8-K - MRK - Equibles

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) October 27, 2020

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.)

2000 Galloping Hill Road, Kenilworth, NJ<br> <br>(Address of principal executive offices)	07033<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 Stock ($0.50 par value)	MRK	New York Stock Exchange
1.125% Notes due 2021	MRK/21	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. (the “Company”) on October 27, 2020, regarding earnings for the third quarter of 2020, 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 October 27, 2020, regarding earnings for the third quarter of 2020
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)

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: October 27, 2020	By:	/s/ Kelly Grez
		KELLY GREZ
		Deputy Corporate Secretary

Exhibit 99.1

News<br> Release

FOR IMMEDIATE RELEASE

Media Contacts:	Pamela Eisele	Investor Contacts:	Peter Dannenbaum
	(267) 305-3558		(908) 740-1037
	Patrick Ryan		Michael DeCarbo
	(201) 452-2409		(908) 740-1807

Merck Announces Third-Quarter 2020 FinancialResults

·	Third-Quarter 2020 Worldwide Sales Were $12.6 Billion, an Increase<br>of 1%; Excluding the Impact from Foreign Exchange, Sales Grew 2%
o	KEYTRUDA Sales Grew 21% to $3.7 Billion
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o	Animal Health Sales Grew 9% to $1.2 Billion; Excluding the Impact from Foreign Exchange, Sales Grew 12%
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·	Third-Quarter 2020 GAAP EPS Was $1.16; Third-Quarter Non-GAAP EPS<br>Was $1.74
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·	Advanced and Expanded Broad Pipeline
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o	Announced Additional Positive Phase 3 Results for Investigational Pneumococcal Conjugate Vaccine (V114) in Adults
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o	Presented Phase 3 Data for Investigational Gefapixant in Development for Chronic Cough; Early Data for MK-4830 in Oncology<br>and MK-8507 for HIV
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o	Expanded Pipeline with Seagen Collaborations in Oncology
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·	Company Advances Research Programs and Clinical Trials for COVID-19-Related<br>Vaccine and Orally Available Antiviral Research Candidates
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·	Company Narrows and Raises 2020 Full-Year Revenue Range to be Between<br>$47.6 Billion and $48.6 Billion, Including a Negative Impact from Foreign Exchange of Approximately 1.5%
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·	Company Narrows and Lowers 2020 Full-Year GAAP EPS<br>Range to be Between $4.55 and $4.65; Narrows and Raises 2020 Full-Year Non-GAAP EPS Range to be Between $5.91 and $6.01, Including<br>a Negative Impact from Foreign Exchange of Approximately 2.5%
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KENILWORTH, N.J., Oct. 27, 2020 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2020.

“We continue to execute on our strategic priorities and remain confident we will achieve solid full-year revenue growth despite the impact of the ongoing COVID-19 pandemic. Demand for our products remains robust, and production, supply and distribution of our medicines, vaccines and animal health products are moving forward with minimal disruption,” said Kenneth C. Frazier, chairman and chief executive officer, Merck. “I am confident in our ability to advance our promising pipeline and clinical trials despite the challenging environment, and I believe that our leadership and track record of solid commercial execution will continue to drive long-term growth.”

Financial Summary

	Third Quarter
$ in millions, except EPS amounts	2020		2019		Change			Change Ex-<br> Exchange
Sales	$	12,551	$	12,397		1	%		2	%
GAAP net income^1^		2,941		1,901		55	%		59	%
Non-GAAP<br> net income that excludes certain items^1,2*^		4,427		3,873		14	%		17	%
GAAP EPS		1.16		0.74		57	%		62	%
Non-GAAP<br> EPS that excludes certain items^2*^		1.74		1.51		16	%		18	%

*Refer to table on page 11.

GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) was $1.16 for the third quarter of 2020. Non-GAAP EPS of $1.74 for the third quarter of 2020 excludes acquisition- and divestiture-related costs, restructuring costs, pretax charges of $1.1 billion related to certain license and collaboration agreements, and certain other items. Year-to-date results can be found in the attached tables.

COVID-19 Research Highlights

Building on the company’s experience with antivirals and vaccines, Merck advanced its multiple scientific programs in an effort to help combat SARS-CoV-2, specifically,

·	Molnupiravir (formerly known as MK-4482) -- an orally available<br>antiviral candidate in development for the treatment of COVID-19 in collaboration with Ridgeback Bio with the initiation of two<br>large pivotal Phase 2/3 trials: a trial anticipated to enroll approximately 1,450 non-hospitalized adult COVID-19 patients (outpatient)<br>and another planned to enroll approximately 1,300 hospitalized adult COVID-19 patients;
·	V591 -- a SARS-CoV-2 vaccine candidate that uses a measles<br>virus vector platform has entered Phase 1 development; and
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·	V590 -- a SARS-CoV-2 vaccine candidate in development in collaboration<br>with the International AIDS Vaccine Initiative (IAVI) that uses a recombinant vesicular stomatitis virus (rVSV) platform, the same<br>platform used for Merck’s approved Ebola Zaire virus vaccine, will enter Phase 1 development shortly.
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^1^	Net income attributable to Merck & Co., Inc.
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^2^	Merck is providing certain 2020 and 2019 non-GAAP information<br>that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business<br>performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s<br>results and permits investors to understand how management assesses performance. Management uses these measures internally for<br>planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, senior<br>management’s annual compensation is derived in part using non-GAAP pretax income. This information should be considered<br>in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of<br>the items, see Table 2a attached to this release.

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Oncology Pipeline Highlights

Merck continued to advance the development programs for KEYTRUDA (pembrolizumab), the company’s anti-PD-1 therapy; Lynparza (olaparib), a PARP inhibitor being co-developed and co-commercialized with AstraZeneca; and Lenvima (lenvatinib mesylate), an orally available tyrosine kinase inhibitor being co-developed and co-commercialized with Eisai Co., Ltd. (Eisai), in addition to other notable developments as follows:

