Equibles

8-K

Merck & Co., Inc. (MRK)

8-K 2023-08-01 For: 2023-08-01
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Added on April 02, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 1, 2023

Merck & Co., Inc.

(Exact name of registrant as specified in its charter)

New Jersey<br> <br>(State or other jurisdiction<br> <br>of incorporation) 1-6571<br> <br>(Commission<br> <br>File Number) 22-1918501<br> <br>(I.R.S Employer<br> <br>Identification No.)
126 East Lincoln Avenue, Rahway, NJ<br> <br>(Address of principal executive offices) 07065<br> <br>(Zip Code)

(Registrant’s telephone number, including area code)

(908) 740-4000

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common<br> Stock ($0.50 par value) MRK New York Stock Exchange
0.500% Notes due 2024 MRK 24 New York Stock Exchange
1.875% Notes due 2026 MRK/26 New York Stock Exchange
2.500% Notes due 2034 MRK/34 New York Stock Exchange
1.375% Notes due 2036 MRK 36A New York Stock Exchange

Item 2.02. Results of Operations and Financial Condition.

The following information, including the exhibits hereto, is being furnished pursuant to this Item 2.02.

Incorporated by reference is a press release issued by Merck & Co., Inc. on August 1, 2023, regarding earnings for the second quarter of 2023, attached as Exhibit 99.1. Also incorporated by reference is certain supplemental information not included in the press release, attached as Exhibit 99.2.

This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press release issued August 1, 2023, regarding earnings for the second quarter of 2023
Exhibit 99.2 Certain supplemental information not included in the press release
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Merck & Co., Inc.
Date: August 1, 2023 By: /s/ Kelly E. W. Grez
Kelly E. W. Grez <br><br>Corporate Secretary

Exhibit 99.1

News Release

Merck AnnouncesSecond-Quarter 2023 Financial Results

- Sales<br> Reflect Sustained Underlying Growth, Particularly in Oncology and Vaccines
- Total<br> Worldwide Sales Were $15.0 Billion, an Increase of 3% From Second Quarter 2022; Excluding<br> LAGEVRIO, Growth Was 11%; Excluding LAGEVRIO and the Impact of Foreign Exchange, Growth Was<br> 14%
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○ KEYTRUDA<br> Sales Grew 19% to $6.3 Billion; Excluding the Impact of Foreign Exchange, Sales Grew 21%
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○ GARDASIL/GARDASIL<br> 9 Sales Grew 47% to $2.5 Billion; Excluding the Impact of Foreign Exchange, Sales Grew 53%
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○ LAGEVRIO<br> Sales Declined 83% to $203 Million; Excluding the Impact of Foreign Exchange, Sales Declined<br> 82%
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- GAAP<br> Loss per Share Was $2.35; Non-GAAP Loss per Share Was $2.06; GAAP and Non-GAAP Loss per Share<br> Include a Charge of $4.02 per Share for the Acquisition of Prometheus
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- Presented<br> Compelling Data in Earlier Stages of Cancer at 2023 ASCO Annual Meeting, Including:
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o Positive<br> Phase 3 Results From KEYNOTE-671 Trial
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o Promising<br> New Data From Phase 2b KEYNOTE-942/mRNA-4157-P201 Trial in Collaboration With Moderna
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- Announced<br> Positive Results From Two Phase 3 Trials Evaluating V116
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- Submitted<br> Biologics License Application to the U.S. FDA for Sotatercept
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- Full-Year<br> 2023 Financial Outlook
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o Raises<br> and Narrows Expected Worldwide Sales Range To Be Between $58.6 Billion and $59.6 Billion,<br> Including Negative Impact of Foreign Exchange of Approximately 2 Percentage Points; Outlook<br> Includes Approximately $1.0 Billion of LAGEVRIO Sales
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o Now<br> Expects Non-GAAP EPS To Be Between $2.95 and $3.05, Including the Negative Impact of Foreign<br> Exchange of Approximately 5 Percentage Points; Outlook Reflects Negative Impact From One-Time<br> Charge of $10.2 Billion, or $4.02 per Share, for the Acquisition of Prometheus
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RAHWAY, N.J., Aug. 1, 2023 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2023.

"We continue to make great progress as we advance our broad and deep pipeline, raise the bar of innovation, and bring forward leading-edge science to save and improve lives around the world," said Robert M. Davis, chairman and chief executive officer, Merck. "We delivered robust underlying growth during the second quarter and are well positioned to achieve strong full-year results. I am proud of our talented, diverse and dedicated global team that continues to focus on creating value for patients and all our stakeholders now and well into the future.”

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Financial Summary

Second<br> Quarter
$ in millions, except EPS amounts 2023 2022 Change Change<br> Ex-<br> Exchange
Sales $ 15,035 $ 14,593 3 % 7 %
GAAP<br> net (loss) income^1^ (5,975 ) 3,944 **N/M N/M
Non-GAAP<br> net (loss) income that excludes certain items^1,2*^ (5,220 ) 4,743 N/M N/M
GAAP EPS (2.35 ) 1.55 N/M N/M
Non-GAAP<br> EPS that excludes certain items^2*^ (2.06 ) 1.87 N/M N/M
*Refer to table on page 6. <br>**Not meaningful

Generally Accepted Accounting Principles (GAAP) loss / earnings per share (EPS) assuming dilution was a loss per share of $2.35 for the second quarter of 2023. Non-GAAP loss per share was $2.06 for the second quarter of 2023. Both GAAP and non-GAAP loss per share were due to a charge for the acquisition of Prometheus Biosciences, Inc. (Prometheus) of $4.02 per share. Additionally, both GAAP and non-GAAP loss per share in the second quarter of 2023 were unfavorably affected by lower sales of LAGEVRIO and the impact of foreign exchange compared with the second quarter of 2022.

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.

Year-to-date results can be found in the attached tables.

^1^Net (loss) income attributable to Merck & Co., Inc.

^2^Merck is providing certain 2023 and 2022 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, senior management’s annual compensation is derived in part using a non-GAAP pre-tax 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.

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Second-Quarter Sales Performance

The following table reflects sales of the company’s top products and significant performance drivers.

