On October 31, 2024 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the third quarter of 2024 and provided a business update (Press release, Regeneron, OCT 31, 2024, View Source [SID1234647608]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Regeneron had a strong third quarter marked by 11% revenue growth. We continued to deepen the impact of our commercialized medicines this quarter, with ongoing leadership for our retinal franchise, expanded global reach of Libtayo, and notable growth from Dupixent," said Leonard S. Schleifer, M.D., Ph.D., Board co-Chair, President and Chief Executive Officer of Regeneron. "Over one million patients around the globe are currently being treated with Dupixent, with more to come following the approvals for COPD in the U.S., Europe and China. Our remarkably diverse clinical portfolio now includes approximately 40 product candidates and many pivotal studies underway. We continue to invest in the world-class research and development engine that drives our scientific and clinical productivity, with data expected over the next twelve months in diseases as varied as non-small cell lung cancer, thrombosis, retinal vein occlusion, severe allergy, COPD, melanoma, and obesity."

Financial Highlights

($ in millions, except per share data) Q3 2024 Q3 2023 % Change
Total revenues $ 3,721 $ 3,363 11 %
GAAP net income $ 1,341 $ 1,008 33 %
GAAP net income per share – diluted $ 11.54 $ 8.89 30 %
Non-GAAP net income(a) $ 1,462 $ 1,329 10 %
Non-GAAP net income per share – diluted(a) $ 12.46 $ 11.59 8 %

"Our strong third quarter financial performance was highlighted by double-digit revenue growth and continued investment in our growing pipeline," said Christopher Fenimore, Senior Vice President, Finance and Chief Financial Officer of Regeneron. "We remain focused on translating cutting-edge science into differentiated medicines that have the greatest potential to serve patients, while deploying capital with the goal of maximizing shareholder returns, primarily through investing in innovation coupled with opportunistic share repurchases."

Business Highlights

Key Pipeline Progress
Regeneron has approximately 40 product candidates in clinical development, including a number of marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:

EYLEA HD (aflibercept) 8 mg

The Company announced positive three-year (156-week) data from an extension study of the Phase 3 PHOTON trial in patients with diabetic macular edema (DME). At three years, the longer-term data showed the vast majority of EYLEA HD patients who entered the extension study sustained the visual gains and anatomic improvements achieved by the end of the second year. Of the EYLEA HD patients who completed the full 156 weeks of treatment, 48% were assigned a dosing interval of ≥20 weeks at the end of the third year. The results were presented at the American Academy of Ophthalmology (AAO) Annual Meeting.
Dupixent (dupilumab)

In September 2024, the U.S. Food and Drug Administration (FDA) approved Dupixent as an add-on maintenance treatment for adults with inadequately controlled COPD and an eosinophilic phenotype. With this approval, Dupixent is the first biologic medicine approved in the United States, European Union (EU), and China to treat these patients.
In September 2024, the FDA approved Dupixent as an add-on maintenance treatment for adolescents aged 12 to 17 years with inadequately controlled chronic rhinosinusitis with nasal polyposis (CRSwNP).
The European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending expanded approval of Dupixent in the EU to treat children aged 1 to 11 years with eosinophilic esophagitis (EoE). The European Commission (EC) is expected to announce a final decision in the coming months.
The Company and Sanofi announced that a confirmatory Phase 3 trial met the primary and key secondary endpoints for the investigational treatment of patients with uncontrolled, biologic-naïve CSU receiving background therapy with antihistamines, showing treatment with Dupixent resulted in a nearly 50% reduction in itch and urticaria activity scores from baseline. This positive trial confirms results from the first Phase 3 trial of Dupixent in this setting and these data supported the recent resubmission of a supplemental Biologics License Application (sBLA) to the FDA.
The Company and Sanofi announced that a Phase 3 trial in bullous pemphigoid met the primary and all key secondary endpoints evaluating the investigational use in adults with moderate-to-severe disease. In the trial, five times more Dupixent patients achieved sustained disease remission compared to those on placebo. This trial will support global regulatory submissions, including the anticipated fourth quarter 2024 submission in the United States.
Oncology Programs

In August 2024, the EC approved Ordspono (odronextamab) to treat adult patients with relapsed or refractory (R/R) follicular lymphoma (FL) or R/R diffuse large B-cell lymphoma (DLBCL), after two or more lines of systemic therapy.
The Company announced five-year results from the final pre-specified overall survival (OS) analysis of a Phase 3 trial, which evaluated Libtayo (cemiplimab) monotherapy versus chemotherapy as a first-line treatment for certain adults with advanced non-small cell lung cancer (NSCLC) with ≥50% PD-L1 expression. The results were presented at the IASLC 2024 World Conference on Lung Cancer.
The Company submitted a regulatory application in Japan for Libtayo for first-line advanced NSCLC (monotherapy and chemotherapy combination).
A Phase 2 study for Libtayo in neoadjuvant NSCLC was initiated.
The Company presented new, two-year results at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Annual Meeting, evaluating the investigational combination of fianlimab, an antibody to LAG-3, and Libtayo in adults with advanced melanoma across three independent expansion cohorts of a first-in-human, multi-cohort trial. These longer-term results show high clinical activity, including deepening responses, per a blinded independent central review.
In August 2024, the FDA issued a Complete Response Letter (CRL) for the BLA for linvoseltamab, a bispecific antibody targeting BCMA and CD3, in R/R multiple myeloma that has progressed after at least three prior therapies. The sole approvability issue identified is related to findings from a pre-approval inspection at a third-party fill/finish manufacturer. Resolution of this issue will be required for both FDA and EC regulatory approvals.
Other Programs

A Phase 3 study was initiated for pozelimab, an antibody to C5, in combination with cemdisiran, an siRNA therapy, in geographic atrophy.
A Phase 2 study for REGN7999, an antibody to TMPRSS6, for the treatment of iron overload in patients with beta-thalassemia was initiated.
Third Quarter 2024 Financial Results

Revenues

($ in millions) Q3 2024 Q3 2023 % Change
Net product sales:
EYLEA HD – U.S. $ 392 $ 43 *
EYLEA – U.S. 1,145 1,448 (21 %)
Total EYLEA HD and EYLEA – U.S. 1,537 1,491 3 %
Libtayo – Global 289 232 25 %
Praluent – U.S. 53 40 33 %
Evkeeza – U.S. 32 19 68 %
Inmazeb – Global 35 4 *
Total net product sales 1,946 1,786 9 %

Collaboration revenue:
Sanofi 1,263 1,065 19 %
Bayer 391 377 4 %
Other 6 (3 ) *
Other revenue 114 138 (17 %)
Total revenues $ 3,720 $ 3,363 11 %

* Percentage not meaningful

Total EYLEA HD and EYLEA net product sales in the U.S. increased 3% in the third quarter of 2024 compared to the third quarter of 2023. EYLEA HD was approved by the FDA in August 2023 and net product sales in the third quarter of 2024 were driven by the transition of patients from other anti-VEGF products, including EYLEA, as well as new patients naïve to anti-VEGF therapy. Net product sales of EYLEA in the third quarter of 2024 were adversely impacted by a lower net selling price compared to the third quarter of 2023. In addition, third quarter 2024 total EYLEA HD and EYLEA net product sales were favorably impacted by approximately $40 million as a result of higher wholesaler inventory levels for EYLEA HD at the end of the third quarter of 2024 compared to the end of the second quarter of 2024, partially offset by lower wholesaler inventory levels for EYLEA.