·	Merck announced the following regulatory milestones for KEYTRUDA:
o	Approval in the United States by the Food and Drug Administration (FDA) of an expanded indication as monotherapy for the treatment<br>of adult patients with relapsed or refractory classical Hodgkin lymphoma (cHL) based on the Phase 3 KEYNOTE-204 trial and an updated<br>pediatric indication for the treatment of pediatric patients with refractory cHL or cHL that has relapsed after two or more lines<br>of therapy, both of which were previously approved under the FDA’s accelerated approval process; and
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o	Two approvals in Japan: (1) as monotherapy for the treatment of patients whose tumors are PD-L1-positive and have radically<br>unresectable, advanced or recurrent esophageal squamous cell carcinoma (ESCC) who have progressed after chemotherapy based on the<br>KEYNOTE-181 trial; and (2) use at an additional recommended dosage of 400 mg every six weeks (Q6W) administered as an intravenous<br>infusion over 30 minutes across all adult indications, including KEYTRUDA monotherapy and combination therapy.
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·	Merck presented results from the pivotal Phase 3 KEYNOTE-590 trial<br>for the first-line treatment of patients with locally advanced or metastatic esophageal and gastroesophageal junction (GEJ) cancer<br>at the European Society for Medical Oncology (ESMO) Virtual Congress 2020. In the study, KEYTRUDA in combination with platinum-based<br>chemotherapy (cisplatin plus 5-fluorouracil [5-FU]) significantly improved overall survival (OS) and progression-free survival<br>(PFS) versus chemotherapy regardless of histology or PD-L1 expression status.
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·	Merck presented five-year survival results from the pivotal Phase<br>3 KEYNOTE-024 trial at the ESMO Virtual Congress 2020, which demonstrated a sustained, long-term survival benefit and durable responses<br>with KEYTRUDA versus chemotherapy as a first-line treatment in patients with metastatic non-small cell lung cancer (NSCLC) whose<br>tumors express PD-L1 (tumor proportion score [TPS] ≥50%) with no EGFR or ALK genomic tumor aberrations. Results from KEYNOTE-024<br>represent the longest follow-up survival data for an immunotherapy in a randomized Phase 3 study for the first-line treatment of<br>metastatic NSCLC.
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·	Merck presented long-term findings from the EORTC1325/KEYNOTE-054<br>trial evaluating KEYTRUDA as adjuvant therapy in resected, high-risk stage III melanoma at the ESMO Virtual Congress 2020.
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·	Merck presented three-year survival data from the KEYNOTE-021<br> (Cohort G) study that evaluated KEYTRUDA in combination with chemotherapy in patients with advanced nonsquamous NSCLC<br> regardless of PD-L1 expression with no EGFR or ALK genomic tumor aberrations at the IASLC 2020 North America Conference<br> on Lung Cancer (NACLC). Updated follow-up data from a Phase 1/2 study of quavonlimab<br>(MK-1308), a novel investigational anti-CTLA-4 antibody, in combination with KEYTRUDA in patients with advanced NSCLC also was<br>presented; a Phase 3 study of quavonlimab coformulated with KEYTRUDA in first-line advanced NSCLC is planned.
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·	Merck and AstraZeneca announced the adoption of two positive opinions<br>by the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for Lynparza:
o	As a first-line maintenance treatment with bevacizumab for homologous recombination deficient (HRD)-positive advanced ovarian<br>cancer who are in complete or partial response following completion of first-line platinum-based chemotherapy in combination with<br>bevacizumab based on the Phase 3 PAOLA-1 trial, and
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o	As monotherapy for the treatment of BRCA1/2 metastatic castration-resistant prostate cancer (mCRPC) patients who have<br>progressed following a prior therapy that included a new hormonal agent based on the Phase 3 PROfound trial. Final results from<br>this study were recently presented at the ESMO Virtual Congress 2020.
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·	Merck and AstraZeneca presented positive five-year follow-up data<br>from the Phase 3 SOLO-1 trial, which demonstrated a long-term PFS benefit of Lynparza versus placebo as a first-line maintenance<br>treatment in patients with newly diagnosed, advanced BRCA-mutated (BRCAm) ovarian cancer who were in complete or<br>partial response to platinum-based chemotherapy.
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·	Merck and Eisai presented first-time data from two studies evaluating<br>KEYTRUDA plus Lenvima at the ESMO Virtual Congress 2020: data from the Phase 2 LEAP-004 study for the second-line treatment of<br>patients with unresectable or advanced melanoma who progressed on anti-PD-1/PD-L1 therapy and from the Phase 2 LEAP-005 study in<br>previously-treated patients with six tumor types, including biliary tract cancer, colorectal cancer, gastric cancer, glioblastoma<br>multiforme, ovarian cancer and triple-negative breast cancer.
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·	Merck also presented new data for three investigational medicines<br>from its oncology pipeline at the ESMO Virtual Congress 2020:
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o	New Phase 1 data for the company’s anti-TIGIT therapy vibostolimab (MK-7684) as monotherapy and in combination with KEYTRUDA<br>in patients with metastatic NSCLC,
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o	First-time Phase 1 results for the novel anti-immunoglobulin-like transcript 4 (ILT4) therapy MK-4830 in patients with advanced<br>solid tumors, and
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o	New Phase 2 data evaluating the hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor MK-6482 in von Hippel-Lindau (VHL)<br>patients with non-renal cell carcinoma (RCC) tumors and updated data in VHL patients with clear cell RCC.
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Other Pipeline Highlights

·	Merck announced that two Phase 3 adult studies [the pivotal PNEU-AGE<br>trial (V114-019) as well as the PNEU-TRUE trial (V114-020)] and separately two other Phase 3 adult studies [the PNEU-PATH (V114-016)<br>and PNEU-DAY (V114-017) trials], evaluating the safety, tolerability and immunogenicity of V114, the company’s investigational<br>15-valent pneumococcal conjugate vaccine, each met their primary immunogenicity objectives. These findings, and additional Phase<br>3 data from the clinical program, will form the basis of global regulatory licensure applications beginning with the FDA before<br>the end of the year.
·	Merck presented results from two pivotal Phase 3 trials (COUGH-1 and<br>COUGH-2) evaluating gefapixant, an investigational, orally administered selective P2X3 receptor antagonist, in which gefapixant<br>45 mg twice daily demonstrated a statistically significant reduction in 24-hour cough frequency compared to placebo at Week 12<br>and 24 in adult patients with refractory or unexplained chronic cough. The gefapixant 15 mg twice daily treatment arms did not<br>meet the primary efficacy endpoint in either Phase 3 study. The results were presented at the Virtual European Respiratory Society<br>(ERS) International Congress 2020.
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·	Merck presented Week 96 data from the Phase 2b trial that showed islatravir,<br>the company’s investigational oral nucleoside reverse transcriptase translocation inhibitor (NRTTI), in combination with<br>doravirine (PIFELTRO), maintained viral suppression in treatment-naïve adults with HIV-1 infection. Also presented at the<br>virtual 2020 International Congress on Drug Therapy in HIV Infection (HIV Glasgow 2020 Virtual) were results from Phase 1/1b studies<br>for MK-8507, the company’s investigational once-weekly, oral non-nucleoside reverse transcriptase inhibitor (NNRTI), that<br>support further investigation for once-weekly oral administration as part of combination antiretroviral therapy.
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·	The FDA has granted V181, the company’s investigational dengue<br>vaccine in Phase 1 development, Fast Track designation.
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Business Developments

·	Merck and Seagen Inc. (formerly known as Seattle Genetics, Inc.) announced<br>two strategic oncology collaborations, in which Merck will make $810 million of upfront payments in the aggregate as well as acquire<br>a $1 billion equity stake in Seagen common stock:
o	Companies to co-develop and co-commercialize Seagen’s ladiratuzumab vedotin, an investigational antibody-drug conjugate<br>targeting LIV-1, globally; and
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o	Companies enter into exclusive license and co-development agreement to accelerate global reach of Tukysa (tucatinib), a small<br>molecule tyrosine kinase inhibitor for the treatment of HER-2 positive cancers. Merck was granted an exclusive license to commercialize<br>Tukysa in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe.
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·	Merck and Hanmi Pharmaceutical announced that the companies have entered<br>into an exclusive licensing agreement for the development, manufacture and commercialization of efinopegdutide (formerly HM12525A),<br>Hanmi’s investigational once-weekly glucagon-like peptide-1 (GLP-1)/glucagon receptor dual agonist, for the treatment of<br>nonalcoholic steatohepatitis (NASH);
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·	Merck announced the completion of its acquisition of IdentiGEN, a<br>leader in DNA-based animal traceability solutions for livestock and aquaculture; and
·	Merck announced the completion of its acquisition of the worldwide<br>rights to VECOXAN (diclazuril), an oral suspension for the prevention of coccidiosis in calves and lambs.
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Organon & Co.

·	Merck continued to make progress on the Organon & Co. (Organon)<br>spinoff, including additional leadership appointments, and expects the transaction to be completed in the second quarter of 2021.

Third-Quarter Financial Impact ofCOVID-19

In the third quarter, the estimated negative impact of the COVID-19 pandemic to Merck’s pharmaceutical revenue was approximately $475 million, bringing the company’s year-to-date negative impact on revenue to approximately $2.1 billion. Lower back-to-school demand negatively impacted vaccine sales, in particular GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) in the U.S. In addition, access to health care providers remains reduced, although improved from the second quarter. The negative impact to Animal Health sales in the third quarter was immaterial.

Operating expenses were positively impacted in the third quarter by approximately $115 million, primarily driven by lower promotional and selling costs as well as lower research and development (R&D) expenses, net of investments in COVID-19-related antiviral and vaccine research programs.

Third-Quarter Revenue Performance

The following table reflects sales of the company’s top pharmaceutical products, as well as sales of animal health products.