Second Quarter
$ in millions 2023 2022 Change Change<br><br><br> Ex-Exchange Commentary
Total Sales $ 15,035 $ 14,593 3 % 7 %
Pharmaceutical 13,457 12,756 6 % 8 % Increase driven by growth in oncology, vaccines and hospital<br> acute care, partially offset by lower sales in virology due to LAGEVRIO, and in diabetes. Excluding LAGEVRIO, growth of 14%. Excluding<br> LAGEVRIO and unfavorable impact of foreign exchange, growth of 17%.
KEYTRUDA 6,271 5,252 19 % 21 % Growth from continued strong global momentum in metastatic<br> indications, including certain types of non-small cell lung cancer (NSCLC), renal cell carcinoma (RCC), head and neck squamous cell<br> carcinoma and triple-negative breast cancer (TNBC), and increased uptake across earlier-stage indications, including certain types<br> of neoadjuvant/adjuvant TNBC in the U.S.
GARDASIL / GARDASIL 9 2,458 1,674 47 % 53 % Growth largely due to strong global demand, particularly in<br> China.
JANUVIA / JANUMET 864 1,233 -30 % -28 % Decline primarily due to generic competition in several international<br> markets, particularly in Europe, and lower demand and pricing in the U.S.
PROQUAD, M-M-R II and VARIVAX 582 578 1 % 1 % Relatively flat compared with prior year.
BRIDION 502 426 18 % 19 % Growth primarily due to increased demand, particularly in<br> the U.S., reflecting an increase in market share among neuromuscular blockade reversal agents.
Lynparza* 310 275 13 % 15 % Growth driven primarily by increased demand in certain international<br> markets.
Lenvima* 242 231 5 % 6 % Growth primarily due to higher demand in the U.S., partially<br> offset by lower demand in China.
LAGEVRIO 203 1,177 -83 % -82 % Decrease largely attributable to lower sales in Japan and<br> nonrecurrence of sales in the U.K.
SIMPONI 180 181 -1 % -1 % Relatively flat compared with prior year.
VAXNEUVANCE 168 12 ***N/M N/M Growth driven largely by continued uptake in pediatric indication<br> following launch in the U.S.
Animal Health 1,456 1,467 -1 % 2 % Excluding unfavorable impact of foreign exchange, growth primarily<br> driven by higher pricing in both Livestock and Companion Animal product portfolios.
Livestock 807 826 -2 % 2 % Excluding unfavorable impact of foreign exchange, growth due<br> to higher pricing, as well as higher demand for swine and poultry products, partially offset by lower demand for ruminant products,<br> due in part to reduced herd sizes.
Companion Animal 649 641 1 % 2 % Growth driven by higher pricing, including for<br> the BRAVECTO line of products, partially offset by supply challenges for certain companion animal vaccines. Sales of BRAVECTO were<br> $326 million and $309 million in the current and prior quarters, respectively, which represented growth of 5% or 7% excluding unfavorable<br> impact of foreign exchange.
Other Revenues** 122 370 -67 % -19 % Decline primarily due to impact of revenue hedging. Excluding<br> unfavorable impact of foreign exchange, decline due to lower royalties and milestone payments received for out-licensing arrangements.

*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.

***Not meaningful

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Second-Quarter Expense, EPS andRelated Information

The table below presents selected expense information.

$ in<br> millions GAAP Acquisition- and Divestiture- Related Costs^3^ Restructuring<br><br> Costs (Income)<br><br> Loss From<br> Investments<br> in Equity<br> Securities Non- GAAP^2^
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 )
Second Quarter 2022
Cost of sales $ 4,216 $ 451 $ 67 $ - $ 3,698
Selling, general and administrative 2,512 65 27 - 2,420
Research and development 2,798 12 22 - 2,764
Restructuring costs 142 - 142 - -
Other (income) expense, net 438 2 - 234 202

GAAP Expense, EPS and RelatedInformation

Gross margin was 73.2% for the second quarter of 2023 compared with 71.1% for the second quarter of 2022. The increase was primarily due to lower LAGEVRIO sales, which have a low gross margin, as well as the favorable impact of product mix. The gross margin increase was partially offset by the unfavorable impact of foreign exchange.

^3^Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions of businesses, 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.

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Selling, general and administrative (SG&A) expenses were $2.7 billion in the second quarter of 2023, an increase of 8% compared with the second quarter of 2022. The increase was primarily due to higher administrative costs, including higher compensation and benefit costs, and higher promotional spending, partially offset by lower acquisition- and divestiture- related costs and the favorable impact of foreign exchange.

Research and development (R&D) expenses were $13.3 billion in the second quarter of 2023 compared with $2.8 billion in the second quarter of 2022. The increase was primarily due to a $10.2 billion charge for the acquisition of Prometheus. The remaining increase was driven by higher compensation and benefit costs, reflecting in part increased headcount, higher investments in discovery research and early drug development, and higher clinical development spending.

Other (income) expense, net, was $172 million of expense in the second quarter of 2023 compared with $438 million of expense in the second quarter of 2022, primarily due to lower net losses from investments in equity securities and lower pension settlement costs.

The income tax provision for the second quarter of 2023 was $637 million on a pretax loss of $5.3 billion, resulting in an effective tax rate of (11.9)%. This effective tax rate includes a 25.1 percentage point unfavorable impact of the charge for the acquisition of Prometheus, for which no tax benefit was recorded.

GAAP loss per share was $2.35 for the second quarter of 2023 compared with earnings per share of $1.55 for the second quarter of 2022.

Non-GAAP Expense, EPS and RelatedInformation

Non-GAAP gross margin was 76.6% for the second quarter of 2023 compared with 74.7% for the second quarter of 2022. The increase was primarily due to lower LAGEVRIO sales, which have a low gross margin, as well as the favorable impact of product mix. The gross margin increase was partially offset by the unfavorable impact of foreign exchange.

Non-GAAP SG&A expenses were $2.6 billion in the second quarter of 2023, an increase of 8% compared with the second quarter of 2022. The increase was primarily due to higher administrative costs, including higher compensation and benefit costs, and higher promotional spending, partially offset by the favorable impact of foreign exchange.

Non-GAAP R&D expenses were $13.3 billion in the second quarter of 2023 compared with $2.8 billion in the second quarter of 2022. The increase was primarily due to a $10.2 billion charge for the acquisition of Prometheus. The remaining increase was driven by higher compensation and benefit costs, reflecting in part increased headcount, higher investments in discovery research and early drug development, and higher clinical development spending.

Non-GAAP other (income) expense, net, was $19 million of income in the second quarter of 2023 compared with $202 million of expense in the second quarter of 2022, primarily due to lower pension settlement costs.