Sanofi collaboration revenue increased in the third quarter of 2024, compared to the third quarter of 2023, due to an increase in the Company’s share of profits from commercialization of antibodies, which were $1.09 billion in the third quarter of 2024, compared to $863 million in the third quarter of 2023. The change in the Company’s share of profits from commercialization of antibodies was driven by higher profits associated with an increase in Dupixent sales. Sanofi collaboration revenue in the third quarter of 2023 was positively impacted by the recognition of the final $50 million sales-based milestone.

Refer to Table 4 for a summary of collaboration revenue.

Operating Expenses

GAAP %
Change
Non-GAAP(a) %
Change
($ in millions) Q3 2024 Q3 2023 Q3 2024 Q3 2023
Research and development (R&D) $ 1,272 $ 1,075 18 % $ 1,146 $ 954 20 %
Acquired in-process research and development (IPR&D) $ 56 $ 100 (44 %) * * n/a
Selling, general, and administrative (SG&A) $ 714 $ 641 11 % $ 613 $ 534 15 %
Cost of goods sold (COGS) $ 262 $ 225 16 % $ 217 $ 181 20 %
Cost of collaboration and contract manufacturing (COCM) $ 229 $ 212 8 % * * n/a
Other operating expense (income), net $ 8 $ (1 ) ** $ — * **

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded.
** Percentage not meaningful
GAAP and non-GAAP R&D expenses increased in the third quarter of 2024, compared to the third quarter of 2023, driven by the advancement of the Company’s clinical pipeline, including late-stage oncology programs, and higher headcount and headcount-related costs.
Acquired IPR&D for the third quarter of 2024 included a $45 million development milestone in connection with the Company’s collaboration agreement with Sonoma Biotherapeutics, Inc. Acquired IPR&D expense in the third quarter of 2023 related to a $100 million development milestone in connection with the Company’s collaboration with Alnylam Pharmaceuticals, Inc.
GAAP and non-GAAP SG&A expenses increased in the third quarter of 2024, compared to the third quarter of 2023, due to higher commercialization-related expenses to support the Company’s launch of EYLEA HD and higher headcount and headcount-related costs partly related to the Company’s international commercial expansion.
GAAP and non-GAAP COGS increased in the third quarter of 2024, compared to the third quarter of 2023, primarily due to higher start-up costs for the Company’s Rensselaer, New York fill/finish facility.
Other Financial Information

GAAP other income (expense) included the recognition of net unrealized gains on equity securities of $135 million in the third quarter of 2024, compared to $100 million of net unrealized losses in the third quarter of 2023. GAAP and Non-GAAP other income (expense) also included interest income of $187 million in the third quarter of 2024, compared to $134 million in the third quarter of 2023.

In the third quarter of 2024, the Company’s GAAP effective tax rate (ETR) was 10.2%, compared to 9.3% in the third quarter of 2023. The GAAP ETR increased in the third quarter of 2024, compared to the third quarter of 2023, due to a lower benefit from income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate. In the third quarter of 2024, the non-GAAP ETR was 10.7%, compared to 11.9% in the third quarter of 2023.

GAAP net income per diluted share was $11.54 in the third quarter of 2024, compared to $8.89 in the third quarter of 2023. Non-GAAP net income per diluted share was $12.46 in the third quarter of 2024, compared to $11.59 in the third quarter of 2023. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

During the third quarter of 2024, the Company repurchased shares of its common stock and recorded the cost of the shares, or $738 million, as Treasury Stock. As of September 30, 2024, $2.9 billion remained available for share repurchases under the Company’s share repurchase program.

2024 Financial Guidance(c)

The Company’s full year 2024 financial guidance consists of the following components:

2024 Guidance
Prior Updated
GAAP R&D $5.020–$5.170 billion $5.055–$5.145 billion
Non-GAAP R&D(a) $4.500–$4.600 billion $4.525–$4.575 billion
GAAP SG&A $2.920–$3.060 billion $2.930–$3.020 billion
Non-GAAP SG&A(a) $2.550–$2.650 billion $2.550–$2.600 billion
GAAP gross margin on net product sales(d) Approximately 86% Unchanged
Non-GAAP gross margin on net product sales(a)(d) Approximately 89% Unchanged
COCM(e)* $850–$910 million $860–$900 million
Capital expenditures* $750–$820 million $700–$740 million
GAAP effective tax rate 8%–9% Unchanged
Non-GAAP effective tax rate(a) 10%–11% Unchanged

* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded.

A reconciliation of full year 2024 GAAP to non-GAAP financial guidance is included below:

Projected Range
($ in millions) Low High
GAAP R&D $ 5,055 $ 5,145
Stock-based compensation expense 520 540
Acquisition and integration costs 10 30
Non-GAAP R&D $ 4,525 $ 4,575

GAAP SG&A $ 2,930 $ 3,020
Stock-based compensation expense 340 360
Acquisition, integration, and other costs 40 60
Non-GAAP SG&A $ 2,550 $ 2,600

GAAP gross margin on net product sales Approximately 86% Approximately 86%
Stock-based compensation expense 1 % 1 %
Intangible asset amortization expense 1 % 1 %
Acquisition and integration costs <1% <1%
Non-GAAP gross margin on net product sales Approximately 89% Approximately 89%

GAAP ETR 8 % 9 %
Income tax effect of GAAP to non-GAAP reconciling items 2 % 2 %
Non-GAAP ETR 10 % 11 %

(a) This press release uses non-GAAP R&D, non-GAAP SG&A, non-GAAP COGS, non-GAAP gross margin on net product sales, non-GAAP other operating (income) expense, net, non-GAAP other income (expense), net, non-GAAP ETR, non-GAAP net income, non-GAAP net income per share, total revenues excluding Ronapreve(b), and free cash flow, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures are computed by excluding certain non-cash and/or other items from the related GAAP financial measure. The Company also includes a non-GAAP adjustment for the estimated income tax effect of reconciling items. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.