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	Third Quarter
$<br>in millions	** 2020**		** 2019**		** Change**			Change Ex-<br><br>Exchange
Total Sales	$	12,551	$	12,397		1	%		2	%
Pharmaceutical		11,320		11,095		2	%		2	%
KEYTRUDA		3,715		3,070		21	%		21	%
JANUVIA / JANUMET		1,327		1,311		1	%		2	%
GARDASIL / GARDASIL 9		1,187		1,320		-10	%		-10	%
PROQUAD, M-M-R II and VARIVAX		576		623		-8	%		-7	%
PNEUMOVAX 23		375		237		58	%		58	%
BRIDION		320		284		13	%		13	%
ROTATEQ		210		180		16	%		17	%
SIMPONI		209		203		3	%		0	%
ISENTRESS / ISENTRESS HD		205		250		-18	%		-18	%
Lynparza*		196		123		59	%		58	%
IMPLANON / NEXPLANON		189		199		-5	%		-4	%
Lenvima*		142		109		30	%		29	%
Animal Health		1,220		1,122		9	%		12	%
Livestock		758		726		5	%		8	%
Companion Animals		462		396		17	%		18	%
Other Revenues**		11		180		-94	%		-33	%

*Alliance revenue for these products represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.

**Other revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

Pharmaceutical Revenue

Third-quarter pharmaceutical sales increased by $225 million, or 2%, to $11.3 billion. The increase was driven primarily by growth in oncology and certain hospital acute care products, partially offset by the negative impact of the COVID-19 pandemic and the ongoing impacts of the loss of market exclusivity for several products.

Growth in oncology was largely driven by higher sales of KEYTRUDA, which grew 21% to $3.7 billion in the quarter. In the U.S., sales of KEYTRUDA grew 24% to $2.2 billion. Global sales growth of KEYTRUDA reflects continued strong momentum from the NSCLC indications as well as continued uptake in other indications, including adjuvant melanoma, RCC, bladder, head and neck squamous cell carcinoma (HNSCC) and microsatellite instability-high (MSI-H) cancers as well as uptake following the recent launch of the Q6W dosing regimen in the U.S., partially offset by the negative impacts of the COVID-19 pandemic and pricing in Japan. Also contributing to growth in oncology was higher alliance revenue related to Lynparza and Lenvima reflecting continued uptake in approved indications in the U.S., Europe and China.

Performance in hospital acute care reflects higher demand globally for BRIDION (sugammadex), a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults undergoing surgery and the ongoing launch of PREVYMIS (letermovir), a medicine for prophylaxis (prevention) of cytomegalovirus (CMV) infection and disease in adult CMV-seropositive recipients of an allogeneic hematopoietic stem cell transplant.

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In addition, sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI) increased slightly in the quarter reflecting strong demand from certain international markets, partially offset by continued pricing pressure in the U.S.

Vaccine sales performance reflects higher sales of PNEUMOVAX 23 (pneumococcal vaccine polyvalent), a vaccine to help prevent pneumococcal disease, primarily driven by higher volumes in the U.S., Europe and Japan attributable in part to increased demand for pneumococcal vaccination during the COVID-19 pandemic.

Vaccine sales were negatively affected by declines in sales of GARDASIL [Human Papillomavirus Quadrivalent (Types 6,11,16 and 18) Vaccine, Recombinant]/GARDASIL 9, vaccines to prevent certain cancers and other diseases caused by HPV, largely due to lower demand in the U.S. and Hong Kong, SAR, PRC attributable to the COVID-19 pandemic, partially offset by higher volumes in China and in Europe.

Combined sales of pediatric vaccines VARIVAX (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox; PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a combination vaccine to help protect against measles, mumps, rubella and varicella; and M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella, declined in the third quarter, primarily due to lower demand in the U.S. related to the COVID-19 pandemic.

Pharmaceutical sales in the quarter were negatively affected by the ongoing impacts from the loss of market exclusivity, including for NUVARING (etonogestrel/ethinyl estradiol vaginal ring), NOXAFIL (posaconazole) and EMEND (aprepitant)/EMEND (fosaprepitant dimeglumine) for Injection.

AnimalHealth Revenue

Animal Health sales totaled $1.2 billion in the third quarter of 2020, an increase of 9% compared with the third quarter of 2019; excluding the unfavorable effect from foreign exchange, Animal Health sales grew 12%. Growth in companion animal products was driven largely by higher demand in companion animal vaccines and higher demand for the BRAVECTO (fluralaner) line of products for parasitic control. Performance in livestock products reflects higher demand globally for ruminant, poultry and swine products.

Third-QuarterExpense, EPS and Related Information

The tables below present selected expense information.

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$<br> in millions	<br><br><br><br>GAAP			Acquisition- and Divestiture-Related Costs^3^		**<br><br>Restructuring Costs**		**<br><br>Certain Other Items**			<br><br><br><br>Non-GAAP^2^
Third-Quarter 2020
Cost<br> of sales	$	3,481		$	285	$	38	$	–		$	3,158
Selling,<br> general and administrative		2,450			207		15		–			2,228
Research<br> and development		3,390			16		19		1,082			2,273
Restructuring<br> costs		114			–		114		–			–
Other<br> (income) expense, net		(312	)		–		–		(1	)		(311	)
Third-Quarter<br> 2019
Cost<br> of sales	$	3,990		$	941	$	62	$	–		$	2,987
Selling,<br> general and administrative		2,589			22		1		–			2,566
Research<br> and development		3,204			6		1		982			2,215
Restructuring<br> costs		232			–		232		–			–
Other<br> (income) expense, net		35			6		–		–			29

GAAPExpense, EPS and Related Information

Gross margin was 72.3% for the third quarter of 2020 compared to 67.8% for the third quarter of 2019. The increase reflects lower acquisition- and divestiture-related costs and the favorable effect of product mix, partially offset by the unfavorable effects of pricing pressure, inventory write-offs, higher amortization of intangible assets related to collaborations and foreign exchange.

Selling, general and administrative expenses were $2.5 billion in the third quarter of 2020, a decrease of 5% compared to the third quarter of 2019. The decrease primarily reflects lower administrative and selling costs, including less travel and meeting expenses, due in part to the COVID-19 pandemic, partially offset by higher acquisition- and divestiture-related costs, primarily reflecting costs related to the company’s planned spinoff of Organon.

Research and development expenses were $3.4 billion in the third quarter of 2020, an increase of 6% compared with the third quarter of 2019. The increase was primarily driven by higher upfront payments related to collaborations and license agreements, higher expenses related to clinical development and increased investment in discovery research and early drug development, partially offset by lower charges for the acquisitions of businesses, as well as lower laboratory, travel and meeting expenses due to the COVID-19 pandemic.

Other (income) expense, net, was $312 million of income in the third quarter of 2020 compared to $35 million of expense in the third quarter of 2019, primarily due to higher income from investments in equity securities, net, which was $360 million in 2020 compared with $16 million in 2019, largely from the recognition of unrealized gains on securities.

^3^

Includes<br>expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of<br>acquisitions, intangible asset impairment charges, and expense or income related to changes in the estimated fair value measurement<br>of liabilities for contingent consideration. Also includes integration, transaction and certain other costs related to business<br>acquisitions and divestitures.

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The effective income tax rate was 14.1% for the third quarter of 2020 compared to 18.7% in the third quarter of 2019. The effective income tax rate in 2019 reflects the unfavorable impact of a charge for the acquisition of Peloton Therapeutics, Inc. (Peloton) for which no tax benefit was recognized.

GAAP EPS was $1.16 for the third quarter of 2020 compared with $0.74 for the third quarter of 2019.

Non-GAAPExpense, EPS and Related Information

Non-GAAP gross margin was 74.8% for the third quarter of 2020 compared to 75.9% for the third quarter of 2019. The decrease in non-GAAP gross margin reflects the unfavorable effects of pricing pressure, inventory write-offs, higher amortization of intangible assets related to collaborations and foreign exchange, partially offset by the favorable effect of product mix.