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The non-GAAP income tax provision for the second quarter of 2023 was $810 million on a pretax loss of $4.4 billion, resulting in a non-GAAP effective tax rate of (18.4)%. This effective tax rate includes a 32.5 percentage point unfavorable impact of the charge for the acquisition of Prometheus, for which no tax benefit was recorded.

Non-GAAP loss per share was $2.06 for the second quarter of 2023 compared with earnings per share of $1.87 for the second quarter of 2022.

A reconciliation of GAAP to non-GAAP net (loss) income and EPS is provided in the table that follows.

Second<br> Quarter
$ in millions, except EPS<br> amounts 2023 2022
EPS
GAAP EPS $ (2.35 ) $ 1.55
Difference 0.29 0.32
Non-GAAP<br> EPS that excludes items listed below^2^ $ (2.06 ) $ 1.87
Net (Loss) Income
GAAP<br> net (loss) income^1^ $ (5,975 ) $ 3,944
Difference 755 799
Non-GAAP<br> net (loss) income that excludes items listed below^1,2^ $ (5,220 ) $ 4,743
Excluded Items:
Acquisition-<br> and divestiture-related costs^3^ $ 498 $ 530
Restructuring<br> costs 236 258
Loss from investments<br> in equity securities 194 234
Increase to net loss / decrease to net<br> income before taxes 928 1,022
Estimated income tax (benefit) expense (173 ) (223 )
Increase to net loss / decrease to net<br> income $ 755 $ 799

Pipeline and Portfolio Highlights

Merck’s expansive research efforts resulted in continued progress across its broad pipeline and portfolio. In oncology, the company reached regulatory milestones across different stages of cancer and shared positive results from a range of clinical trials. Notably, Merck presented data on four approved medicines and two pipeline candidates in more than 25 types of cancer at the 2023 American Society of Clinical Oncology (ASCO) Annual Meeting, including investigational data for KEYTRUDA that demonstrates its progress in earlier stages of disease.

Further, in vaccines, Merck announced positive topline results demonstrating that V116, an investigational 21-valent pneumococcal conjugate vaccine specifically designed for adults, met key immunogenicity and safety endpoints in two Phase 3 trials. In cardiovascular, Merck submitted a Biologics License Application to the U.S. Food and Drug Administration (FDA) for sotatercept, Merck’s novel investigational activin signaling inhibitor for the treatment of adults with pulmonary arterial hypertension (World Health Organization Group 1). In chronic cough, Merck received an acceptance from the FDA for the resubmission of the New Drug Application for gefapixant and assigned a target action date of Dec. 27, 2023.

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Merck also completed the acquisition of Prometheus, which will accelerate the company’s growing presence in immunology and add diversity to its pipeline. Prometheus’ leading clinical candidate, MK-7240, formerly known as PRA-023, creates an opportunity for Merck to transform the treatment of immune-mediated diseases.

Notable recent news releases on Merck’s pipeline and portfolio are provided in the table that follows.

Oncology FDA<br> Approved Lynparza Plus Abiraterone and Prednisone or Prednisolone for Treatment of Adult Patients With BRCA-Mutated Metastatic Castration-Resistant<br> Prostate Cancer (Read<br> Announcement)
FDA<br> Accepted Application for Merck’s KEYTRUDA Plus Chemotherapy as Treatment for Advanced or Unresectable Biliary Tract Cancer (Read<br> Announcement)
Merck’s<br> KEYTRUDA Plus Chemotherapy Before Surgery and Continued as a Single Agent After Surgery Reduced the Risk of Event-Free Survival Events<br> by 42% Versus Pre-Operative Chemotherapy in Resectable Stage II, IIIA or IIIB NSCLC (Read<br> Announcement)
Merck<br> and Moderna Initiated Phase 3 Study Evaluating V940 (mRNA-4157) In Combination With KEYTRUDA for Adjuvant Treatment of Patients With<br> Resected High-Risk (Stage IIB-IV) Melanoma (Read<br> Announcement)
Merck<br> and Moderna Announced mRNA-4157 (V940) in Combination With KEYTRUDA Demonstrated a Statistically Significant and Clinically Meaningful<br> Improvement in Distant Metastasis-Free Survival in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection Versus<br> KEYTRUDA (Read<br> Announcement)
KEYTRUDA<br> Plus Chemotherapy Significantly Improved Overall Survival Versus Chemotherapy Alone as First-Line Treatment for Unresectable Advanced<br> Pleural Mesothelioma (Read<br> Announcement)
KEYTRUDA<br> Plus Lenvima Demonstrated Long-Term, Durable Survival Benefit Versus Sunitinib as First-Line Treatment for Patients With Advanced<br> RCC (Read<br> Announcement)
Merck<br> Announced Phase 3 KEYNOTE-A18 Trial Met Primary Endpoint of Progression-Free Survival (PFS) in Patients With Newly Diagnosed High-Risk<br> Locally Advanced Cervical Cancer (Read<br> Announcement)
KEYTRUDA<br> Plus Trastuzumab and Chemotherapy Met Primary Endpoint of PFS as First-Line Treatment in Patients With HER2-Positive Advanced Gastric<br> or Gastroesophageal Junction Adenocarcinoma (Read<br> Announcement)
Vaccines Merck<br> Announced V116, an Investigational, 21-Valent Pneumococcal Conjugate Vaccine Specifically Designed for Adults, Met Key Immunogenicity<br> and Safety Endpoints in Two Phase 3 Trials (Read<br> Announcement)
Other Pipeline Updates FDA<br> Approved New Indication for Merck’s PREVYMIS for Prevention of Cytomegalovirus Disease in High-Risk Adult Kidney Transplant<br> Recipients (Read<br> Announcement)
Merck<br> Presented Phase 2a Data for Efinopegdutide (MK-6024), an Investigational GLP-1/Glucagon Receptor Co-agonist, in Patients With Nonalcoholic<br> Fatty Liver Disease, at EASL 2023; Additionally, Efinopegdutide Was Granted Fast Track Designation by the FDA for the Treatment of<br> Nonalcoholic Steatohepatitis (NASH) (Read<br> Announcement)
Merck<br> Received Positive European Union Committee for Medicinal Products for Human Use (CHMP) Opinion for Gefapixant (Read<br> Announcement) 
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Full-Year 2023 Financial Outlook

The following table summarizes the company’s full-year financial outlook.