The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate from period to period based on factors that are not within the Company’s control (such as the Company’s stock price on the dates share-based grants are issued or changes in the fair value of the Company’s investments in equity securities) or items that are not associated with normal, recurring operations (such as acquisition and integration costs). Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. With respect to free cash flows, the Company believes that this non-GAAP measure provides a further measure of the Company’s ability to generate cash flows from its operations. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company’s core business operations. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company’s non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by the Company should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP.

(b) The casirivimab and imdevimab antibody cocktail for COVID-19 is known as REGEN-COV in the United States and Ronapreve in other countries. Roche records net product sales of Ronapreve outside the United States.

(c) The Company’s 2024 financial guidance does not assume the completion of any business development transactions not completed as of the date of this press release.

(d) Gross margin on net product sales represents gross profit expressed as a percentage of total net product sales recorded by the Company. Gross profit is calculated as net product sales less cost of goods sold.

(e) Corresponding reimbursements from collaborators and others for manufacturing of commercial supplies is recorded within revenues.

Conference Call Information

Regeneron will host a conference call and simultaneous webcast to discuss its third quarter 2024 financial and operating results on Thursday, October 31, 2024, at 8:30 AM Eastern Time. Participants may access the conference call live via webcast, or register in advance and participate via telephone, on the "Investors and Media" page of Regeneron’s website at www.regeneron.com. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. A replay of the conference call and webcast will be archived on the Company’s website for at least 30 days.

On October 31, 2024 NANOBIOTIX (Euronext: NANO –– NASDAQ: NBTX – the ‘‘Company’’), a late-clinical stage biotechnology company pioneering nanoparticle-based approaches to expand treatment possibilities for patients with cancer and other major diseases, reported that Company management will participate in fireside chats at following conferences (Press release, Nanobiotix, OCT 31, 2024, View Source [SID1234647607]):

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Guggenheim’s Inaugural Healthcare Innovation Conference
Date: Monday, November 11, 2024
Time: 4pm ET / 10pm CET
Location: Boston, MA
Presenters: Laurent Levy, Chief Executive Officer of Nanobiotix and Bart van Rhijn, Chief Financial & Business Officer of Nanobiotix
Webcast link: Click here

Stifel Healthcare Conference
Date: Monday, November 18, 2024
Time: 4:45pm ET / 10:45pm CET
Location: New York, NY
Presenter: Bart van Rhijn, Chief Financial & Business Officer of Nanobiotix
Webcast link: Click here

Jefferies London Healthcare Conference
Date: Wednesday, November 20, 2024
Time: 1pm GMT / 8am ET / 2pm CET
Location: London, UK
Presenters: Laurent Levy, Chief Executive Officer of Nanobiotix and Bart van Rhijn, Chief Financial & Business Officer of Nanobiotix
Webcast link: Click here

The fireside chats will be webcast live from the events page of the Investors section of the Company’s website. Replay of the webcast will be available following the event.

On October 31, 2024 Molecular Partners AG (SIX: MOLN; NASDAQ: MOLN), a clinical-stage biotech company developing a new class of custom-built protein drugs known as DARPin therapeutics ("Molecular Partners" or the "Company"), reported corporate highlights and unaudited financial results for the third quarter of 2024 (Press release, Molecular Partners, OCT 31, 2024, View Source [SID1234647606]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"In the last quarter we continued to execute our plan to bring our first Radio-DARPin program to IND submission, and into the clinics. DLL3 remains a highly interesting target that is gaining significant attention. Our team presented additional preclinical data showing that MP0712 is safe and efficacious in a highly relevant tumor model, with DLL3 expression levels matching those in human tumors," said Patrick Amstutz, Ph.D., Molecular Partners’ Chief Executive Officer. "In addition, we strengthened our relationship with our partner Orano Med, ensuring that both parties will have the opportunity to bring two Radio-DARPin products to market, for a total of four. Lastly our recent capital raise allows us additional financial flexibility into 2027 with participation from new, specialized investors and supportive existing investors."

Financial and Business Outlook
For the full year 2024, at constant exchange rates, the Company reiterates its guidance for total expenses of CHF 65–70 million. Approximately CHF 7 million of this will be non-cash effective costs for share-based payments, pension accounting and depreciation. This guidance does not include any potential receipts from R&D collaborators.
With CHF 143.6 million in cash and short-term time deposits and no debt as of September 30, 2024, the Company expects to be funded into 2027, excluding any potential receipts from R&D collaborators.
On October 25, 2024, Molecular Partners announced the pricing of an underwritten offering in the US of 3’642’988 American Depositary Shares (ADSs) representing 3’642’988 ordinary shares at an offering price of USD 5.49 per ADS. The total gross proceeds amount to approximately USD 20 million. The offering included participation from a new investor HBM Healthcare Investments Ltd, which is a leading healthcare investor, as well as multiple existing investors. Leerink Partners and TD Cowen acted as joint bookrunning managers for the offering. LifeSci Capital acted as lead manager for the offering, and Zürcher Kantonalbank (ZKB) served as settlement agent. Molecular Partners currently intends to use the net proceeds from this offering, together with its existing cash and cash equivalents, for development and expansion of its radiopharmaceutical pipeline and platform (Radio-DARPin Therapeutics) and for working capital and other general corporate purposes. Subsequent to the offering, the Company has (proforma) cash and short-term time deposits in the amount of CHF 158 million, with 40,363,095 issued shares.

Research & Development Highlights

MP0712 and Radio-DARPin Therapy (RDT): Preparing for IND submission and clinical entry in 2025
Molecular Partners has leveraged the intrinsic properties of DARPins, such as small size, high affinity and specificity, to engineer Radio-DARPins as ideal vector candidates for radiopharmaceutical therapeutics and to create a Radio-DARPin Therapy (RDT) platform amenable to a broad range of tumor targets. Historically, small protein-based vectors faced challenges with kidney accumulation and toxicity, as well as suboptimal tumor uptake. Molecular Partners’ RDT platform addresses these limitations with its half-life extension technologies and surface engineering approaches, while preserving the advantages of the small protein format.

