINREVAIR in the U.S. As of the end of June, more than 1,000 patients have received WINREVAIR. The company also announced that the European Union’s (EU) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion for WINREVAIR. If approved by the European Commission, WINREVAIR will be the first activin signaling inhibitor therapy for pulmonary arterial hypertension (PAH, World Health Organization [WHO] Group 1) to be approved in Europe, offering a new treatment option for certain adults with this rare, progressive disease. Additional worldwide regulatory filings for WINREVAIR are underway. In oncology, Merck received FDA approval for KEYTRUDA in combination with chemotherapy, followed by KEYTRUDA as a single agent, for the treatment of certain patients with endometrial carcinoma. This marks the 40 th indication for KEYTRUDA in the U.S., reinforcing its importance as a foundational therapy for certain types of cancer. At the 2024 American Society of Clinical Oncology Annual Meeting, new data were presented on four approved oncology medicines and four pipeline candidates in more than 25 types of cancer. In collaboration with Moderna, Inc., Merck announced encouraging three-year follow-up data for V940 (mRNA-4157) in combination with KEYTRUDA for the adjuvant treatment of patients with high-risk stage III and IV melanoma following complete resection. In addition, new Phase 3 data from a study conducted in China and independently led by Kelun-Biotech evaluating sacituzumab tirumotecan (MK-2870/SKB264), an investigational anti-TROP2 antibody-drug conjugate being developed by Merck in collaboration with Kelun-Biotech, were presented in previously treated patients with locally recurrent or metastatic TNBC. Merck Animal Health launched the 12-month injectable formulation of BRAVECTO for use in dogs in a number of markets in Europe for the treatment and persistent killing of fleas (Ctenocephalides felis and Ctenocephalides canis) and ticks (Rhipicephalus sanguineus, Ixodes ricinus, Ixodes hexagonus, and Dermacentor reticulatus). In addition, in July 2024, Merck completed the acquisition of the aqua business of Elanco Animal Health Incorporated. In July 2024, Merck also completed the acquisition of Eyebiotech Limited (EyeBio), which includes the lead candidate Restoret™/MK-3000 that is being evaluated for the treatment of patients with certain retinal diseases, including diabetic macular edema and neovascular age-related macular degeneration, as well as preclinical candidates. And, Merck and Orion Corporation 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 CYP11A1 inhibitor, and other candidates, into an exclusive global license for Merck. Notable recent news releases on Merck’s pipeline and portfolio are provided in the table that follows. Oncology FDA Approved KEYTRUDA Plus Carboplatin and Paclitaxel as Treatment for Adult Patients With Primary Advanced or Recurrent Endometrial Carcinoma, Based on Results From Phase 3 NRG-GY018/KEYNOTE-868 Trial (Read Announcement) FDA Granted Priority Review to Merck’s Application for KEYTRUDA Plus Chemotherapy as First-Line Treatment of Patients With Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma, Based on Results From Phase 3 KEYNOTE-483 Trial; FDA Set Prescription Drug User Fee Act (PDUFA) Date of Sept. 25, 2024 (Read Announcement) Merck Received Positive EU CHMP Opinion for KEYTRUDA Plus Padcev as First-Line Treatment for Patients With Unresectable or Metastatic Urothelial Carcinoma, Based on Results From Phase 3 KEYNOTE-A39/EV-302 Trial (Read Announcement) Moderna and Merck Announced Three-Year Data for mRNA-4157 (V940) in Combination With KEYTRUDA Demonstrated Sustained Improvement in Recurrence-Free Survival and Distant Metastasis-Free Survival Versus KEYTRUDA in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection (Read Announcement) Merck Announced Phase 3 KEYNOTE-522 Trial Met Its Overall Survival (OS) Endpoint in Patients With High-Risk Early-Stage TNBC (Read Announcement) Merck Announced Phase 3 KEYNOTE-811 Trial Met Dual Primary Endpoint of OS as First-Line Treatment