Sales* $58.6 to $59.6 billion
Non-GAAP<br> Gross margin^2^ Approximately 77%
Non-GAAP<br> Operating expenses^2**^ $34.0 to $34.6 billion
Non-GAAP<br> Other (income) expense, net^2^ Approximately $100 million
Non-GAAP<br> Effective tax rate^2***^ 30.5% to 31.5%
Non-GAAP<br> EPS^2****^ $2.95 to $3.05
Share count (assuming dilution) 2.55 billion

*Includes approximately $1.0 billion of LAGEVRIO sales. The company does not have any non-GAAP adjustments to sales.

**Includes an aggregate $11.6 billion of R&D expenses related to the Prometheus and Imago BioSciences, Inc. (Imago) acquisitions and upfront payment for the license and collaboration agreement with Kelun-Biotech (a holding subsidiary of Sichuan Kelun Pharmaceutical Co., Ltd). Outlook does not assume any additional significant potential business development transactions.

***Includes a negative impact of 15 percentage points from the one-time charge for the acquisition of Prometheus.

****Includes $4.53 of one-time charges related to the Prometheus and Imago acquisitions and upfront payment to Kelun-Biotech.

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 vaccines. As a result, Merck is raising and narrowing its full-year sales outlook. Merck now expects full-year sales to be between $58.6 billion and $59.6 billion, including a negative impact of foreign exchange of approximately 2 percentage points, at mid-July 2023 exchange rates. This full-year outlook continues to include approximately $1.0 billion of LAGEVRIO sales.

Merck’s full-year non-GAAP effective income tax rate is expected to be between 30.5% and 31.5%, including an unfavorable impact of approximately 15 percentage points from the non-tax deductible one-time charge for the acquisition of Prometheus.

Merck now expects its full-year non-GAAP EPS to be between $2.95 and $3.05, including a negative impact of foreign exchange of approximately 5 percentage points, at mid-July 2023 exchange rates. This revised non-GAAP EPS range reflects the following, which were not previously included in the outlook:

· Additional<br> strength in the business of approximately $0.24 per share.
· A<br> charge of $10.2 billion, or $4.02 per share, for the acquisition of Prometheus.
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· Estimated<br> 2023 expense of approximately $0.14 per share to be incurred to finance the Prometheus acquisition<br> and to advance the acquired assets.
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· A<br> less than 1%, or approximately $0.02 per share, incremental negative impact of foreign exchange.

The non-GAAP EPS range excludes acquisition- and divestiture-related costs and costs related to restructuring programs, as well as income and losses from investments in equity securities, and a previously disclosed charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Tuesday, Aug. 1, at 8 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures, prepared remarks and slides highlighting the results, will be available at www.merck.com.

All participants may join the call by dialing (888) 769-8514 (U.S. and Canada Toll-Free) or (517) 308-9208 and using the access code 8206435.

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 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.

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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 the global outbreak of novel coronavirus disease (COVID-19); 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, 2022, 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)

GARDASIL (Human PapillomavirusQuadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant)

GARDASIL 9 (Human Papillomavirus9-valent Vaccine, Recombinant)

JANUMET (sitagliptin and metforminHCl)

JANUVIA (sitagliptin)

KEYTRUDA (pembrolizumab)

LAGEVRIO (molnupiravir)

Lenvima (lenvatinib)

Lynparza (olaparib)

M-M-R II (Measles, Mumps andRubella Virus Vaccine Live)

PREVYMIS (letermovir)

PROQUAD (Measles, Mumps, Rubellaand Varicella Virus Vaccine Live)

SIMPONI (golimumab)

VARIVAX (Varicella Virus VaccineLive)

VAXNEUVANCE (Pneumococcal15-valent Conjugate Vaccine)

Animal Health

BRAVECTO (fluralaner)

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Media<br> Contacts: Investor<br> Contacts:
Robert Josephson<br><br> <br>(203) 914-2372<br><br> <br>robert.josephson@merck.com<br><br> <br><br><br> <br>Michael Levey<br><br> <br>(215) 872-1462<br><br> <br>michael.levey@merck.com Peter Dannenbaum<br><br> <br>(732) 594-1579<br><br> <br>peter.dannenbaum@merck.com<br><br> <br><br><br> <br>Steven Graziano<br><br> <br>(732) 594-1583<br><br> <br>steven.graziano@merck.com

CONSOLIDATEDSTATEMENT OF OPERATIONS - GAAP

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table1

GAAP GAAP
2Q23 2Q22 % Change June YTD<br><br> 2023 June YTD<br><br> 2022 % Change
Sales $ 15,035 $ 14,593 3 % $ 29,522 $ 30,494 -3 %
Costs,<br> Expenses and Other
Cost of sales 4,024 4,216 -5 % 7,951 9,596 -17 %
Selling, general<br> and administrative 2,702 2,512 8 % 5,182 4,834 7 %
Research and<br> development 13,321 2,798 * 17,597 5,374 *
Restructuring<br> costs 151 142 6 % 218 194 12 %
Other (income)<br> expense, net 172 438 -61 % 259 1,148 -77 %
(Loss) Income<br> Before Taxes (5,335 ) 4,487 * (1,685 ) 9,348 *
Income Tax Provision 637 538 1,462 1,092
Net (Loss) Income (5,972 ) 3,949 * (3,147 ) 8,256 *
Less: Net Income<br> Attributable to Noncontrolling Interests 3 5 7 2
Net (Loss) Income<br> Attributable to Merck & Co., Inc. $ (5,975 ) $ 3,944 * $ (3,154 ) $ 8,254 *
(Loss)<br> Earnings per Common Share Assuming Dilution ^(1)^ $ (2.35 ) $ 1.55 * $ (1.24 ) $ 3.25 *
Average<br> Shares Outstanding Assuming Dilution ^(1)^ 2,539 2,540 2,539 2,538
Tax Rate -11.9 % 12.0 % -86.8 % 11.7 %

* 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.