MP0712 is a 212Pb-based Radio-DARPin Therapeutic (RDT) candidate targeting the tumor-associated protein delta-like ligand 3 (DLL3). MP0712 is being co-developed with Orano Med, a clinical stage pioneer of targeted alpha therapies using the lead isotope 212Pb. Molecular Partners and Orano Med anticipate initiating first-in-human studies in 2025, pending regulatory clearance. Initial clinical data of MP0712 is also anticipated in 2025.

In October 2024, Molecular Partners presented new in vivo data at the EANM Congress. MP0712 demonstrated high affinity and specificity for DLL3 and a favorable safety profile. DLL3 is a highly relevant target for radiopharmaceutical therapy due to its abundant expression in tumors of patients with small cell lung cancer (present in >85% of tumors) and other aggressive neuroendocrine tumors, while expression in healthy tissues is low. MP0712 led to attractive tumor to kidney (T:K) ratios of >2 in biodistribution studies across several models, and to strong and dose-dependent efficacy in mice bearing established tumors with clinically-relevant levels of DLL3 expression and at a clinically-relevant dose.
On October 22, 2024, Molecular Partners and Orano Med signed a revised and strengthened agreement to co-develop 212Pb-based Radio-DARPin Therapeutics. This revision builds on the original agreement signed in January 2024. Under the revised agreement, both companies will co-develop four Radio-DARPin programs; each company will have the right to commercialize two programs (previously one each). Molecular Partners will hold commercialization rights to the second nominated Radio-DARPin candidate, in addition to rights to the first program MP0712.

In addition to the updates above, Molecular Partners continued to progress its RDT portfolio with projects through a partnership with Novartis, and is evaluating additional targets for RDT programs. An update on the broader RDT portfolio is expected to be shared in the first half of 2025.

MP0533 (multispecific T cell engager)

MP0533, a novel tetra-specific T cell-engaging DARPin, is currently being evaluated in a Phase 1/2a clinical trial for patients with relapsed/refractory acute myeloid leukemia (r/r AML) and myelodysplastic syndrome/AML (MDS/AML) (ClinicalTrials.gov: NCT05673057). The trial is currently enrolling patients in Cohort 8. MP0533’s mode of action is designed to preferentially kill AML cells (blasts, leukemic progenitor and stem cells) that express any combination of the three cell surface antigens CD33, CD123, and CD70, while sparing healthy cells, which tend to express only one or none of these targets. The immune activation against the malignant cells is achieved through CD3-mediated T-cell engagement.

As shared in August 2024, MP0533 showed an acceptable tolerability profile with the majority of adverse events reported being infusion-related reactions and cytokine release syndrome. Based on this observed tolerability profile and initial antitumor activity data, and following discussion with treating physicians and key opinion leaders, Molecular Partners is amending the protocol to further increase dosing and improve the exposure profile of MP0533.
Molecular Partners plans to present the next clinical update of the program at the American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting in San Diego on December 7–10, 2024, and data following the protocol amendment are expected in 2025.

Switch-DARPin Platform (next-gen immune cell engagers)
The Switch-DARPin platform provides a logic-gated "on/off" function (the "Switch") to multi-specific DARPin candidates leading to target activation only in the presence of defined antigens. The objective is conditional activation of a targeted immune response.

MP0621 is a Switch-DARPin candidate designed to induce killing of hematopoietic stem cells as a next-generation conditioning regimen for HSCT. The in vivo proof-of-mechanism data, as presented at EHA (Free EHA Whitepaper) 2024, demonstrate that MP0621 could be an efficient next-generation conditioning regimen for autologous HSCT. At present, the non-human primate data do not indicate that MP0621 would serve as a treatment for AML. As Molecular Partners’ portfolio strategy prioritizes therapeutic candidates for oncology, MP0621 is being evaluated for partnering. The Company plans to present a preclinical update on MP0621 at ASH (Free ASH Whitepaper) 2024.

Proof-of-concept preclinical data on an additional Switch-DARPin candidate, namely a CD3 Switch-DARPin T cell engager for solid tumors, will be presented at SITC (Free SITC Whitepaper) 2024 on November 9, 2024. The CD3 Switch-DARPin targets the highly validated immunostimulatory protein CD3 to deliver a T cell-engager (TCE) mechanism with enhanced function via engagement of additional receptors on the surface of T cells. TCEs are a powerful class of immuno-oncology therapies but have faced a range of challenges such as toxicity, poor T cell fitness and immune suppression, particularly in solid tumors. By employing a multi-specific Switch approach, Molecular Partners aims to broaden the therapeutic space for T cell engagers.

MP0317 (localized agonist)

MP0317 is a CD40 agonist designed to activate immune cells specifically within the tumor microenvironment (TME) by anchoring to fibroblast activation protein (FAP) which is expressed in high amounts around tumors. This tumor-localized approach has the potential to deliver greater efficacy with fewer side effects compared to systemic CD40-targeting therapies.

In September 2024, the Company presented details of the transcriptomic analysis from its completed Phase 1 study at CICON 2024. The analysis of patient biopsies pre- and post-treatment with MP0317 showed that this molecule remodels the tumor microenvironment by inducing infiltration of B, plasma, dendritic, and T follicular helper cells.
Molecular Partners plans to share a comprehensive biomarker analysis of its completed Phase 1 study at SITC (Free SITC Whitepaper) on November 9, 2024.

The positive Phase 1 data support further clinical evaluation of MP0317 in combination with complementary anticancer therapies and demonstrated the ability of the DARPin design to deliver on a targeted, tumor-localized CD40 activation mechanism. Molecular Partners is in discussion with leading academic centers regarding potential investigator-initiated combination trials.

On October 31, 2024 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported financial results for the third quarter of 2024 (Press release, Merck & Co, OCT 31, 2024, View Source [SID1234647605]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"Our third-quarter results were strong, as we continue to make progress heading into 2025 and beyond," said Robert M. Davis, chairman and chief executive officer, Merck. "Our pipeline is advancing and expanding, demonstrating our success in creating a sustainable innovation engine, and positioning Merck with a more diversified portfolio to drive growth. I continue to remain confident in the strength of our business and our ability to execute, and I want to thank our colleagues across the globe for their focus and commitment as we work to create lasting value for patients, shareholders and all our stakeholders."

Financial Summary

$ in millions, except EPS amounts

Third Quarter

2024

2023

Change

Change Ex-
Exchange

Sales

$16,657

$15,962

4%

7%

GAAP net income1

3,157

4,745

-33%

-30%

Non-GAAP net income that excludes certain items1,2*

3,985

5,427

-27%

-23%

GAAP EPS

1.24

1.86

-33%

-30%

Non-GAAP EPS that excludes certain items2*

1.57

2.13

-26%

-23%

*Refer to table on page 7.