Non-GAAP selling, general and administrative expenses were $2.2 billion in the third quarter of 2020, a decrease of 13% compared to the third quarter of 2019. The decrease primarily reflects lower administrative and selling costs, including less travel and meeting expenses, due in part to the COVID-19 pandemic.

Non-GAAP R&D expenses were $2.3 billion in the third quarter of 2020, a 3% increase compared to the third quarter of 2019. The increase was primarily driven by higher expenses related to clinical development and increased investment in discovery research and early drug development, partially offset by lower laboratory, travel and meeting expenses due to the COVID-19 pandemic.

Non-GAAP other (income) expense, net, was $311 million of income in the third quarter of 2020 compared to $29 million of expense in the third quarter of 2019, primarily due to higher income from investments in equity securities, net, which was $360 million in 2020 compared with $16 million in 2019, largely from the recognition of unrealized gains on securities.

The non-GAAP effective income tax rate was 14.8% for the third quarter of 2020 compared to 15.7% for the third quarter of 2019, reflecting the favorable impact of earnings mix.

Non-GAAP EPS was $1.74 for the third quarter of 2020 compared with $1.51 for the third quarter of 2019.

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

Page 10

	Third<br> Quarter
$<br> in millions, except EPS amounts	2020			2019
EPS
GAAP<br> EPS	$	1.16		$	0.74
Difference		0.58			0.77
Non-GAAP<br> EPS that excludes items listed below^2^	$	1.74		$	1.51
Net<br> Income
GAAP<br> net income^1^	$	2,941		$	1,901
Difference		1,486			1,972
Non-GAAP<br> net income that excludes items listed below^1,2^	$	4,427		$	3,873
Decrease<br> (Increase) in Net Income Due to Excluded Items:
Acquisition-<br> and divestiture-related costs^3^	$	508		$	975
Restructuring<br> costs		186			296
Charges<br> for acquisitions and collaborations^4^		1,082			982
Other		(1	)		–
Net<br> decrease (increase) in income before taxes		1,775			2,253
Income<br> tax (benefit) expense^5^		(289	)		(281	)
Decrease<br> (increase) in net income	$	1,486		$	1,972

FinancialOutlook

The updated full-year guidance that Merck is providing below includes its current assumption of the impact from the COVID-19 pandemic, which is expected to continue to be offset by favorability from underlying business strength. The company continues to assume that the majority of the negative impact occurred during the second quarter. However, it now expects some residual negative impacts in the fourth quarter, largely in Europe and certain emerging markets. In addition, the phasing of the recovery of GARDASIL 9 demand is slower than originally anticipated, in particular in the U.S.

For the full-year 2020, Merck now expects an unfavorable impact to revenue of approximately $2.35 billion (excluding the impact of foreign exchange) due to the COVID-19 pandemic, comprised of approximately $2.3 billion for pharmaceuticals and approximately $50 million for Animal Health, including the impacts in the first three quarters of the year.

For the full-year 2020, Merck now expects a net favorable impact to operating expenses of approximately $625 million, reflecting continued lower spending due to the COVID-19 pandemic, partially offset by spending on its COVID-19-related antiviral and vaccine research programs.

^4^	2020<br>includes $832 million related to the Seagen collaborations; 2019 represents a charge for the acquisition of Peloton.
^5^	Includes<br>the estimated tax impact on the reconciling items, as well as a tax cost of $67 million, representing an adjustment to the tax<br>benefits recorded in conjunction with the 2015 acquisition of Cubist Pharmaceuticals, Inc.

Page 11

Merck narrowed and raised its full-year 2020 revenue range to be between $47.6 billion and $48.6 billion, including a negative impact from foreign exchange of approximately 1.5% at mid-October exchange rates. The company’s guidance assumes $120 million of revenue for the replenishment of doses of GARDASIL 9 that were borrowed from the U.S. Centers for Disease Control and Prevention (CDC) Pediatric Vaccine Stockpile in the fourth quarter of 2019.

Merck narrowed and lowered its full-year 2020 GAAP EPS range to be between $4.55 and $4.65. Merck narrowed and raised its full-year 2020 non-GAAP EPS range to be between $5.91 and $6.01, including a negative impact from foreign exchange of approximately 2.5% at mid-October exchange rates. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs and certain other items.

The following table summarizes the company’s full-year 2020 financial guidance.

	GAAP	Non-GAAP^2^
Revenue	$47.6 to $48.6 billion	$47.6 to $48.6 billion*
Operating expenses	Higher than 2019 by a low-single-digit rate	Lower than 2019 by a low-single-digit rate
Effective tax rate	Approximately 15%	Approximately 15.5%
EPS**	$4.55 to $4.65	$5.91 to $6.01

*The company does not have any non-GAAP adjustments to revenue.

**EPS guidance for 2020 assumes a share count (assuming dilution) of approximately 2.54 billion shares.

A reconciliation of anticipated 2020 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.

$ in millions, except EPS amounts	Full-Year 2020
GAAP EPS		4.55 to 4.65
Difference		1.36
Non-GAAP EPS that excludes items listed below^2^		5.91 to 6.01
Acquisition- and divestiture-related costs		2,300
Restructuring costs		800
Charges for collaborations		1,082
Net decrease (increase) in income before taxes		4,182
Income tax (benefit) expense^5^		(715
Decrease (increase) in net income		3,467

All values are in US Dollars.

EarningsConference Call

Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EDT on Merck’s website at https://www.merck.com/investor-relations/events-and-presentations/. Institutional investors and analysts can participate in the call (833) 353-0277 or toll free (469) 886-1947 and using ID code number 4664137. Members of the media are invited to monitor the call by dialing (833) 353-0277 or toll free (469) 886-1947 and using ID code number 4664137. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team at the conclusion of the call.

Page 12

AboutMerck

For more than 125 years, Merck, known as MSD outside of the United States and Canada, has been inventing for life, bringing forward medicines and vaccines for many of the world’s most challenging diseases in pursuit of our mission to save and improve lives. We demonstrate our commitment to patients and population health by increasing access to health care through far-reaching policies, programs and partnerships. Today, Merck continues to be at the forefront of research to prevent and treat diseases that threaten people and animals – including cancer, infectious diseases such as HIV and Ebola, and emerging animal diseases – as we aspire to be the premier research-intensive biopharmaceutical company in the world. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

Forward-LookingStatement of Merck & Co., Inc., Kenilworth, N.J., USA

This news release of Merck & Co., Inc., Kenilworth, 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 products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements.

Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of 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 2019 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).

Page 13

MERCK & CO., INC.

CONSOLIDATEDSTATEMENT OF INCOME - GAAP

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table1

****	GAAP					****			****	GAAP					****			****
****	3Q20		****	3Q19		****	%Change		****	SepYTD 2020		****	SepYTD 2019		****	%Change		****
Sales	$	12,551		$	12,397			1	%	$	35,479		$	34,972			1	%
Costs,<br>Expenses and Other
Cost<br>of sales ^(1)^		3,481			3,990			-13	%		9,952			10,443			-5	%
Selling,<br>general and administrative ^(1)^		2,450			2,589			-5	%		7,383			7,726			-4	%
Research<br>and development ^(1)^		3,390			3,204			6	%		7,721			7,324			5	%
Restructuring<br>costs ^(2)^		114			232			-51	%		269			444			-39	%
Other<br>(income) expense, net ^(1)^		(312	)		35			*			(630	)		362			*
Income<br>Before Taxes		3,428			2,347			46	%		10,784			8,673			24	%
Taxes<br>on Income ^(1)^		483			440						1,611			1,259
Net<br>Income		2,945			1,907			54	%		9,173			7,414			24	%
Less:<br>Net Income (Loss) Attributable to Noncontrolling Interests ^(1)^		4			6						12			(73	)
Net<br>Income Attributable to Merck & Co., Inc.	$	2,941		$	1,901			55	%	$	9,161		$	7,487			22	%
Earnings<br>per Common Share Assuming Dilution	$	1.16		$	0.74			57	%	$	3.61		$	2.89			25	%
Average<br>Shares Outstanding Assuming Dilution		2,538			2,572						2,541			2,587
Tax<br>Rate ^(3)^		14.1	%		18.7	%					14.9	%		14.5	%
*<br> 100% or greater
---
^(1)^Amounts include the impact of acquisition and divestiture-related costs, restructuring costs and certain other items.<br> See accompanying tables for details.
^(2)^Represents separation and other related costs associated with restructuring activities under the company's formal restructuring<br> programs.
^(3)^The effective income tax rates for the third quarter and the first nine months of 2019 include the unfavorable impact<br> of a charge for the acquisition of Peloton Therapeutics, Inc. for which no tax benefit was recognized and the favorable impact<br> of product mix. The effective income tax rate for the first nine months of 2019 reflects a net tax benefit of $360<br> million related to the settlement of certain federal income tax matters.