THREEAND SIX MONTHS ENDED JUNE 30, 2023 GAAP TO NON-GAAP RECONCILIATION

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table2a

GAAP Acquisition and Divestiture- Related Costs ^(1)^ Restructuring Costs ^(2)^ (Income)<br> Loss from<br><br> Investments in Equity<br><br> Securities Certain<br> Other Items Adjustment<br> Subtotal Non-GAAP
Second<br> Quarter
Cost of sales $ 4,024 467 32 499 $ 3,525
Selling, general and administrative 2,702 25 52 77 2,625
Research and development 13,321 9 1 10 13,311
Restructuring costs 151 151 151 -
Other (income) expense, net 172 (3 ) 194 191 (19 )
Loss Before Taxes (5,335 ) (498 ) (236 ) (194 ) (928 ) (4,407 )
Income Tax Provision (Benefit) 637 (91 )^(4)^ (38 )^(4)^ (44 )^(4)^ (173 ) 810
Net Loss (5,972 ) (407 ) (198 ) (150 ) (755 ) (5,217 )
Net Loss Attributable to Merck &<br> Co., Inc. (5,975 ) (407 ) (198 ) (150 ) (755 ) (5,220 )
Loss<br> per Common Share Assuming Dilution^(5)^ $ (2.35 ) (0.16 ) (0.07 ) (0.06 ) (0.29 ) $ (2.06 )
Tax Rate -11.9 % -18.4 %
June YTD
Cost of sales $ 7,951 1,012 61 1,073 $ 6,878
Selling, general and administrative 5,182 45 53 98 5,084
Research and development 17,597 19 1 20 17,577
Restructuring costs 218 218 218 -
Other (income) expense, net 259 12 (235 ) 573 ^(3)^ 350 (91 )
(Loss) Income Before Taxes (1,685 ) (1,088 ) (333 ) 235 (573 ) (1,759 ) 74
Income Tax Provision (Benefit) 1,462 (196 )^(4)^ (56 )^(4)^ 51 ^(4)^ (60 )^(4)^ (261 ) 1,723
Net Loss (3,147 ) (892 ) (277 ) 184 (513 ) (1,498 ) (1,649 )
Net Loss Attributable to Merck &<br> Co., Inc. (3,154 ) (892 ) (277 ) 184 (513 ) (1,498 ) (1,656 )
Loss<br> per Common Share Assuming Dilution^(5)^ $ (1.24 ) (0.35 ) (0.11 ) 0.07 (0.20 ) (0.59 ) $ (0.65 )
Tax Rate -86.8 % 2,328.4 %
Only<br> the line items that are affected by non-GAAP adjustments are shown.
---
Merck is providing certain non-GAAP<br> information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying<br> business performance and trends.  Management believes that providing non-GAAP information enhances investors’ understanding<br> of the company’s results because management uses non-GAAP measures to assess performance.  Management uses non-GAAP<br> measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics.  In<br> addition, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric.  The<br> non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared<br> in accordance with GAAP.
^(1)^Amounts included<br> in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts included in selling, general<br> and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures.  Amounts<br> included in research and development expenses primarily reflect expenses for the amortization of intangible assets.  Amounts<br> included in other (income) expense, net, for the six-month period primarily reflect a $37 million loss on the sale of a business<br> and an increase in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination<br> of the Sanofi-Pasteur MSD joint venture, partially offset by royalty income.
^(2)^Amounts primarily<br> include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities<br> under the company's formal restructuring programs.
^(3)^ Reflects<br> a charge related to settlements with certain plaintiffs in the Zetia antitrust litigation.
^(4)^ Represents<br> the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP<br> adjustments.
^(5)^ Because the<br> company recorded a net loss in the second quarter and first six months of 2023, no potential dilutive common shares were used in<br> the computation of loss per common share assuming dilution as the effect would have been anti-dilutive.

MERCK & CO., INC.

FRANCHISE/ KEY PRODUCT SALES

(AMOUNTSIN MILLIONS)

(UNAUDITED)

Table3

**** 2023 2022 2Q June YTD
**** 1Q 2Q June YTD 1Q 2Q June YTD 3Q 4Q Full Year Nom % Ex-Exch % Nom % Ex-Exch %
TOTAL SALES ^(1)^ $ 14,487 $ 15,035 $ 29,522 $ 15,901 $ 14,593 $ 30,494 $ 14,959 $ 13,830 $ 59,283 **** 3 **** 7 **** -3 **** -
PHARMACEUTICAL **** 12,721 **** 13,457 **** 26,179 **** 14,107 **** 12,756 **** 26,863 **** 12,963 **** 12,180 **** 52,005 **** 6 **** 8 **** -3 **** -
Oncology
Keytruda 5,795 6,271 12,065 4,809 5,252 10,061 5,426 5,450 20,937 19 21 20 23
Alliance Revenue<br> – Lynparza ^(2)^ 275 310 585 266 275 541 284 292 1,116 13 15 8 12
Alliance Revenue<br> – Lenvima ^(2)^ 232 242 474 227 231 459 202 216 876 5 6 3 5
Welireg 42 50 92 18 27 45 38 40 123 89 89 105 105
Alliance Revenue<br> – Reblozyl ^(3)^ 43 47 90 52 33 86 39 41 166 41 41 4 4
Vaccines ^(4)^
Gardasil /<br> Gardasil 9 1,972 2,458 4,430 1,460 1,674 3,133 2,294 1,470 6,897 47 53 41 48
ProQuad /<br> M-M-R II / Varivax 528 582 1,109 470 578 1,047 668 526 2,241 1 1 6 7
RotaTeq 297 131 428 216 173 389 256 139 783 -25 -24 10 13
Vaxneuvance 106 168 274 5 12 16 16 138 170 * * * *
Pneumovax<br> 23 96 92 188 173 153 325 131 145 602 -40 -38 -42 -39
Vaqta 40 42 82 36 35 71 64 39 173 20 20 16 17
Hospital Acute Care
Bridion 487 502 989 395 426 821 423 441 1,685 18 19 21 23
Prevymis 129 143 273 94 103 197 114 118 428 39 42 39 43
Dificid 65 76 141 52 66 119 77 67 263 14 14 19 19
Primaxin 80 53 133 58 64 122 63 54 239 -16 -12 9 17
Noxafil 60 55 116 57 60 118 62 58 238 -8 -3 -2 5
Zerbaxa 50 54 104 30 46 76 43 49 169 17 18 36 39
Cardiovascular
Alliance<br> Revenue - Adempas/Verquvo ^(5)^ 99 68 167 72 98 170 88 82 341 -31 -31 -2 -2
Adempas ^(6)^ 59 65 125 61 63 124 57 57 238 3 5 - 5
Virology
Lagevrio 392 203 595 3,247 1,177 4,424 436 825 5,684 -83 -82 -87 -85
Isentress<br> / Isentress HD 123 136 259 158 147 305 161 167 633 -7 -4 -15 -12
Neuroscience
Belsomra 56 63 119 69 69 137 62 59 258 -9 -4 -14 -7
Immunology
Simponi 180 180 359 186 181 366 173 166 706 -1 -1 -2 1
Remicade 51 48 99 61 53 114 49 44 207 -11 -10 -13 -10
Diabetes ^(7)^
Januvia 551 511 1,062 779 756 1,535 717 561 2,813 -33 -30 -31 -28
Janumet 329 354 683 454 476 931 417 353 1,700 -26 -23 -27 -24
Other Pharmaceutical ^(8)^ 584 553 1,138 602 528 1,131 603 583 2,319 5 8 1 4
ANIMAL HEALTH **** 1,491 **** 1,456 **** 2,947 **** 1,482 **** 1,467 **** 2,949 **** 1,371 **** 1,230 **** 5,550 **** -1 **** 2 **** - **** 4
Livestock 849 807 1,656 832 826 1,658 829 814 3,300 -2 2 - 5
Companion<br> Animal 642 649 1,291 650 641 1,291 542 416 2,250 1 2 - 2
Other Revenues ^(9)^ **** 275 **** 122 **** 396 **** 312 **** 370 **** 682 **** 625 **** 420 **** 1,728 **** -67 **** -19 **** -42 **** -20