In the third quarter of 2024, total worldwide sales were $16.7 billion, an increase of 4% compared with the third quarter of 2023; excluding the impact of foreign exchange, growth was 7%. Sales growth in the third quarter of 2024 was primarily due to increased usage of KEYTRUDA globally, contributions from new launches, including WINREVAIR and CAPVAXIVE, and strong growth in Merck’s Animal Health business. Revenue growth in the third quarter of 2024 was partially offset by lower sales of JANUVIA and JANUMET, lower combined sales of GARDASIL/GARDASIL 9 and lower sales of LAGEVRIO. Third-quarter GARDASIL/GARDASIL 9 sales declined year-over-year due to reduced demand in China; outside of China, the company achieved double-digit sales growth for GARDASIL/GARDASIL 9 in almost every major region globally.

For the third quarter of 2024, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $1.24 and non-GAAP EPS was $1.57. The declines in GAAP and Non-GAAP EPS in the third quarter of 2024 versus the prior year were largely due to a net charge of $0.79 per share in the aggregate for the acquisition of Eyebiotech Limited (EyeBio) and a related development milestone, the acquisition of CN201 (now known as MK-1045) from Curon Biopharmaceutical (Curon), as well as a payment received from Daiichi Sankyo related to the expansion of the existing development and commercialization agreement. There were no significant business development transaction charges in the third quarter of 2023.

Non-GAAP EPS in both periods excludes acquisition- and divestiture-related costs, costs related to restructuring programs, as well as income and losses from investments in equity securities.

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

Third-Quarter Sales Performance

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

Third Quarter

$ in millions

2024

2023

Change

Change
Ex-
Exchange

Commentary

Total Sales

$16,657

$15,962

4%

7%

Approximately 2 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market.

Pharmaceutical

14,943

14,263

5%

8%

Increase driven by growth in oncology and cardiovascular, partially offset by declines in diabetes, vaccines and virology.

KEYTRUDA

7,429

6,338

17%

21%

Growth driven by increased global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC), renal cell carcinoma (RCC) and non-small cell lung cancer (NSCLC), as well as continued strong global demand from metastatic indications. Approximately 3 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases.

GARDASIL/GARDASIL 9

2,306

2,585

-11%

-10%

Decline primarily due to lower demand in China compared with prior year, partially offset by higher sales in the U.S., driven by public-sector buying patterns, higher pricing and demand, as well as higher demand in most international regions.

PROQUAD, M-M-R II and VARIVAX

703

713

-1%

-1%

Decline primarily due to timing of shipments and lower tenders in Latin America, largely offset by higher demand in certain international markets.

JANUVIA/JANUMET

482

835

-42%

-38%

Decline primarily due to lower pricing in the U.S., as well as ongoing generic competition in many international markets.

BRIDION

420

424

-1%

0%

Relatively flat compared with prior year due to generic competition in certain international markets, particularly in Europe and Japan, largely offset by higher demand and pricing in the U.S.

LAGEVRIO

383

640

-40%

-36%

Decline primarily due to lower demand in Japan, partially offset by uptake from commercial launch in the U.S.

Lynparza*

337

299

13%

13%

Growth primarily due to higher global demand.

Lenvima*

251

260

-3%

-4%

Decline primarily due to timing of shipments in China in the prior year, partially offset by higher demand in the U.S.

VAXNEUVANCE

239

214

12%

13%

Growth largely driven by continued uptake from launches in Europe and Japan, partially offset by lower demand in the U.S. due to competition.

PREVYMIS

208

157

32%

36%

Growth primarily due to higher global demand, particularly in the U.S.

ROTATEQ

193

156

24%

25%

Growth primarily due to public-sector buying patterns in the U.S. and timing of shipments in China.

WINREVAIR

149

–

–

–

Represents continued uptake since launch in the U.S. in the second quarter.

WELIREG

139

54

156%

157%

Growth primarily driven by higher demand in the U.S., largely attributable to ongoing uptake of a new indication.

Animal Health

1,487

1,400

6%

11%

Growth primarily driven by higher demand and pricing for both Companion Animal and Livestock product portfolios, as well as sales related to July 2024 acquisition of Elanco aqua business. Approximately 2 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases.

Livestock

886

874

1%

7%

Growth primarily driven by higher pricing and higher demand for poultry and swine products, as well as sales related to acquisition of Elanco aqua business.

Companion Animal

601

526

14%

17%

Growth primarily driven by uptake from new product launches, including the injectable formulation of BRAVECTO in certain international markets, as well as higher pricing across product portfolio. Sales of BRAVECTO were $266 million and $235 million in current and prior year quarters, respectively, which represented growth of 13%, or 16% excluding impact of foreign exchange.

Other Revenues**

227

299

-24%

-22%

Decline primarily due to lower payments received for out-licensing arrangements and lower royalty income.

*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.

Third-Quarter Expense, EPS and Related Information

The table below presents selected expense information.

$ in millions

GAAP

Acquisition-
and
Divestiture-
Related
Costs3

Restructuring
Costs

(Income)
Loss From
Investments
in Equity
Securities

Non-
GAAP2

Third Quarter 2024

Cost of sales

$4,080

$639

$192

$-

$3,249

Selling, general and administrative

2,731

43

31

–

2,657

Research and development

5,862

24

–

–

5,838

Restructuring costs

56

–

56

–

–

Other (income) expense, net

(162)

(27)

–

58

(193)

Third Quarter 2023

Cost of sales

$4,264

$552

$33

$-

$3,679

Selling, general and administrative

2,519

17

40

–

2,462

Research and development

3,307

10

–

–

3,297

Restructuring costs

126

–

126

–

–

Other (income) expense, net

126

(24)

–

17

133

GAAP Expense, EPS and Related Information

Gross margin was 75.5% for the third quarter of 2024 compared with 73.3% for the third quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9), partially offset by higher restructuring costs (primarily reflecting asset impairment charges), as well as higher amortization of intangible assets.

Selling, general and administrative (SG&A) expenses were $2.7 billion in the third quarter of 2024, an increase of 8% compared with the third quarter of 2023. The increase was primarily due to higher administrative, promotional, selling, and acquisition-related costs, partially offset by the favorable impact of foreign exchange.