MERCK & CO., INC.

GAAPTO NON-GAAP RECONCILIATION

THIRDQUARTER 2020

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table2a

	GAAP											Non-GAAP
Cost<br> of sales	$	3,481		285		38				323		$	3,158
Selling,<br> general and administrative		2,450		207		15				222			2,228
Research<br> and development		3,390		16		19		1,082		1,117			2,273
Restructuring<br> costs		114				114				114			-
Other<br> (income) expense, net		(312	)					(1	)	(1	)		(311	)
Income<br> Before Taxes		3,428		(508	)	(186	)	(1,081	)	(1,775	)		5,203
Income<br> Tax Provision (Benefit)		483		(17	)^(3)^	(25	)^(3)^	(247	)^(3)^	(289	)		772
Net<br> Income		2,945		(491	)	(161	)	(834	)	(1,486	)		4,431
Net<br> Income Attributable to Merck & Co., Inc.		2,941		(491	)	(161	)	(834	)	(1,486	)		4,427
Earnings<br> per Common Share Assuming Dilution	$	1.16		(0.19	)	(0.06	)	(0.33	)	(0.58	)	$	1.74
Tax<br> Rate		14.1	%										14.8	%
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<br> they have on the analysis of underlying business performance and trends. Management believes that providing this information<br> enhances investors’ understanding of the company’s results as it permits investors to understand how management<br> assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance<br> of the company along with other metrics. In addition, senior management’s annual compensation is derived in part using<br> non-GAAP pretax income. This information should be considered in addition to, but not as a substitute for or superior to,<br> information prepared in accordance with GAAP.
^(1)^Amount included in cost of sales primarily reflects expenses for the amortization of intangible assets recognized as<br> a result of business acquisitions. Amount included in selling, general and administrative expenses reflects $182<br> million related to the company's planned spin-off of Organon & Co., and other acquisition and divestiture-related costs.
^(2)^Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed<br> or divested related to activities under the company's formal restructuring programs.
^(3)^Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating<br> territory of the non-GAAP adjustments. Acquisition and divestiture-related costs also includes a tax cost of $67<br> million, representing an adjustment to the tax benefits recorded in conjunction with the 2015 Cubist Pharmaceuticals, Inc.<br> acquisition.
^(4)^Amount included in research and development reflects expenses for upfront payments related to license and collaboration<br> agreements.

MERCK & CO., INC.

GAAPTO NON-GAAP RECONCILIATION

NINEMONTHS ENDED SEPTEMBER 30, 2020

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table2b

	GAAP											Non-GAAP
Cost<br> of sales	$	9,952		863		131				994		$	8,958
Selling,<br> general and administrative		7,383		648		37				685			6,698
Research<br> and development		7,721		(12	)	67		1,082		1,137			6,584
Restructuring<br> costs		269				269				269			-
Other<br> (income) expense, net		(630	)	52				(17	)	35			(665	)
Income<br> Before Taxes		10,784		(1,551	)	(504	)	(1,065	)	(3,120	)		13,904
Income<br> Tax Provision (Benefit)		1,611		(248	)^(3)^	(59	)^(3)^	(242	)^(3)^	(549	)		2,160
Net<br> Income		9,173		(1,303	)	(445	)	(823	)	(2,571	)		11,744
Net<br> Income Attributable to Merck & Co., Inc.		9,161		(1,303	)	(445	)	(823	)	(2,571	)		11,732
Earnings<br> per Common Share Assuming Dilution	$	3.61		(0.51	)	(0.18	)	(0.32	)	(1.01	)	$	4.62
Tax<br> Rate		14.9	%										15.5	%
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<br> they have on the analysis of underlying business performance and trends. Management believes that providing this information<br> enhances investors’ understanding of the company’s results as it permits investors to understand how management<br> assesses performance. Management uses these measures internally for planning and forecasting purposes and to measure the performance<br> of the company along with other metrics. In addition, senior management’s annual compensation is derived in part using<br> non-GAAP pretax income. This information should be considered in addition to, but not as a substitute for or superior to,<br> information prepared in accordance with GAAP.
^(1)^Amount included in cost of sales primarily reflects expenses for the amortization of intangible assets recognized as<br> a result of business acquisitions. Amount included in selling, general and administrative expenses reflects $466<br> million related to the company's planned spin-off of Organon & Co., approximately $95 million of costs related to the<br> acquisition of ArQule, Inc., and other acquisition and divestiture-related costs. Amount included in research and<br> development expenses primarily reflects a reduction in expenses related to a decrease in the estimated fair value measurement<br> of liabilities for contingent consideration. Amount included in other (income) expense, net, primarily reflects<br> an increase in the estimated fair value measurement of liabilities for contingent consideration related to the termination<br> of the Sanofi-Pasteur MSD joint venture, partially offset by royalty income.
^(2)^Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed<br> or divested related to activities under the company's formal restructuring programs.
^(3)^Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating<br> territory of the non-GAAP adjustments. Acquisition and divestiture-related costs also includes a tax cost of $67<br> million, representing an adjustment to the tax benefits recorded in conjunction with the 2015 Cubist Pharmaceuticals, Inc.<br> acquisition.
^(4)^Amount included in research and development reflects expenses for upfront payments related to license and collaboration<br> agreements.

MERCK & CO., INC.

FRANCHISE/ KEY PRODUCT SALES

(AMOUNTSIN MILLIONS)

(UNAUDITED)