*200% or greater

^(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 and a milestone payment of $20 million received in the first quarter of 2022.

^(4)^Total Vaccines sales were $3,133 million and $3,557 million in the first and second quarter of 2023, respectively, and $2,481 million and $2,709 million in the first and second quarter of 2022, 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 $950 million and $951 million in the first and second quarter of 2023, respectively, and $1,305 million and $1,300 million in the first and second quarter of 2022, 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 $51 million and $3 million in the first and second quarter of 2023, respectively, and $114 million and $32 million in the first and second quarter of 2022, respectively.

Exhibit 99.2

MERCK &CO., INC.

CONSOLIDATEDSTATEMENT OF OPERATIONS - GAAP

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table1a

2023 2022 %<br> Change
1Q 2Q June<br><br> YTD 1Q 2Q June<br> <br><br> YTD 3Q 4Q Full<br> Year 2Q June<br><br> YTD
Sales $ 14,487 $ 15,035 $ 29,522 $ 15,901 $ 14,593 $ 30,494 $ 14,959 $ 13,830 $ 59,283 3 % -3 %
Costs, Expenses<br> and Other
Cost of sales 3,926 4,024 7,951 5,380 4,216 9,596 3,934 3,881 17,411 -5 % -17 %
Selling, general and administrative 2,479 2,702 5,182 2,323 2,512 4,834 2,520 2,687 10,042 8 % 7 %
Research and development 4,276 13,321 17,597 2,576 2,798 5,374 4,399 3,775 13,548 * *
Restructuring costs 67 151 218 53 142 194 94 49 337 6 % 12 %
Other (income) expense, net 89 172 259 708 438 1,148 429 (75 ) 1,501 -61 % -77 %
Income (Loss) Before Taxes 3,650 (5,335 ) (1,685 ) 4,861 4,487 9,348 3,583 3,513 16,444 * *
Income Tax Provision 825 637 1,462 554 538 1,092 330 495 1,918
Net Income (Loss) 2,825 (5,972 ) (3,147 ) 4,307 3,949 8,256 3,253 3,018 14,526 * *
Less: Net Income (Loss) Attributable<br> to Noncontrolling Interests 4 3 7 (3 ) 5 2 5 1 7
Net Income (Loss) Attributable<br> to Merck & Co., Inc. $ 2,821 $ (5,975 ) $ (3,154 ) $ 4,310 $ 3,944 $ 8,254 $ 3,248 $ 3,017 $ 14,519 * *
Earnings<br> (Loss) per Common Share Assuming Dilution ^(1)^ $ 1.11 $ (2.35 ) $ (1.24 ) $ 1.70 $ 1.55 $ 3.25 $ 1.28 $ 1.18 $ 5.71 * *
Average<br> Shares Outstanding Assuming Dilution ^(1)^ 2,551 2,539 2,539 2,537 2,540 2,538 2,542 2,548 2,542
Tax Rate<br> from Continuing Operations 22.6 % -11.9 % -86.8 % 11.4 % 12.0 % 11.7 % 9.2 % 14.1 % 11.7 %

* 100% or greater

Sum of quarterly amounts may not equal year-to-date amounts due to rounding.

^(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, 2022 GAAP TO NON-GAAP RECONCILIATION
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2b
GAAP Acquisition and Divestiture- Related Costs ^(1)^ Restructuring Costs ^(2)^ (Income)<br> Loss from<br><br> Investments in Equity<br><br> Securities Adjustment<br> Subtotal Non-GAAP
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Second<br> Quarter
Cost of sales $ 4,216 451 67 518 $ 3,698
Selling,<br> general and administrative 2,512 65 27 92 2,420
Research<br> and development 2,798 12 22 34 2,764
Restructuring<br> costs 142 142 142 -
Other (income)<br> expense, net 438 2 234 236 202
Income Before<br> Taxes 4,487 (530 ) (258 ) (234 ) (1,022 ) 5,509
Income Tax<br> Provision (Benefit) 538 (131 )^(3)^ (40 )^(3)^ (52 )^(3)^ (223 ) 761
Net Income 3,949 (399 ) (218 ) (182 ) (799 ) 4,748
Net Income<br> Attributable to Merck & Co., Inc. 3,944 (399 ) (218 ) (182 ) (799 ) 4,743
Earnings<br> per Common Share Assuming Dilution $ 1.55 (0.16 ) (0.09 ) (0.07 ) (0.32 ) $ 1.87
Tax Rate 12.0 % 13.8 %
June YTD
Cost of sales $ 9,596 1,131 113 1,244 $ 8,352
Selling,<br> general and administrative 4,834 115 48 163 4,671
Research<br> and development 5,374 34 29 63 5,311
Restructuring<br> costs 194 194 194 -
Other (income)<br> expense, net 1,148 (112 ) 918 806 342
Income Before<br> Taxes 9,348 (1,168 ) (384 ) (918 ) (2,470 ) 11,818
Income Tax<br> Provision (Benefit) 1,092 (286 )^(3)^ (62 )^(3)^ (204 )^(3)^ (552 ) 1,644
Net Income 8,256 (882 ) (322 ) (714 ) (1,918 ) 10,174
Net Income<br> Attributable to Merck & Co., Inc. 8,254 (882 ) (322 ) (714 ) (1,918 ) 10,172
Earnings<br> per Common Share Assuming Dilution $ 3.25 (0.35 ) (0.13 ) (0.28 ) (0.76 ) $ 4.01
Tax Rate 11.7 % 13.9 %
Only<br> the line items that are affected by non-GAAP adjustments are shown.
---
Merck<br> is providing certain non-GAAP information that excludes certain items because of the nature of these items and the impact they have<br> on the analysis of underlying business performance and trends.  Management believes that providing non-GAAP information<br> enhances investors’ understanding of the company’s results because management uses non-GAAP measures to assess performance.  Management<br> uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with<br> other metrics.  In addition, senior management’s annual compensation is derived in part using a non-GAAP pretax income<br> metric.  The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior<br> to, information prepared in accordance with GAAP.
^(1)^Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts<br> included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions<br> and divestitures.  Amounts included in research and development expenses primarily reflect expenses for the amortization<br> of intangible assets.  Amounts included in other (income) expense, net, for the six-month period primarily reflect royalty<br> income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination<br> of the Sanofi-Pasteur MSD joint venture.
^(2)^Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or<br> 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<br> of the non-GAAP adjustments.