Research and development (R&D) expenses were $5.9 billion in the third quarter of 2024, an increase of 77% compared with the third quarter of 2023. The increase was primarily due to a charge of $1.35 billion for the acquisition of EyeBio and a $100 million charge for a related development milestone, as well as a charge of $750 million to acquire CN201 (MK-1045) from Curon. The increase in R&D expenses was also driven by higher compensation and benefit costs, as well as higher clinical development spending. The increase in R&D expenses was partially offset by the favorable impact of foreign exchange.

Other (income) expense, net, was $162 million of income in the third quarter of 2024 compared with $126 million of expense in the third quarter of 2023. The favorability was primarily due to a $170 million payment received from Daiichi Sankyo related to the expansion of the existing development and commercialization agreement, lower exchange losses and lower net interest expense.

The effective tax rate of 22.7% for the third quarter of 2024 includes a 7.2 percentage point combined unfavorable impact related to the EyeBio and Curon transactions.

GAAP EPS was $1.24 for the third quarter of 2024 compared with $1.86 for the third quarter of 2023. GAAP EPS in the third quarter of 2024 includes a net charge of $0.79 per share in the aggregate for the EyeBio, Curon and Daiichi Sankyo transactions. There were no significant business development transaction charges in the third quarter of 2023.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 80.5% for the third quarter of 2024 compared with 77.0% for the third quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9).

Non-GAAP SG&A expenses were $2.7 billion in the third quarter of 2024, an increase of 8% compared with the third quarter of 2023. The increase was primarily due to higher administrative, promotional and selling costs, partially offset by the favorable impact of foreign exchange.

Non-GAAP R&D expenses were $5.8 billion in the third quarter of 2024, an increase of 77% compared with the third quarter of 2023. The increase was primarily due to a charge of $1.35 billion for the acquisition of EyeBio and a $100 million charge for a related development milestone, as well as a charge of $750 million to acquire CN201 (MK-1045) from Curon. The increase in R&D expenses was also driven by higher compensation and benefit costs, as well as higher clinical development spending. The increase in R&D expenses was partially offset by the favorable impact of foreign exchange.

Non-GAAP other (income) expense, net, was $193 million of income in the third quarter of 2024 compared with $133 million of expense in the third quarter of 2023. The favorability was primarily due to a $170 million payment received from Daiichi Sankyo related to the expansion of the existing development and commercialization agreement, lower exchange losses and lower net interest expense.

The non-GAAP effective tax rate of 21.9% for the third quarter of 2024 includes a 6.0 percentage point combined unfavorable impact related to the EyeBio and Curon transactions.

Non-GAAP EPS was $1.57 for the third quarter of 2024 compared with $2.13 for the third quarter of 2023. Non-GAAP EPS in the third quarter of 2024 includes a net charge of $0.79 per share in the aggregate for the EyeBio, Curon and Daiichi Sankyo transactions. There were no significant business development transaction charges in the third quarter of 2023.

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

Third Quarter

$ in millions, except EPS amounts

2024

2023

EPS

GAAP EPS

$1.24

$1.86

Difference

0.33

0.27

Non-GAAP EPS that excludes items listed below2

$1.57

$2.13

Net Income

GAAP net income1

$3,157

$4,745

Difference

828

682

Non-GAAP net income that excludes items listed below1,2

$3,985

$5,427

Excluded Items:

Acquisition- and divestiture-related costs3

$679

$555

Restructuring costs

279

199

Loss from investments in equity securities

58

17

Decrease to net income

1,016

771

Estimated income tax (benefit) expense

(188)

(89)

Decrease to net income

$828

$682

Pipeline and Portfolio Highlights

In the third quarter, Merck continued to develop and augment its strong, diverse pipeline and achieve key regulatory and clinical milestones.

In cardiovascular disease, Merck continued to build on positive momentum in its U.S. launch of WINREVAIR. As of the end of September 2024, more than 3,700 patients have been prescribed WINREVAIR. The company also received the European Commission’s (EC) approval of WINREVAIR, in combination with other pulmonary arterial hypertension (PAH) therapies, for the treatment of adult patients with PAH with World Health Organization (WHO) functional Class II to III. WINREVAIR is the first activin signaling inhibitor approved for the treatment of PAH in Europe. WINREVAIR has launched in Germany and Merck is working to obtain reimbursement for WINREVAIR in other countries in the EU, which should occur in most other major European markets in the second half of 2025.

In oncology, Merck continued to reinforce its leadership in women’s and earlier stages of cancers and demonstrate progress in its research pipeline. At the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress 2024, three of the company’s data presentations were highlighted during Presidential Symposium sessions. These included overall survival (OS) data from the Phase 3 KEYNOTE-522 trial in high-risk, early-stage TNBC and from the Phase 3 KEYNOTE-A18 trial (also known as ENGOT-cx11/GOG-3047) in high-risk, locally advanced cervical cancer. In addition, new positive data on investigational candidates from Merck’s pipeline were presented, including for patritumab deruxtecan (HER3-DXd), an antibody-drug conjugate (ADC) being developed in collaboration with Daiichi Sankyo, and for sacituzumab tirumotecan (sac-TMT), an anti-TROP2 ADC being developed in collaboration with Kelun-Biotech.

The company also achieved several regulatory milestones, including new approvals for KEYTRUDA-based regimens in the U.S., Europe and Japan. In addition, Merck recently announced top-line results from the KEYNOTE-689 trial, which marks the first positive trial in two decades for patients with resected, locally advanced head and neck squamous cell carcinoma (LA-HNSCC).

In vaccines, the CDC’s Advisory Committee on Immunization Practices (ACIP) voted in October 2024 to recommend CAPVAXIVE for individuals 50 to 64 years of age. This decision expanded upon the initial unanimous recommendation in June 2024 for use of CAPVAXIVE in adults age 65 and older, among other cohorts.

At IDWeek 2024, Merck presented positive results from the Phase 2b/3 trial of clesrovimab (MK-1654), an investigational respiratory syncytial virus (RSV) preventative monoclonal antibody for infants. These results support the potential for clesrovimab to become the first and only single-dose immunization designed to protect infants with the same dose, regardless of weight, for the duration of their first RSV season (six months).

In immunology, long-term efficacy and safety data for tulisokibart (MK-7240), an investigational humanized monoclonal antibody directed to a novel target, tumor necrosis factor (TNF)-like cytokine 1A (TL1A), from the Phase 2 ARTEMIS-UC and APOLLO-CD studies in ulcerative colitis (UC) and Crohn’s disease (CD), were presented at the United European Gastroenterology (UEG) Week 2024 Congress. Both studies showed that, at week 50, maintenance of treatment efficacy was generally observed in 12-week induction responders. Phase 3 studies in UC and CD are ongoing.