Table3

****	2020								2019												3Q				Sep YTD
****	1Q		2Q		3Q		Sep YTD		1Q		2Q		3Q		Sep YTD		4Q		Full Year		Nom %		Ex-Exch %		Nom %		Ex-Exch %
TOTAL<br> SALES ^(1)^	$	12,057	$	10,872	$	12,551	$	35,479	$	10,816	$	11,760	$	12,397	$	34,972	$	11,868	$	46,840		1		2		1		3
PHARMACEUTICAL		10,655		9,679		11,320		31,654		9,663		10,460		11,095		31,218		10,533		41,751		2		2		1		3
Oncology
Keytruda		3,284		3,388		3,715		10,387		2,269		2,634		3,070		7,973		3,111		11,084		21		21		30		31
Alliance<br> Revenue – Lynparza ^(2)^		145		178		196		519		79		111		123		313		132		444		59		58		66		67
Alliance<br> Revenue – Lenvima ^(2)^		128		151		142		421		74		97		109		280		124		404		30		29		50		50
Emend		43		33		39		115		117		121		98		336		53		388		-60		-59		-66		-65
Vaccines<br> ^(3)^
Gardasil<br> / Gardasil 9		1,097		656		1,187		2,941		838		886		1,320		3,044		693		3,737		-10		-10		-3		-2
ProQuad<br> / M-M-R II / Varivax		435		378		576		1,390		496		675		623		1,794		481		2,275		-8		-7		-23		-22
Pneumovax<br> 23		256		117		375		748		185		170		237		592		334		926		58		58		26		27
RotaTeq		222		168		210		601		211		172		180		564		227		791		16		17		7		8
Vaqta		60		28		51		139		47		58		62		167		71		238		-18		-17		-17		-15
Hospital<br> Acute Care
Bridion		299		224		320		843		255		278		284		817		313		1,131		13		13		3		4
Noxafil		94		73		79		247		190		193		177		560		103		662		-55		-55		-56		-55
Prevymis		60		63		77		200		32		38		45		115		50		165		72		69		74		74
Primaxin		51		64		74		189		59		71		77		207		67		273		-4		-4		-9		-7
Invanz		64		43		51		159		72		78		57		206		57		263		-10		-6		-23		-19
Cancidas		55		43		50		148		61		67		62		191		58		249		-20		-19		-22		-20
Cubicin		46		32		39		116		88		67		52		207		50		257		-26		-25		-44		-43
Zerbaxa		37		32		43		112		26		27		35		88		32		121		22		24		27		29
Immunology
Simponi		215		191		209		615		208		214		203		625		205		830		3				-2		-1
Remicade		88		73		82		242		123		98		101		322		89		411		-19		-20		-25		-24
Neuroscience
Belsomra		79		84		81		244		67		76		80		223		83		306		1				9		8
Virology
Isentress<br> / Isentress HD		245		196		205		646		255		247		250		752		223		975		-18		-18		-14		-12
Zepatier		55		39		28		122		114		108		83		304		66		370		-67		-67		-60		-59
Cardiovascular
Zetia		145		137		103		384		140		156		147		443		146		590		-30		-30		-13		-13
Vytorin		53		39		47		139		97		76		57		231		54		285		-17		-16		-40		-38
Atozet		122		115		111		348		94		92		97		283		108		391		14		12		23		25
Alliance<br> Revenue - Adempas ^(4)^		53		79		83		216		42		51		50		144		60		204		67		67		50		50
Adempas<br> ^(5)^		56		57		55		167		48		53		57		158		57		215		-5		-7		6		6
Diabetes<br> ^(6)^
Januvia		774		854		821		2,449		824		908		807		2,539		943		3,482		2		2		-4		-3
Janumet		503		490		506		1,499		530		533		503		1,567		475		2,041				2		-4		-2
Women's<br> Health
Implanon<br> / Nexplanon		195		132		189		515		199		183		199		581		206		787		-5		-4		-11		-10
NuvaRing		63		63		58		184		219		240		241		700		179		879		-76		-76		-74		-73
Diversified<br> Brands
Singulair		155		100		82		338		191		160		152		503		195		698		-46		-46		-33		-32
Cozaar<br> / Hyzaar		102		98		91		292		103		109		116		329		113		442		-21		-20		-11		-9
Arcoxia		70		65		68		204		75		75		72		221		67		288		-5		-2		-8		-5
Nasonex		71		49		41		161		96		72		58		226		67		293		-30		-29		-29		-27
Follistim<br> AQ		41		44		50		136		57		63		62		182		58		241		-18		-18		-26		-25
Other<br> Pharmaceutical ^(7)^		1,194		1,103		1,186		3,478		1,082		1,203		1,149		3,431		1,183		4,615		3		4		1		3
ANIMAL<br> HEALTH		1,214		1,101		1,220		3,535		1,025		1,124		1,122		3,271		1,122		4,393		9		12		8		12
Livestock		739		648		758		2,145		611		671		726		2,007		777		2,784		5		8		7		11
Companion<br> Animals		475		453		462		1,390		414		453		396		1,264		345		1,609		17		18		10		12
Other<br> Revenues ^(8)^		188		92		11		290		128		176		180		483		213		696		-94		-33		-40		-12
Sum<br> 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<br> costs.
^(3)^Total Vaccines sales were $2,155 million, $1,418 million and $2,521 million in the first, second and third quarters<br> of 2020 and $1,887 million, $2,037 million, $2,517 million and $1,928 million in the first, second, third and fourth quarters<br> of 2019, respectively.
^(4)^Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product<br> sales net of cost of sales and commercialization costs.
^(5)^Net product sales in Merck's marketing territories.
^(6)^Total Diabetes sales were $1,353 million, $1,418 million and $1,405 million in the first, second and third quarters<br> of 2020 and $1,402 million, $1,480 million, $1,360 million and $1,472 million in the first, second, third and fourth quarters<br> of 2019, respectively.
^(7)^Includes Pharmaceutical products not individually shown above.
^(8)^Other Revenues are comprised primarily of Healthcare Services segment revenues, third-party manufacturing sales and<br> miscellaneous corporate revenues, including revenue hedging activities.

Exhibit 99.2

MERCK & CO., INC.

CONSOLIDATEDSTATEMENT OF INCOME - GAAP

(AMOUNTSIN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table1a

	2020												2019
		1Q			2Q			3Q			Sep YTD			1Q			2Q			3Q			Sep YTD			4Q			Full Year		3Q		Sep YTD
Sales	$	12,057		$	10,872		$	12,551		$	35,479		$	10,816		$	11,760		$	12,397		$	34,972		$	11,868		$	46,840		1	%	1	%
Costs, Expenses and Other
Cost of sales		3,312			3,159			3,481			9,952			3,052			3,401			3,990			10,443			3,669			14,112		-13	%	-5	%
Selling, general and administrative		2,555			2,378			2,450			7,383			2,425			2,712			2,589			7,726			2,888			10,615		-5	%	-4	%
Research and development		2,209			2,123			3,390			7,721			1,931			2,189			3,204			7,324			2,548			9,872		6	%	5	%
Restructuring costs		72			83			114			269			153			59			232			444			194			638		-51	%	-39	%
Other (income) expense, net		71			(390	)		(312	)		(630	)		188			140			35			362			(223	)		139		*		*
Income Before Taxes		3,838			3,519			3,428			10,784			3,067			3,259			2,347			8,673			2,792			11,464		46	%	24	%
Taxes on Income		619			509			483			1,611			205			615			440			1,259			428			1,687
Net Income		3,219			3,010			2,945			9,173			2,862			2,644			1,907			7,414			2,364			9,777		54	%	24	%
Less: Net Income (Loss) Attributable to Noncontrolling Interests		-			8			4			12			(53	)		(26	)		6			(73	)		7			(66	)
Net Income Attributable to Merck & Co., Inc.	$	3,219		$	3,002		$	2,941		$	9,161		$	2,915		$	2,670		$	1,901		$	7,487		$	2,357		$	9,843		55	%	22	%
Earnings per Common Share Assuming Dilution	$	1.26		$	1.18		$	1.16		$	3.61		$	1.12		$	1.03		$	0.74		$	2.89		$	0.92		$	3.81		57	%	25	%
Average Shares Outstanding Assuming Dilution		2,547			2,536			2,538			2,541			2,603			2,588			2,572			2,587			2,559			2,580
Tax Rate		16.1	%		14.5	%		14.1	%		14.9	%		6.7	%		18.9	%		18.7	%		14.5	%		15.3	%		14.7	%

* 100% or greater

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

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATION

THIRD QUARTER 2019

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2c

	GAAP											Non-GAAP
Cost of sales	$	3,990		941		62				1,003		$	2,987
Selling, general and administrative		2,589		22		1				23			2,566
Research and development		3,204		6		1		982		989			2,215
Restructuring costs		232				232				232			-
Other (income) expense, net		35		6						6			29
Income Before Taxes		2,347		(975	)	(296	)	(982	)	(2,253	)		4,600
Income Tax Provision (Benefit)		440		(231	)^(3)^	(50	)^(3)^	-		(281	)		721
Net Income		1,907		(744	)	(246	)	(982	)	(1,972	)		3,879
Net Income Attributable to Merck & Co., Inc.		1,901		(744	)	(246	)	(982	)	(1,972	)		3,873
Earnings per Common Share Assuming Dilution	$	0.74		(0.29	)	(0.10	)	(0.38	)	(0.77	)	$	1.51
Tax Rate		18.7	%										15.7	%

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 this information enhances investors’ understanding of the company’s results as it permits investors to understand how management assesses performance. Management uses these 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 non-GAAP pretax income. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.