MERCK & CO., INC.

FRANCHISE/ KEY PRODUCT SALES

SECONDQUARTER 2023

(AMOUNTSIN MILLIONS)

(UNAUDITED)

Table3a

Global U.S. International
2Q 2023 2Q 2022 % Change 2Q 2023 2Q 2022 % Change 2Q 2023 2Q 2022 % Change
TOTAL SALES ^(1)^ $ 15,035 $ 14,593 3 $ 7,018 $ 6,238 12 $ 8,018 $ 8,355 -4
PHARMACEUTICAL 13,457 12,756 6 6,570 5,726 15 6,887 7,030 -2
Oncology
Keytruda 6,271 5,252 19 3,863 3,197 21 2,408 2,055 17
Alliance<br> Revenue – Lynparza ^(2)^ 310 275 13 144 143 1 166 132 26
Alliance<br> Revenue – Lenvima ^(2)^ 242 231 5 163 128 28 79 103 -24
Welireg 50 27 89 49 27 84 2 *
Alliance Revenue – Reblozyl 47 33 41 36 28 26 11 5 123
Vaccines ^(3)^
Gardasil / Gardasil 9 2,458 1,674 47 464 428 8 1,994 1,245 60
ProQuad / M-M-R II / Varivax 582 578 1 447 434 3 135 143 -6
Vaxneuvance 168 12 * 147 11 * 20 *
RotaTeq 131 173 -25 93 98 -5 37 75 -50
Pneumovax 23 92 153 -40 23 94 -76 69 59 17
Vaqta 42 35 20 29 16 76 13 19 -29
Hospital Acute Care
Bridion 502 426 18 299 237 27 203 190 7
Prevymis 143 103 39 61 47 31 82 56 46
Dificid 76 66 14 68 63 8 8 3 144
Noxafil 55 60 -8 11 16 -32 45 45 -
Zerbaxa 54 46 17 30 22 36 24 24 -1
Primaxin 53 64 -16 -2 * 56 64 -13
Cardiovascular
Alliance<br> Revenue - Adempas/Verquvo ^(4)^ 68 98 -31 70 88 -21 -2 10 -119
Adempas<br> ^(5)^ 65 63 3 65 63 3
Virology
Lagevrio 203 1,177 -83 2 * 201 1,177 -83
Isentress / Isentress HD 136 147 -7 56 67 -16 80 80 1
Neuroscience
Belsomra 63 69 -9 21 19 10 42 50 -16
Immunology
Simponi 180 181 -1 180 181 -1
Remicade 48 53 -11 48 53 -11
Diabetes ^(6)^
Januvia 511 756 -33 243 301 -19 267 455 -41
Janumet 354 476 -26 82 105 -22 272 371 -27
Other Pharmaceutical ^(7)^ 553 528 5 171 157 9 382 372 3
ANIMAL HEALTH 1,456 1,467 -1 475 477 -1 982 990 -1
Livestock 807 826 -2 165 164 1 643 662 -3
Companion Animal 649 641 1 310 313 -1 339 328 4
Other Revenues ^(8)^ 122 370 -67 -27 35 -177 149 335 -56
*200%<br> or greater
---
Sum of<br> U.S. plus international may not equal global 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<br> costs.
^(3)^Total Vaccines sales were $3,557 million in the second quarter of 2023 and $2,709 million in the second quarter of 2022.
^(4)^Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net<br> of cost of sales and commercialization costs.
^(5)^Net product sales in Merck's marketing territories.
^(6)^Total Diabetes sales were $951 million in the second quarter of 2023 and $1,300 million in the second quarter of 2022.
^(7)^Includes Pharmaceutical products not individually shown above.
^(8)^Other Revenues are comprised primarily of revenues from third-party manufacturing arrangements and miscellaneous corporate<br> revenues, including revenue-hedging activities.  Other Revenues related to the receipt of upfront and milestone payments<br> for out-licensed products were $3 million in the second quarter of 2023 and $32 million in the second quarter of 2022.

MERCK & CO., INC.

FRANCHISE/ KEY PRODUCT SALES

JUNEYEAR-TO-DATE 2023

(AMOUNTSIN MILLIONS)

(UNAUDITED)