in Patients With HER2-Positive Advanced Gastric or Gastroesophageal Junction Adenocarcinoma (Read Announcement) Patritumab Deruxtecan Biologics License Application Submission Received Complete Response Letter From FDA Due to Inspection Findings at Third-Party Manufacturer (Read Announcement) Vaccines FDA Approved CAPVAXIVE for Prevention of Invasive Pneumococcal Disease and Pneumococcal Pneumonia in Adults, Based on Results From Four Phase 3 Trials (Read Announcement) CDC’s ACIP Unanimously Recommended CAPVAXIVE for Pneumococcal Vaccination in Appropriate Adults (Read Announcement) Merck Announced Topline Results From Phase 2b/3 Trial of Clesrovimab (MK-1654), an Investigational RSV Preventative Monoclonal Antibody for Infants, Met All Primary Safety and Efficacy Endpoints (Read Announcement) Cardiometabolic Merck Received Positive EU CHMP Opinion for WINREVAIR (sotatercept) in PAH (Read Announcement) Full-Year 2024 Financial Outlook The following table summarizes the company’s full-year financial outlook. Full Year 2024 Updated Prior Sales * $63.4 to $64.4 billion $63.1 to $64.3 billion Non-GAAP Gross margin 2 Approximately 81% Approximately 81% Non-GAAP Operating expenses 2** $26.8 to $27.6 billion $25.2 to $26.1 billion Non-GAAP Other (income) expense, net 2 Approximately $350 million expense Approximately $250 million expense Non-GAAP Effective tax rate 2 15.5% to 16.5% 14.5% to 15.5% Non-GAAP EPS 2*** $7.94 to $8.04 $8.53 to $8.65 Share count (assuming dilution) Approximately 2.54 billion Approximately 2.55 billion *The company does not have any non-GAAP adjustments to sales. **Includes one-time R&D charges of $656 million for Harpoon Therapeutics, Inc. (Harpoon) acquisition and $1.3 billion for EyeBio acquisition. Outlook does not assume any additional significant potential business development transactions. ***Includes one-time charges totaling $0.77 per share for the Harpoon and EyeBio acquisitions. Merck 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 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 gains 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. Merck continues to experience strong global demand for key growth products, particularly in oncology, and despite impacts related to the lower sell out of GARDASIL from Zhifei Biological Products Co., Ltd. (the company’s distributor and commercialization partner in China) into the points of vaccination in the market during the quarter, Merck is raising and narrowing its full-year sales outlook. Merck now expects its full-year sales to be between $63.4 billion and $64.4 billion, including a negative impact of foreign exchange of approximately 3 percentage points, at mid-July 2024 exchange rates. Approximately 2 percentage points of the negative impact of foreign exchange is due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market. Merck now expects its full-year non-GAAP effective income tax rate to be between 15.5% and 16.5%, which includes an unfavorable impact related to the one-time charge for the acquisition of EyeBio, which is not tax deductible. Merck now expects its full-year non-GAAP EPS to be between $7.94 and $8.04, including one-time charges of $0.26 and $0.51 per share for the acquisitions of Harpoon and EyeBio, respectively. The outlook includes a negative impact of foreign exchange of more than $0.30 per share. The negative impact of foreign exchange is primarily due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market. This revised non-GAAP EPS range reflects the following items, which were not previously included in the outlook: A charge of $1.3 billion, or $0.51 per share, for the acquisition of EyeBio. Estimated 2024 expense of approximately $0.09 per share to be incurred to finance the EyeBio and Elanco aqua business acquisitions and to advance the acquired assets. Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions. Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, income and losses from investments in equity securities, as well as a tax benefit in 2024 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. Earnings Conference Call Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Tuesday, July 30, at 9 a.m. ET 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 at www.merck.com . All participants may join the call by dialing (800) 779-0641 (U.S. and Canada Toll-Free) or (517) 308-9147 and using the access code 4761229. About Merck At Merck, 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. For more information, visit www.merck.com and connect with us on X (formerly Twitter) , Facebook , Instagram , YouTube and LinkedIn . 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, 2023 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) 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) LAGEVRIO (molnupiravir) Lenvima (lenvatinib) Lynparza ( olaparib) M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live) PREVYMIS ( letermovir ) PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live) ROTATEQ (Rotavirus Vaccine, Live, Oral, Pentavalent) VARIVAX (Varicella Virus Vaccine Live) VAXNEUVANCE ( Pneumococcal 15-valent Conjugate Vaccine ) WELIREG ( belzutifan ) WINREVAIR (sotatercept-csrk) Animal Health BRAVECTO (fluralaner) _________________________ 1 Net income (loss) attributable to Merck & Co., Inc. 2 Merck is providing certain 2024 and 2023 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. 3 Reflects expenses related to acquisitions of businesses, 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 and licensing arrangements. 4 Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments, as well as a $259 million benefit in the second quarter of 2024, 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. MERCK & CO., INC. CONSOLIDATED STATEMENT OF OPERATIONS - GAAP (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 1 GAAP % Change GAAP % Change 2Q24 2Q23 June YTD 2024 June YTD 2023 Sales $ 16,112 $ 15,035 7 % $ 31,887 $ 29,522 8 % Costs, Expenses and Other Cost of sales 3,745 4,024 -7 % 7,285 7,951 -8 % Selling, general and administrative 2,739 2,702 1 % 5,221 5,182 1 % Research and development 3,500 13,321 -74 % 7,492 17,597 -57 % Restructuring costs 80 151 -47 % 202 218 -7 % Other (income) expense, net 42 172 -76 % 12 259 -95 % Income (Loss) Before Taxes 6,006 (5,335 ) * 11,675 (1,685 ) * Income Tax Provision 545 637 1,447 1,462 Net Income (Loss) 5,461 (5,972 ) * 10,228 (3,147 ) * Less: Net Income Attributable to Noncontrolling Interests 6 3 11 7 Net Income (Loss) Attributable to Merck & Co., Inc. $ 5,455 $ (5,975 ) * $ 10,217 $ (3,154 ) * Earnings (Loss) per Common Share Assuming Dilution (1) $ 2.14 $ (2.35 ) * $ 4.02 $ (1.24 ) * Average Shares Outstanding Assuming Dilution (1) 2,544 2,539 2,544 2,539 Tax Rate 9.1 % -11.9 % 12.4 % -86.8 % * 100% or greater (1) Because the company recorded a net loss in the second quarter and first six months of 2023, no potential dilutive common shares were used in the computation of loss per common share assuming dilution as the effect would have been anti-dilutive. MERCK & CO., INC. THREE AND SIX MONTHS ENDED JUNE 30, 2024 GAAP TO NON-GAAP RECONCILIATION (AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES) (UNAUDITED) Table 2a GAAP Acquisition and Divestiture-Related Costs (1) Restructuring Costs (2) (Income) Loss from Investments in Equity Securities Certain Other Items Adjustment Subtotal Non-GAAP Second Quarter Cost of sales $ 3,745 606 66 672 $ 3,073 Selling, general and administrative 2,739 24 31 55 2,684 Research and development 3,500 20 20 3,480 Restructuring costs 80 80 80 – Other (income) expense, net 42 (17 ) (49 ) (66 ) 108 Income Before Taxes 6,006 (633 ) (177 ) 49 (761 ) 6,767 Income Tax Provision (Benefit) 545 (129 ) (3) (30 ) (3) 11 (3) (259 ) (4) (407 ) 952 Net Income 5,461 (504 ) (147 ) 38 259 (354 ) 5,815 Net Income Attributable to Merck & Co., Inc. 5,455 (504 ) (147 ) 38 259 (354 ) 5,809 Earnings per Common Share Assuming Dilution $ 2.14 (0.20 ) (0.06 ) 0.02 0.10 (0.14 ) $ 2.28 Tax Rate 9.1 % 14.1 % June YTD Cost of sales $ 7,285 1,069 182 1,251 $ 6,034 Selling, general and administrative 5,221 45 36 81 5,140 Research and