^(1)^Amount included in cost of sales primarily reflects $320 million of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $612 million of intangible asset impairment charges related to SIVEXTRO. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures.

^(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 impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

^(4)^ Amount included in research and development represents the charge related to the acquisition of Peloton Therapeutics, Inc.

MERCK & CO., INC.

GAAP TO NON-GAAP RECONCILIATION

NINE MONTHS ENDED SEPTEMBER 30, 2019

(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)

(UNAUDITED)

Table 2d

	GAAP											Non-GAAP
Cost of sales	$	10,443		1,801		161				1,962		$	8,481
Selling, general and administrative		7,726		82		33				115			7,611
Research and development		7,324		(21	)	4		982		965			6,359
Restructuring costs		444				444				444			-
Other (income) expense, net		362		321				48		369			(7	)
Income Before Taxes		8,673		(2,183	)	(642	)	(1,030	)	(3,855	)		12,528
Income Tax Provision (Benefit)		1,259		(438	)^(3)^	(106	)^(3)^	(304	)^(5)^	(848	)		2,107
Net Income		7,414		(1,745	)	(536	)	(726	)	(3,007	)		10,421
Less: Net (Loss) Income Attributable to Noncontrolling Interests		(73	)	(89	)					(89	)		16
Net Income Attributable to Merck & Co., Inc.		7,487		(1,656	)	(536	)	(726	)	(2,918	)		10,405
Earnings per Common Share Assuming Dilution	$	2.89		(0.64	)	(0.21	)	(0.28	)	(1.13	)	$	4.02
Tax Rate		14.5	%										16.8	%

Only the line items that are affected by non-GAAP adjustments are shown.

^(1)^Amount included in cost of sales primarily reflects $1.1 billion of expenses for the amortization of intangible assets recognized as a result of business acquisitions, as well as $693 million of intangible asset impairment charges, including $612 million related to SIVEXTRO. Amount included in selling, general and administrative expenses primarily reflects integration, transaction and certain other costs related to business acquisitions and divestitures, including costs related to the acquisition of Antelliq Corporation. Amount included in research and development expenses primarily reflects a reduction in expenses related to a decrease in the estimated fair value measurement of liabilities for contingent consideration. Amount included in other (income) expense, net primarily reflects goodwill and intangible asset impairment charges related to certain businesses in the Healthcare Services segment and expenses related to an increase in the estimated fair value measurement of liabilities for contingent consideration, partially offset by royalty income related to the termination of the Sanofi-Pasteur MSD joint venture.

^(3)^ Represents the estimated tax impact on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.

^(4)^ Amount included in research and development represents the charge related to the acquisition of Peloton Therapeutics, Inc.

^(5)^ Primarily reflects a $360 million net tax benefit related to the settlement of certain federal income tax matters and a $67 million tax charge related to the finalization of treasury regulations associated with the 2017 enactment of U.S. tax legislation.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

THIRD QUARTER 2020

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3a

	Global						U.S.								International
	3Q 2020		3Q 2019		% Change		3Q 2020			3Q 2019			% Change		3Q 2020		3Q 2019		% Change
TOTAL<br> SALES ^(1)^	$	12,551	$	12,397		1	$	5,625		$	5,573			1	$	6,926	$	6,824		1
PHARMACEUTICAL		11,320		11,095		2		5,218			5,180			1		6,102		5,914		3
Oncology
Keytruda		3,715		3,070		21		2,157			1,743			24		1,559		1,327		17
Alliance<br> Revenue - Lynparza ^(2)^		196		123		59		107			71			52		89		53		70
Alliance<br> Revenue - Lenvima ^(2)^		142		109		30		82			65			26		60		44		36
Emend		39		98		-60		8			42			-82		31		56		-44
Vaccines<br> ^(3)^
Gardasil<br> / Gardasil 9		1,187		1,320		-10		579			761			-24		608		558		9
ProQuad<br> / M-M-R II / Varivax		576		623		-8		437			482			-9		139		141		-2
Pneumovax<br> 23		375		237		58		276			179			54		99		58		72
RotaTeq		210		180		16		114			102			11		96		78		23
Vaqta		51		62		-18		32			36			-11		19		26		-26
Hospital<br> Acute Care
Bridion		320		284		13		162			133			22		157		151		4
Noxafil		79		177		-55		13			77			-83		66		100		-34
Prevymis		77		45		72		32			22			42		46		23		101
Primaxin		74		77		-4		1			2			-34		73		75		-3
Invanz		51		57		-10		1			(1	)		*		50		58		-14
Cancidas		50		62		-20		1			0			80		49		62		-21
Zerbaxa		43		35		22		20			20			4		23		15		47
Cubicin		39		52		-26		11			14			-22		28		38		-28
Immunology
Simponi		209		203		3										209		203		3
Remicade		82		101		-19										82		101		-19
Neuroscience
Belsomra		81		80		1		18			23			-24		63		57		11
Virology
Isentress<br> / Isentress HD		205		250		-18		92			102			-10		113		149		-24
Zepatier		28		83		-67		6			24			-76		22		59		-63
Cardiovascular
Zetia		103		147		-30		(1	)		5			-115		103		142		-27
Vytorin		47		57		-17		3			5			-34		44		52		-16
Atozet		111		97		14										111		97		14
Alliance<br> Revenue - Adempas ^(4)^		83		50		67		78			48			64		5		2		117
Adempas<br> ^(5)^		55		57		-5										55		57		-5
Diabetes<br> ^(6)^
Januvia		821		807		2		342			367			-7		479		440		9
Janumet		506		503				105			129			-18		400		375		7
Women's<br> Health
Implanon<br> / Nexplanon		189		199		-5		137			136			1		52		62		-17
NuvaRing		58		241		-76		24			202			-88		34		39		-13
Diversified<br> Brands
Cozaar<br> / Hyzaar		91		116		-21		5			6			-7		86		110		-22
Singulair		82		152		-46		4			11			-61		78		140		-44
Arcoxia		68		72		-5										68		72		-5
Follistim<br> AQ		50		62		-18		20			27			-28		31		35		-11
Nasonex		41		58		-30					4			-110		41		55		-24
Other<br> Pharmaceutical ^(7)^		1,186		1,149		3		352			343			3		834		804		4
ANIMAL<br> HEALTH		1,220		1,122		9		398			337			18		822		785		5
Livestock		758		726		5		164			144			14		594		582		2
Companion<br> Animals		462		396		17		234			193			22		228		203		12
Other<br> Revenues ^(8)^		11		180		-94		9			56			-85		2		125		-99

* 200% or greater

Sum of 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 costs.

^(3)^Total Vaccines sales were $2,521 million and $2,517 million on a global basis in the third quarter of 2020 and 2019, respectively.

^(4)^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.

^(5)^Net product sales in Merck's marketing territories.

^(6)^Total Diabetes sales were $1,405 million and $1,360 million on a global basis in the third quarter of 2020 and 2019, respectively.

^(7)^Includes Pharmaceutical products not individually shown above.

^(8)^Other Revenues are comprised primarily of Healthcare Services segment revenue, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

MERCK & CO., INC.