In addition, Merck continued to expand and diversify its pipeline by securing strategic business development opportunities. Merck completed its acquisition of CN201 (MK-1045), a next-generation CD3xCD19 bispecific antibody with potential applications in B-cell malignancies and autoimmune diseases, from Curon. Merck also announced the expansion of the global development and commercialization agreement with Daiichi Sankyo to include MK-6070, an investigational delta-like ligand 3 (DLL3) targeting T-cell engager. The companies are planning to evaluate MK-6070 in combination with ifinatamab deruxtecan (I-DXd) in certain patients with small cell lung cancer (SCLC), as well as other potential combinations.

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

Oncology

FDA Approved KEYTRUDA Plus Pemetrexed and Platinum Chemotherapy as First-Line Treatment for Adult Patients With Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma, Based on Results From Phase 3 KEYNOTE-483/CCTG IND.227 Trial

(Read Announcement)

EC Approved KEYTRUDA Plus Padcev as First-Line Treatment of Unresectable or Metastatic Urothelial Carcinoma in Adults, Based on Results From Phase 3 KEYNOTE-A39/EV-302 Trial

(Read Announcement)

KEYTRUDA Received 30th Approval From EC With Two New Indications in Gynecologic Cancers, Based on Results From Phase 3 KEYNOTE-868/NRG-GY018 and KEYNOTE-A18 Trials

(Read Announcement)

KEYTRUDA Received New Approvals in Japan for Certain Patients With NSCLC, Based on Results From Phase 3 KEYNOTE-671 Trial, and for Radically Unresectable Urothelial Carcinoma, Based on Results From Phase 3 KEYNOTE-A39/EV-302 and Phase 2 KEYNOTE-052 Trials

(Read Announcement)

KEYTRUDA Plus Chemotherapy Before Surgery and Continued as Single Agent After Surgery Reduced Risk of Death by More Than One-Third (34%) Versus Neoadjuvant Chemotherapy in High-Risk, Early-Stage TNBC, Based on Results From Phase 3 KEYNOTE-522

(Read Announcement)

KEYTRUDA Plus Chemoradiotherapy (CRT) Reduced Risk of Death by 33% Versus CRT Alone in Patients With Newly Diagnosed, High-Risk, Locally Advanced Cervical Cancer, Based on Results From Phase 3 KEYNOTE-A18/ENGOT-cx11/GOG-3047 Trial

(Read Announcement)

KEYTRUDA Ten-Year Data Demonstrated Sustained OS Benefit Versus Ipilimumab in Advanced Melanoma, Based on Results From Phase 3 KEYNOTE-006 Trial

(Read Announcement)

KEYTRUDA Plus Lenvima in Combination With Transarterial Chemoembolization (TACE) Significantly Improved Progression-Free Survival Compared to TACE Alone in Patients With Unresectable, Non-Metastatic Hepatocellular Carcinoma, Based on Results From Phase 3 LEAP-012 Trial

(Read Announcement)

KEYTRUDA Plus Trastuzumab and Chemotherapy Significantly Improved OS Versus Trastuzumab and Chemotherapy Alone in First-Line Treatment of Patients With HER2-Positive Advanced Gastric or GEJ Adenocarcinoma, Based on Results From Phase 3 KEYNOTE-811 Trial

(Read Announcement)

KEYTRUDA Met Primary Endpoint of Event-Free Survival as Perioperative Treatment Regimen in Patients With Resected, LA-HNSCC, Based on Results From Phase 3 KEYNOTE-689 Trial

(Read Announcement)

Patritumab Deruxtecan (HER3-DXd) Demonstrated Statistically Significant Improvement in Progression-Free Survival Versus Doublet Chemotherapy in Patients With Locally Advanced or Metastatic EGFR-Mutated NSCLC, Based on Results From Phase 3 HERTHENA-Lung02 Trial

(Read Announcement)

Ifinatamab Deruxtecan Continued to Demonstrate Promising Objective Response Rates in Patients With Extensive-Stage SCLC, Based on Results From Phase 2 IDeate-Lung01 Trial

(Read Announcement)

Merck and Moderna Initiated Phase 3 Trial Evaluating Adjuvant V940 (mRNA-4157) in Combination With KEYTRUDA After Neoadjuvant KEYTRUDA and Chemotherapy in Patients With Certain Types of NSCLC

(Read Announcement)

Merck Initiated Phase 3 Shorespan-007 Trial for Bomedemstat, an Investigational Candidate for the Treatment of Certain Patients With Essential Thrombocythemia

(Read Announcement)

Merck and Daiichi Sankyo Initiated Phase 3 IDeate-Lung02 Trial of Ifinatamab Deruxtecan in Patients With Relapsed SCLC

(Read Announcement)

Merck and Exelixis Signed Clinical Development Collaboration To Evaluate Investigational Zanzalintinib in Combination With KEYTRUDA in Head and Neck Cancer and in Combination With WELIREG in RCC

(Read Announcement)

Vaccines

Clesrovimab (MK-1654), an Investigational RSV Preventative Monoclonal Antibody, Significantly Reduced Incidence of RSV Disease and Hospitalization in Healthy Preterm and Full-Term Infants, Based on Results From Phase 2b/3 MK-1654-004 Trial

(Read Announcement)

CDC’s ACIP Recommended CAPVAXIVE for Pneumococcal Vaccination in Adults 50 Years of Age and Older

(Read Announcement)

CAPVAXIVE Demonstrated Positive Immune Responses in Adults With Increased Risk for Pneumococcal Disease, Based on Results From Phase 3 STRIDE-8 Trial

(Read Announcement)

Merck Announced Positive Top-line Results From Phase 3 Trial Evaluating Efficacy and Safety of GARDASIL 9 in Japanese Males

(Read Announcement)

Cardiovascular

EC Approved WINREVAIR in Combination With Other PAH Therapies for the Treatment of PAH in Adult Patients With Functional Class II-III, Based on Results From Phase 3 STELLAR Trial

(Read Announcement)

Immunology

Merck Presented New Long-Term Data for Tulisokibart (MK-7240), an Investigational Anti-TL1A Monoclonal Antibody, in Inflammatory Bowel Disease at UEG Week 2024

(Read Announcement)

Infectious Diseases

Merck and Gilead Announced Phase 2 Data Showing a Treatment Switch to an Investigational Oral Once-Weekly Combination Regimen of Islatravir and Lenacapavir (MK-8591D) Maintained Viral Suppression in Adults at Week 48

(Read Announcement)

Ophthalmology

Merck and EyeBio Initiated Phase 2b/3 Clinical Trial for MK-3000 for the Treatment of Diabetic Macular Edema

(Read Announcement)

Sustainability Highlights

Merck issued its 2023/2024 Impact Report, reaffirming its commitment to operating responsibly and enabling broad access to its products. The report noted how the company reached more than 550 million people around the world with its medicines and vaccines through commercial channels, clinical trials, voluntary licensing and product donations.