development 7,492 36 2 38 7,454 Restructuring costs 202 202 202 – Other (income) expense, net 12 (21 ) (165 ) (186 ) 198 Income Before Taxes 11,675 (1,129 ) (422 ) 165 (1,386 ) 13,061 Income Tax Provision (Benefit) 1,447 (221 ) (3) (72 ) (3) 36 (3) (259 ) (4) (516 ) 1,963 Net Income 10,228 (908 ) (350 ) 129 259 (870 ) 11,098 Net Income Attributable to Merck & Co., Inc. 10,217 (908 ) (350 ) 129 259 (870 ) 11,087 Earnings per Common Share Assuming Dilution $ 4.02 (0.35 ) (0.14 ) 0.05 0.10 (0.34 ) $ 4.36 Tax Rate 12.4 % 15.0 % Only the line items that are affected by non-GAAP adjustments are shown. Merck is providing certain 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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures 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. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. (1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets. Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures. Amounts included in research and development expenses primarily reflect the amortization of intangible assets. Amounts included in other (income) expense, net, primarily reflect royalty income related to the prior termination of the Sanofi-Pasteur MSD joint venture. (2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs. (3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments. (4) Represents 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. MERCK & CO., INC. FRANCHISE / KEY PRODUCT SALES (AMOUNTS IN MILLIONS) (UNAUDITED) Table 3 2024 2023 2Q June YTD 1Q 2Q June YTD 1Q 2Q June YTD 3Q 4Q Full Year Nom % Ex-Exch % Nom % Ex-Exch % TOTAL SALES (1) $15,775 $16,112 $31,887 $14,487 $15,035 $29,522 $15,962 $14,630 $60,115 7 11 8 11 PHARMACEUTICAL 14,006 14,408 28,415 12,721 13,457 26,179 14,263 13,141 53,583 7 11 9 12 Oncology Keytruda 6,947 7,270 14,217 5,795 6,271 12,065 6,338 6,608 25,011 16 21 18 22 Alliance Revenue – Lynparza (2) 292 317 609 275 310 585 299 315 1,199 2 4 4 6 Alliance Revenue – Lenvima (2) 255 249 504 232 242 474 260 226 960 3 4 6 7 Welireg 85 126 211 42 50 92 54 72 218 150 150 128 128 Alliance Revenue – Reblozyl (3) 71 90 161 43 47 90 52 70 212 92 92 80 80 Vaccines (4) Gardasil/Gardasil 9 2,249 2,478 4,727 1,972 2,458 4,430 2,585 1,871 8,886 1 4 7 10 ProQuad/M-M-R II/Varivax 570 617 1,187 528 582 1,109 713 545 2,368 6 7 7 7 Vaxneuvance 219 189 408 106 168 274 214 176 665 13 16 49 51 RotaTeq 216 163 379 297 131 428 156 185 769 25 26 -11 -10 Pneumovax 23 61 59 120 96 92 188 140 85 412 -36 -32 -36 -32 Hospital Acute Care Bridion 440 455 895 487 502 989 424 429 1,842 -9 -8 -9 -8 Prevymis 174 188 362 129 143 273 157 175 605 31 35 33 37 Dificid 73 92 165 65 76 141 74 87 302 20 20 16 16 Zerbaxa 56 62 118 50 54 104 53 61 218 14 18 13 16 Noxafil 56 45 101 60 55 116 51 46 213 -20 -9 -13 -2 Cardiovascular Alliance Revenue - Adempas/Verquvo (5) 98 106 203 99 68 167 92 108 367 56 56 22 22 Adempas (6) 70 72 142 59 65 125 65 66 255 11 15 14 17 Winrevair 70 70 - - - - Virology Lagevrio 350 110 460 392 203 595 640 193 1,428 -46 -42 -23 -18 Isentress/Isentress HD 111 89 200 123 136 259 119 105 483 -35 -31 -23 -19 Delstrigo 56 60 116 44 50 94 54 54 201 19 23 23 26 Pifeltro 42 39 81 34 38 72 37 33 142 3 4 13 13 Neuroscience Belsomra 46 53 99 56 63 119 58 54 231 -16 -8 -17 -10 Immunology Simponi 184 172 356 180 180 359 179 171 710 -4 -2 -1 -1 Remicade 39 35 74 51 48 99 45 43 187 -27 -20 -25 -21 Diabetes (7) Januvia 419 405 824 551 511 1,062 581 547 2,189 -21 -16 -22 -19 Janumet 251 224 475 329 354 683 255 240 1,177 -37 -32 -30 -26 Other Pharmaceutical (8) 576 573 1,151 626 560 1,187 568 576 2,333 2 6 -3 -1 ANIMAL HEALTH 1,511 1,482 2,993 1,491 1,456 2,947 1,400 1,278 5,625 2 6 2 5 Livestock 850 837 1,686 849 807 1,656 874 808 3,337 4 11 2 7 Companion Animal 661 645 1,307 642 649 1,291 526 470 2,288 -1 1 1 3 Other Revenues (9) 258 222 479 275 122 396 299 211 907 82 53 21 24 Sum of quarterly amounts may not equal year-to-date amounts due to rounding. (1) Only select products are shown. (2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs. (3) Alliance Revenue represents