Table3b

Global U.S. International
June YTD<br><br> 2023 June YTD<br><br> 2022 % Change June YTD<br><br> 2023 June YTD<br><br> 2022 % Change June YTD<br><br> 2023 June YTD<br><br> 2022 % Change
TOTAL SALES ^(1)^ $ 29,522 $ 30,494 -3 $ 13,676 $ 13,577 1 $ 15,846 $ 16,917 -6
PHARMACEUTICAL 26,179 26,863 -3 12,688 12,498 2 13,491 14,364 -6
Oncology
Keytruda 12,065 10,061 20 7,348 5,976 23 4,718 4,085 15
Alliance Revenue – Lynparza ^(2)^ 585 541 8 286 283 1 299 257 16
Alliance Revenue – Lenvima ^(2)^ 474 459 3 316 284 11 158 175 -10
Welireg 92 45 105 90 45 99 3 *
Alliance Revenue – Reblozyl ^(3)^ 90 86 4 66 55 19 24 30 -22
Vaccines ^(4)^
Gardasil / Gardasil 9 4,430 3,133 41 880 846 4 3,550 2,287 55
ProQuad / M-M-R II / Varivax 1,109 1,047 6 868 805 8 242 243 -
RotaTeq 428 389 10 273 273 - 155 116 34
Vaxneuvance 274 16 * 241 16 * 33 1 *
Pneumovax 23 188 325 -42 63 212 -70 125 114 10
Vaqta 82 71 16 59 45 30 23 25 -8
Hospital Acute Care
Bridion 989 821 21 576 432 33 413 389 6
Prevymis 273 197 39 116 87 34 157 110 43
Dificid 141 119 19 130 113 15 11 6 80
Primaxin 133 122 9 2 1 128 132 122 8
Noxafil 116 118 -2 25 25 -2 91 92 -2
Zerbaxa 104 76 36 57 40 42 47 36 29
Cardiovascular
Alliance Revenue - Adempas/Verquvo ^(5)^ 167 170 -2 153 159 -4 14 11 24
Adempas ^(6)^ 125 124 - 125 124 -
Virology
Lagevrio 595 4,424 -87 1,523 -100 595 2,901 -79
Isentress / Isentress HD 259 305 -15 108 128 -16 151 177 -15
Neuroscience
Belsomra 119 137 -14 37 39 -6 82 98 -17
Immunology
Simponi 359 366 -2 359 366 -2
Remicade 99 114 -13 99 114 -13
Diabetes ^(7)^
Januvia 1,062 1,535 -31 514 626 -18 548 909 -40
Janumet 683 931 -27 138 168 -18 544 762 -29
Other Pharmaceutical ^(8)^ 1,138 1,131 1 342 317 8 793 814 -3
ANIMAL HEALTH 2,947 2,949 - 956 951 1 1,991 1,998 -
Livestock 1,656 1,658 - 338 335 1 1,318 1,322 -
Companion Animal 1,291 1,291 - 618 616 - 673 676 -
Other Revenues ^(9)^ 396 682 -42 32 128 -75 364 555 -34
*200%<br> or greater
---
Sum of<br> U.S. plus international may not equal global 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<br> costs.
^(3)^Alliance Revenue represents royalties and a milestone payment of $20 million received in the first quarter of 2022.
^(4)^Total Vaccines sales were $6,690 million and $5,191 million on a global share basis for June YTD 2023 and 2022, respectively.
^(5)^Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net<br> of cost of sales and commercialization costs.
^(6)^Net product sales in Merck's marketing territories.
^(7)^Total Diabetes sales were $1,901 million and $2,605 million on a global share basis for June YTD 2023 and 2022, 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<br> revenues, including revenue-hedging activities.  Other Revenues related to the receipt of upfront and milestone payments<br> for out-licensed products were $54 million and $146 million on a global share basis for June YTD 2023 and 2022, respectively.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

2023 2022 % Change
1Q 2Q June YTD 1Q 2Q June YTD 3Q 4Q Full Year 2Q June YTD
TOTAL PHARMACEUTICAL $ 12,721 $ 13,457 $ 26,179 $ 14,107 $ 12,756 $ 26,863 $ 12,963 $ 12,180 $ 52,005 6 -3
United States 6,117 6,570 12,688 6,773 5,726 12,499 6,620 5,871 24,989 15 2
% Pharmaceutical Sales 48.1 % 48.8 % 48.5 % 48.0 % 44.9 % 46.5 % 51.1 % 48.2 % 48.1 %
Europe ^(1)^ 2,326 2,401 4,727 3,309 2,677 5,986 2,427 2,494 10,906 -10 -21
% Pharmaceutical Sales 18.3 % 17.8 % 18.1 % 23.5 % 21.0 % 22.3 % 18.7 % 20.5 % 21.0 %
China 1,694 1,887 3,581 1,113 1,355 2,468 1,419 1,216 5,102 39 45
% Pharmaceutical Sales 13.3 % 14.0 % 13.7 % 7.9 % 10.6 % 9.2 % 10.9 % 10.0 % 9.8 %
Asia Pacific (other than China and Japan) 703 705 1,409 786 854 1,640 702 691 3,034 -17 -14
% Pharmaceutical Sales 5.5 % 5.2 % 5.4 % 5.6 % 6.7 % 6.1 % 5.4 % 5.7 % 5.8 %
Japan 737 652 1,390 965 1,092 2,057 653 832 3,542 -40 -32
% Pharmaceutical Sales 5.8 % 4.8 % 5.3 % 6.8 % 8.6 % 7.7 % 5.0 % 6.8 % 6.8 %
Latin America 470 566 1,036 435 453 888 511 472 1,871 25 17
% Pharmaceutical Sales 3.7 % 4.2 % 4.0 % 3.1 % 3.6 % 3.3 % 3.9 % 3.9 % 3.6 %
Eastern Europe/Middle East/Africa 381 370 751 450 339 789 360 320 1,469 9 -5
% Pharmaceutical Sales 3.0 % 2.7 % 2.9 % 3.2 % 2.7 % 2.9 % 2.8 % 2.6 % 2.8 %
Canada 141 127 268 189 166 354 166 158 678 -23 -24
% Pharmaceutical Sales 1.1 % 0.9 % 1.0 % 1.3 % 1.3 % 1.3 % 1.3 % 1.3 % 1.3 %
Other 152 179 329 87 94 182 105 126 414 90 81
% Pharmaceutical Sales 1.2 % 1.6 % 1.1 % 0.6 % 0.6 % 0.7 % 0.9 % 1.0 % 0.8 %
Sum of quarterly<br> amounts may not equal year-to-date amounts due to rounding.
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^(1)^Europe represents<br> all European Union countries, the European Union accession markets and the United Kingdom.

MERCK & CO., INC.

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

OTHER (INCOME) EXPENSE, NET

**** 2Q23 **** 2Q22 **** June YTD 2023 **** June YTD 2022 ****
Interest income $ (109 ) $ (15 ) $ (221 ) $ (22 )
Interest expense 277 240 519 483
Exchange losses 62 86 122 124
Loss (income) from investments in equity securities, net ^(1)^ 175 284 (274 ) 991
Net periodic defined benefit plan (credit) cost other than service cost (111 ) (27 ) (226 ) (148 )
Other, net (122 ) (130 ) 339 (280 )
Total $ 172 $ 438 $ 259 $ 1,148
^(1)^Includes<br> net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests<br> in investment funds.  Unrealized gains and losses from investments that are directly owned are determined at the end of<br> the reporting period, while gains and losses from ownership interests in investment funds are accounted for on a one quarter lag.
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