Full-Year 2024 Financial Outlook

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

Full Year 2024

Updated

Prior

Sales*

$63.6 to $64.1 billion

$63.4 to $64.4 billion

Non-GAAP Gross margin2

Approximately 81%

Approximately 81%

Non-GAAP Operating expenses2**

$27.8 to $28.3 billion

$26.8 to $27.6 billion

Non-GAAP Other (income) expense, net2

Approximately $100 million expense

Approximately $350 million expense

Non-GAAP Effective tax rate2

16.0% to 17.0%

15.5% to 16.5%

Non-GAAP EPS2***

$7.72 to $7.77

$7.94 to $8.04

Share count (assuming dilution)

Approximately 2.54 billion

Approximately 2.54 billion

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

**Includes one-time R&D charges of $656 million for Harpoon Therapeutics, Inc. (Harpoon) acquisition, $1.45 billion for EyeBio acquisition and related development milestone payment, and $750 million for acquisition of CN201 (MK-1045) from Curon. Outlook does not assume any additional significant potential business development transactions.

***Includes net one-time charge of $1.05 per share in aggregate for the Harpoon, EyeBio and Curon transactions, and the cash payment received from Daiichi Sankyo.

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 growth, including from KEYTRUDA, new product launches and Animal Health. As a result, Merck is narrowing the range of its full-year sales outlook.

Merck now expects its full-year sales to be between $63.6 billion and $64.1 billion, including a negative impact of foreign exchange of approximately 3 percentage points, at mid-October 2024 exchange rates. Approximately 2 percentage points of the negative impact of foreign exchange is due to the devaluation of the Argentine peso, which is being largely offset by inflation-related price increases, consistent with practice in that market.

Merck now expects its full-year non-GAAP effective income tax rate to be between 16.0% and 17.0%, which includes an unfavorable impact related to the one-time charge associated with the acquisition of CN201 (MK-1045) from Curon.

Merck now expects its full-year non-GAAP EPS to be between $7.72 and $7.77. The outlook includes a negative impact of foreign exchange of approximately $0.30 per share. The negative impact of foreign exchange is primarily due to the devaluation of the Argentine peso, which is being largely offset by inflation-related price increases, consistent with practice in that market. This revised non-GAAP EPS range reflects a net charge of $0.24 per share for the following items not previously included in the outlook:

The acquisition of CN201 (MK-1045) from Curon.
Payment received from Daiichi Sankyo related to the expansion of the existing development and commercialization agreement.
Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions.

Non-GAAP EPS excludes acquisition- and divestiture-related costs, costs related to restructuring programs, income and losses from investments in equity securities, as well as a tax benefit in 2024 due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Thursday, October 31, at 9 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures, and slides highlighting the results, will be available at www.merck.com.

All participants may join the call by dialing (800) 369-3351 (U.S. and Canada Toll-Free) or (517) 308-9448 and using the access code 9818590.

On October 31, 2024 Lyell Immunopharma, Inc. (Nasdaq: LYEL), a clinical-stage T-cell reprogramming company advancing a pipeline of next-generation CAR T-cell therapies for patients with solid tumors or hematologic malignancies, reported that it has completed its acquisition of ImmPACT Bio USA Inc. ("ImmPACT"), a privately-owned clinical-stage cell therapy company (Press release, Lyell Immunopharma, OCT 31, 2024, View Source [SID1234647604]). The acquisition strengthens Lyell’s clinical-stage pipeline of CAR T-cell therapies and complements its suite of innovative technologies designed to generate longer-lasting, functional T cells to achieve more durable outcomes for patients. Lyell will accelerate the development of IMPT-314, a dual-targeting CD19/20 chimeric antigen receptor (CAR) T-cell product candidate for hematologic malignancies, including B-cell non-Hodgkin lymphoma. In connection with the acquisition, Sumant Ramachandra, M.D., Ph.D., MBA, the former Chief Executive Officer of ImmPACT Bio, has been appointed to the Lyell Board of Directors.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"We’re excited to welcome ImmPACT to Lyell and look forward to working together to transform the treatment of cancer with next-generation cell therapies that offer patients improved outcomes," stated Lynn Seely, M.D., Lyell’s President and Chief Executive Officer. "We are focused on accelerating the development of IMPT-314 for patients with aggressive B-cell non-Hodgkin lymphoma and look forward to presenting initial data from the Phase 1-2 trial of IMPT-314 in patients treated in the 3rd line CAR-naïve setting at a major medical conference later this year."

"On behalf of my fellow directors, I am delighted to welcome Dr. Ramachandra to the Lyell Board," stated Rick Klausner, M.D., chair of Lyell’s Board of Directors. "Dr. Ramachandra’s experience and passion for developing innovative therapies for patients will help guide us as we integrate our two organizations and advance a pipeline of next-generation CAR T-cell therapies."

Dr. Ramachandra has served as the Chief Executive Officer of ImmPACT Bio USA, Inc. since November 2021. He also served as a member of the board of directors of ImmPACT from December 2021 to October 2024. Prior to joining ImmPACT, Dr. Ramachandra was most recently Chief Science, Technology and Medical Officer of Baxter International. In addition to these responsibilities, he was appointed President of Baxter Pharmaceuticals. Prior to Baxter, he worked at Pfizer, most recently as Senior Vice President, Head of Research & Development, Pfizer Essential Health. He served as Chief Scientific Officer at Hospira from 2008 to 2015 prior to Pfizer’s acquisition of Hospira in 2015. Before entering the industry in 2000, he was an intern and resident physician, medical services, at Massachusetts General Hospital, Harvard Medical School. Dr. Ramachandra completed his undergraduate degree in biochemistry, graduate degree (Ph.D.) in experimental pathology in the study of chronic lymphocytic leukemia and his medical degree (M.D.) at Rutgers University. In addition, he earned his M.B.A. at The Wharton School at the University of Pennsylvania.

As previously disclosed, following the closing of this acquisition, Lyell expects its cash balance will fund operations into 2027, through important clinical milestones for each pipeline program, including initiation of a pivotal trial for IMPT-314, which is expected to start in 2025.