royalties. (4) Total Vaccines sales were $3,424 million and $3,656 million in the first and second quarter of 2024, respectively, and $3,133 million and $3,557 million in the first and second quarter of 2023, respectively. (5) 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. (6) Net product sales in Merck's marketing territories. (7) Total Diabetes sales were $745 million and $715 million in the first and second quarter of 2024, respectively, and $950 million and $951 million in the first and second quarter of 2023, respectively. (8) Includes Pharmaceutical products not individually shown above. (9) Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate revenues, including revenue-hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $61 million and $15 million in the first and second quarter of 2024, respectively, and $51 million and $3 million in the first and second quarter of 2023, respectively.

MELBOURNE, Australia, July 02, 2024 (GLOBE NEWSWIRE) -- Immuron Limited (ASX: IMC; NASDAQ: IMRN), an Australian based and globally integrated biopharmaceutical company, is pleased to announce that it has filed a pre-IND (investigational new drug) application with the United States Food and Drug Administration (FDA) for IMM-529. CEO, Steven Lydeamore said, “We are excited for our third therapeutic to be heading towards Phase 2 clinical studies, demonstrating the utility of our technology platform.” The increased incidence of antibiotic resistant ‘superbugs’ has amplified the use of broad-spectrum antibiotics worldwide. An unintended consequence of antimicrobial treatment is disruption of the gastrointestinal microbiota, resulting in susceptibility to opportunistic pathogens, such as Clostridioides difficile (C. diff). Paradoxically, treatment of Clostridioides difficile infection (CDI) also involves antibiotic use, and the heavy reliance on antibiotics to control C. diff does not allow for the gut flora to regenerate and predisposes the patient to relapsing CDI. C. diff is currently the most common pathogen in healthcare-associated infections and was deemed an urgent threat in the Center for Disease Control and Prevention’s report on antibiotic resistance threats in the United States (CDC, 2019). CDI affects over 400,000 people in the US on a yearly basis, contributing to over 30,000 deaths in the US alone annually. This serious health threat has led to an urgent call for the development of new therapeutics to reduce or replace the use of antibiotics to treat bacterial infections. To address this need, Immuron is developing IMM-529 as an adjunctive therapy in combination with standard of care antibiotics for the prevention and/or treatment of recurrent CDI. IMM-529 antibodies targeting C. diff may help to clear CDI infection and promote a quicker re-establishment of normal gut flora, providing an attractive oral preventative for recurrent CDI. Immuron is collaborating with Dr. Dena Lyras and her team at Monash University, Australia to develop vaccines to produce bovine colostrum-derived antibodies. Dairy cows were immunised to generate hyperimmune bovine colostrum (HBC) that contains antibodies targeting three essential C. diff virulence components. IMM-529 targets Toxin B (TcB), the spores and the surface layer proteins of the vegetative cells (refer to MOA schematic - below). This unique 3-target approach has yielded promising results in pre-clinical infection and relapse models, including (1) Prevention of primary disease (80% P =0.0052); (2) Protection of disease recurrence (67%, P <0.01)and (3) Treatment of primary disease (78.6%, P<0.0001; TcB HBC). Importantly IMM-529 antibodies cross-react with whole cell lysates of many different human strains of C. diff including hypervirulent strains. To our knowledge, IMM-529 is, to date, the only investigational drug that has shown therapeutic potential in all three phases of the disease. Opportunity assessment by Lumanity indicates that if efficacious, IMM-529 will be positioned as early in treatment algorithm as payers will allow. Second recurrence appears to be most