FRANCHISE / KEY PRODUCT SALES

SEPTEMBER YEAR-TO-DATE 2020

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3b

	Global						U.S.							International
	Sep<br> YTD 2020		Sep<br> YTD 2019		%<br> Change		Sep<br> YTD 2020			Sep<br> YTD 2019		%<br> Change		Sep<br> YTD 2020		Sep<br> YTD 2019		%<br> Change
TOTAL<br> SALES ^(1)^	$	35,479	$	34,972		1	$	15,396		$	15,320			$	20,084	$	19,652		2
PHARMACEUTICAL		31,654		31,218		1		14,202			14,202				17,452		17,016		3
Oncology
Keytruda		10,387		7,973		30		6,106			4,525		35		4,281		3,448		24
Alliance<br> Revenue - Lynparza ^(2)^		519		313		66		297			186		59		223		126		76
Alliance<br> Revenue - Lenvima ^(2)^		421		280		50		270			169		60		152		112		36
Emend		115		336		-66		18			173		-89		96		163		-41
Vaccines<br> ^(3)^
Gardasil<br> / Gardasil 9		2,941		3,044		-3		1,209			1,579		-23		1,732		1,464		18
ProQuad<br> / M-M-R II / Varivax		1,390		1,794		-23		1,033			1,325		-22		356		469		-24
Pneumovax<br> 23		748		592		26		478			428		12		270		164		64
RotaTeq		601		564		7		355			360		-2		246		203		21
Vaqta		139		167		-17		79			103		-23		60		65		-7
Hospital<br> Acute Care
Bridion		843		817		3		412			381		8		431		437		-1
Noxafil		247		560		-56		27			268		-90		220		291		-25
Prevymis		200		115		74		87			60		45		113		55		106
Primaxin		189		207		-9		2			2				187		204		-9
Invanz		159		206		-23		7			30		-77		152		176		-14
Cancidas		148		191		-22		2			5		-63		147		187		-21
Cubicin		116		207		-44		36			78		-54		80		129		-37
Zerbaxa		112		88		27		57			45		27		54		43		26
Immunology
Simponi		615		625		-2									615		625		-2
Remicade		242		322		-25									242		322		-25
Neuroscience
Belsomra		244		223		9		67			68		-2		177		155		14
Virology
Isentress<br> / Isentress HD		646		752		-14		243			304		-20		403		449		-10
Zepatier		122		304		-60		38			96		-60		83		208		-60
Cardiovascular
Zetia		384		443		-13		(4	)		11		-140		389		432		-10
Vytorin		139		231		-40		9			11		-23		130		219		-41
Atozet		348		283		23									348		283		23
Alliance<br> Revenue - Adempas ^(4)^		216		144		50		200			137		46		16		7		130
Adempas<br> ^(5)^		167		158		6									167		158		6
Diabetes<br> ^(6)^
Januvia		2,449		2,539		-4		1,110			1,223		-9		1,339		1,317		2
Janumet		1,499		1,567		-4		361			462		-22		1,138		1,105		3
Women's<br> Health
Implanon<br> / Nexplanon		515		581		-11		374			421		-11		142		160		-12
NuvaRing		184		700		-74		85			593		-86		98		107		-8
Diversified<br> Brands
Singulair		338		503		-33		14			24		-44		324		479		-32
Cozaar<br> / Hyzaar		292		329		-11		17			16		6		275		313		-12
Arcoxia		204		221		-8									204		221		-8
Nasonex		161		226		-29		9			2		*		152		224		-32
Follistim<br> AQ		136		182		-26		60			80		-26		76		102		-26
Other<br> Pharmaceutical ^(7)^		3,478		3,431		1		1,144			1,037		10		2,334		2,394		-3
ANIMAL<br> HEALTH		3,535		3,271		8		1,124			966		16		2,411		2,305		5
Livestock		2,145		2,007		7		448			406		10		1,697		1,601		6
Companion<br> Animals		1,390		1,264		10		676			560		21		714		704		2
Other<br> Revenues ^(8)^		290		483		-40		70			152		-54		221		331		-33

* 200% or greater

Sum of 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 costs.

^(3)^Total Vaccines sales were $6,094 million and $6,441 million on a global basis for September YTD 2020 and 2019, respectively.

^(4)^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.

^(5)^Net product sales in Merck's marketing territories.

^(6)^Total Diabetes sales were $4,177 million and $4,242 million on a global basis for September YTD 2020 and 2019, respectively.

^(7)^Includes Pharmaceutical products not individually shown above.

^(8)^Other Revenues are comprised primarily of Healthcare Services segment revenues, third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.

MERCK & CO., INC.

PHARMACEUTICAL GEOGRAPHIC SALES

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 3c

	2020												2019																		%<br> Change
	1Q			2Q			3Q			Sep<br> YTD			1Q			2Q			3Q			Sep<br> YTD			4Q			Full<br> Year			3Q
TOTAL<br> PHARMACEUTICAL	$	10,655		$	9,679		$	11,320		$	31,654		$	9,663		$	10,460		$	11,095		$	31,218		$	10,533		$	41,751			2
United States ^(1)^		4,714			4,270			5,218			14,202			4,215			4,807			5,180			14,202			4,751			18,953			1
%<br> Pharmaceutical Sales		44.2	%		44.1	%		46.1	%		44.9	%		43.6	%		46.0	%		46.7	%		45.5	%		45.1	%		45.4	%
Europe ^(2)^		2,543			2,196			2,549			7,288			2,335			2,301			2,304			6,941			2,373			9,314			11
%<br> Pharmaceutical Sales		23.9	%		22.7	%		22.5	%		23.0	%		24.2	%		22.0	%		20.8	%		22.2	%		22.5	%		22.3	%
China		846			811			990			2,646			725			745			898			2,368			773			3,141			10
%<br> Pharmaceutical Sales		7.9	%		8.4	%		8.7	%		8.4	%		7.5	%		7.1	%		8.1	%		7.6	%		7.3	%		7.5	%
Japan		789			847			805			2,441			779			900			894			2,573			921			3,494			-10
%<br> Pharmaceutical Sales		7.4	%		8.8	%		7.1	%		7.7	%		8.1	%		8.6	%		8.1	%		8.2	%		8.7	%		8.4	%
Asia Pacific (other<br> than China and Japan)		613			555			601			1,769			642			606			638			1,886			614			2,500			-6
%<br> Pharmaceutical Sales		5.8	%		5.7	%		5.3	%		5.6	%		6.6	%		5.8	%		5.8	%		6.0	%		5.8	%		6.0	%
Eastern Europe/Middle<br> East/Africa		490			416			419			1,325			343			388			423			1,154			423			1,577			-1
%<br> Pharmaceutical Sales		4.6	%		4.3	%		3.7	%		4.2	%		3.6	%		3.7	%		3.8	%		3.7	%		4.0	%		3.8	%
Latin America		419			399			477			1,294			427			523			534			1,484			429			1,914			-11
%<br> Pharmaceutical Sales		3.9	%		4.1	%		4.2	%		4.1	%		4.4	%		5.0	%		4.8	%		4.8	%		4.1	%		4.6	%
Canada		212			160			216			589			177			179			211			568			216			783			2
%<br> Pharmaceutical Sales		2.0	%		1.7	%		1.9	%		1.9	%		1.8	%		1.7	%		1.9	%		1.8	%		2.0	%		1.9	%
Other ^(1)^		29			25			45			100			20			11			13			42			33			75			246
%<br> Pharmaceutical Sales		0.3	%		0.3	%		0.4	%		0.3	%		0.2	%		0.1	%		0.1	%		0.1	%		0.3	%		0.2	%

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

^(1)^Alliance revenue related to Adempas attributable to the United States has been reclassified from Other.

^(2)^Europe primarily represents all European Union countries and the European Union accession markets.

MERCK & CO., INC.

OTHER (INCOME) EXPENSE, NET - GAAP

(AMOUNTS IN MILLIONS)

(UNAUDITED)

Table 4

OTHER (INCOME) EXPENSE, NET

	3Q20			3Q19			Sep YTD 2020			Sep YTD 2019
Interest income	$	(9	)	$	(61	)	$	(48	)	$	(225	)
Interest expense		203			231			624			674
Exchange losses		10			38			89			166
Income from investments in equity securities, net ^(1)^		(360	)		(16	)		(964	)		(50	)
Net periodic defined benefit plan (credit) cost other than service cost		(88	)		(128	)		(259	)		(409	)
Other, net		(68	)		(29	)		(72	)		206
Total	$	(312	)	$	35		$	(630	)	$	362

^(1)^Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds. Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while ownership interests in investment funds are accounted for on a one quarter lag.