likely (after one course each of fidaxomicin and vancomycin) but some doctors who treat aggressively or see a patient as being especially high-risk may be willing to turn to IMM-529 even earlier. Up to ~31k patients would be eligible if IMM-529 is positioned at the second recurrence, and up to ~95k patients would be eligible if positioned at the first recurrence. Based on the estimated market size, anticipated payer restrictions, pricing, and competition, base case yearly revenue for IMM-529 is projected at US$93M. The estimate of $93M represents a conservative view of the target patient population (limited to 2nd recurrence and later by trial design and payer coverage) but likely aggressive use (75%) within that target patient population. Greater efficacy may lead to greater use in patients after their first recurrence, increasing the size of the patient population. Even capturing as few as 10% of first recurrence patients adds up to 9,500 patients to the treated pool (potential for some double counting), which could add up to US$48M in yearly revenue. Oral dosing of IMM-529 was viewed as a positive by infectious disease experts, particularly since current advanced CDI treatment approaches (e.g., bezlotoxumab, fecal microbiota transplantation) are expensive and complex in their administration. This release has been authorised by the directors of Immuron Limited. COMPANY CONTACT: Steven Lydeamore Chief Executive Officer steve@immuron.com About Immuron Immuron Limited (ASX: IMC, NASDAQ: IMRN), is an Australian biopharmaceutical company focused on developing and commercializing orally delivered targeted polyclonal antibodies for the treatment of infectious diseases. Immuron Platform Technology Immuron’s proprietary technology is based on polyclonal immunoglobulins (IgG) derived from engineered hyper-immune bovine colostrum. Immuron has the capability of producing highly specific immunoglobulins to any enteric pathogen and our products are orally active. Bovine IgG can withstand the acidic environment of the stomach and is resistant to proteolysis by the digestive enzymes found in the Gastrointestinal (GI) tract. Bovine IgG also possesses this unique ability to remain active in the human GI tract delivering its full benefits directly to the bacteria found there. The underlying nature of Immuron’s platform technology enables the development of medicines across a large range of infectious diseases. The platform can be used to block viruses or bacteria at mucosal surfaces such as the Gastrointestinal tract and neutralize the toxins they produce. For more information visit: and Subscribe for Immuron News: Here FORWARD-LOOKING STATEMENTS: This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Such statements include, but are not limited to, any statements relating to our growth strategy and product development programs and any other statements that are not historical facts. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition, and stock value. Factors that could cause actual results to differ materially from those currently anticipated include: risks relating to our growth strategy; our ability to obtain, perform under and maintain financing and strategic agreements and relationships; risks relating to the results of research and development activities; risks relating to the timing of starting and completing clinical trials; uncertainties relating to preclinical and clinical testing; our dependence on third-party suppliers; our ability to attract, integrate and retain key personnel; the early stage of products under development; our need for substantial additional funds; government regulation; patent and intellectual property matters; competition; as well as other risks described in our SEC filings. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions, or circumstances on which any such statement is based, except as required by law. A photo accompanying this announcement is available at IMM-529 MOA in CDI - Targets Spores, Vegetative Cells, and Toxin B IMM-529 MOA in CDI - Targets Spores, Vegetative Cells, and Toxin B