On July 30, 2024 Johnson & Johnson (NYSE:JNJ) reported that the U.S. Food and Drug Administration (FDA) approved DARZALEX FASPRO (daratumumab and hyaluronidase-fihj) in combination with bortezomib, lenalidomide and dexamethasone (D-VRd) for induction and consolidation in patients with newly diagnosed multiple myeloma (NDMM) who are eligible for an autologous stem cell transplant (ASCT) (Press release, Johnson & Johnson, JUL 30, 2024, View Source [SID1234645182]). Patients will have the opportunity to receive this DARZALEX FASPRO-based quadruplet therapy at initial diagnosis, providing them with a new treatment that may significantly improve outcomes.

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This approval is supported by data from the Phase 3 PERSEUS study evaluating DARZALEX FASPRO in a regimen that included D-VRd induction and consolidation therapy compared to bortezomib, lenalidomide and dexamethasone (VRd) during induction and consolidation in patients with NDMM eligible for ASCT.1 Following consolidation, patients received an investigational treatment regimen for maintenance that included DARZALEX FASPRO in combination with lenalidomide or lenalidomide alone.1

"Multiple myeloma has a highly varied clinical course among patients and in each individual patient, and there is a continued need for innovation and therapies that employ different targets and combinations to provide patients with treatment options at diagnosis and throughout the course of their disease," said Amrita Y. Krishnan, M.D., Professor and Director of the Judy and Bernard Briskin Multiple Myeloma Center, City of Hope.* "The efficacy data supporting this new quadruplet regimen, combined with its established safety and tolerability profile, provide compelling evidence that adding D-VRd upon initial diagnosis as compared to VRd can deepen responses and prolong remissions in the context of autologous stem cell transplantation."

Findings from the PERSEUS study demonstrated a significant improvement in the primary endpoint of progression-free survival (PFS), with D-VRd reducing the risk of disease progression or death by 60 percent compared to VRd (HR [95% CI]: 0.40 [0.29, 0.57]; p-value < 0.0001).1 Treatment with D-VRd induction and consolidation resulted in deeper responses at the end of consolidation compared to VRd: minimal residual disease (MRD) negativity rates of 57.5 percent vs. 32.5 percent, and MRD-negativity rates in patients with complete response (CR) or better of 76.6 percent vs. 58.5 percent, respectively.1

"This latest indication for DARZALEX FASPRO-based quadruplet therapy demonstrated a clinically significant reduction in disease progression or death during first-line treatment when patients are likely to experience their deepest responses," said Jordan Schecter, M.D., Vice President, Disease Area Leader, Multiple Myeloma, Johnson & Johnson. "Today’s approval embodies our commitment to setting new standards of care for patients newly diagnosed with multiple myeloma who are transplant eligible."

The overall safety profile of D-VRd was consistent with the known safety profiles for DARZALEX FASPRO and VRd.1 The most common adverse reactions (≥20%) in patients with multiple myeloma who received D-VRd are peripheral neuropathy, fatigue, edema, pyrexia, upper respiratory infection, constipation, diarrhea, musculoskeletal pain, insomnia, and rash.1

About the PERSEUS Study
The PERSEUS study is being conducted in collaboration with the European Myeloma Network as the sponsor. PERSEUS is an ongoing, randomized, open-label, Phase 3 study comparing the efficacy and safety of D-VRd during induction and consolidation versus VRd during induction and consolidation in patients with NDMM eligible for ASCT. Following consolidation, patients received an investigational treatment regimen for maintenance that included DARZALEX FASPRO in combination with lenalidomide or lenalidomide alone. The trial was not designed to isolate the effect of DARZALEX FASPRO in the maintenance phase of treatment. The efficacy of DARZALEX FASPRO in combination with lenalidomide for maintenance has not been established. The primary endpoint is PFS, and secondary endpoints include overall CR or better rate, and overall MRD-negativity (in patients with CR or better). The median age is 61.0 (range, 32-70) years for patients in the D-VRd arm and 59.0 (range, 31-70) years for patients in the VRd arm.2 The study is being conducted in 14 countries in Europe and Australia.

About Multiple Myeloma
Multiple myeloma is a blood cancer that affects a type of white blood cell called plasma cells, which are found in the bone marrow.3 In multiple myeloma, these malignant plasma cells proliferate and replace normal cells in the bone marrow.4 Multiple myeloma is the second most common blood cancer worldwide and remains an incurable disease.5 In 2024, it is estimated that more than 35,000 people will be diagnosed with multiple myeloma in the U.S. and more than 12,000 will die from the disease.6 People with multiple myeloma have a 5-year survival rate of 59.8 percent.6 While some people diagnosed with multiple myeloma initially have no symptoms, most patients are diagnosed due to symptoms that can include bone fracture or pain, low red blood cell counts, tiredness, high calcium levels, kidney problems or infections.7,8

About DARZALEX FASPRO
DARZALEX FASPRO (daratumumab and hyaluronidase-fihj) received U.S. FDA approval in May 2020 and is approved for nine indications in multiple myeloma, four of which are for frontline treatment in newly diagnosed patients who are transplant eligible or ineligible.1 It is the only subcutaneous CD38-directed antibody approved to treat patients with multiple myeloma. DARZALEX FASPRO is co-formulated with recombinant human hyaluronidase PH20 (rHuPH20), Halozyme’s ENHANZE drug delivery technology.

In August 2012, Janssen Biotech, Inc. and Genmab A/S entered a worldwide agreement, which granted Janssen an exclusive license to develop, manufacture and commercialize daratumumab.

For more information, visit View Source

DARZALEX FASPRO INDICATIONS AND IMPORTANT SAFETY INFORMATION

INDICATIONS

DARZALEX FASPRO (daratumumab and hyaluronidase-fihj) is indicated for the treatment of adult patients with multiple myeloma:

In combination with bortezomib, lenalidomide, and dexamethasone for induction and consolidation in newly diagnosed patients who are eligible for autologous stem cell transplant
In combination with bortezomib, melphalan, and prednisone in newly diagnosed patients who are ineligible for autologous stem cell transplant
In combination with lenalidomide and dexamethasone in newly diagnosed patients who are ineligible for autologous stem cell transplant and in patients with relapsed or refractory multiple myeloma who have received at least one prior therapy
In combination with bortezomib, thalidomide, and dexamethasone in newly diagnosed patients who are eligible for autologous stem cell transplant
In combination with pomalidomide and dexamethasone in patients who have received at least one prior line of therapy including lenalidomide and a proteasome inhibitor (PI)
In combination with carfilzomib and dexamethasone in patients with relapsed or refractory multiple myeloma who have received one to three prior lines of therapy
In combination with bortezomib and dexamethasone in patients who have received at least one prior therapy
As monotherapy in patients who have received at least three prior lines of therapy including a PI and an immunomodulatory agent or who are double refractory to a PI and an immunomodulatory agent
IMPORTANT SAFETY INFORMATION

CONTRAINDICATIONS 
DARZALEX FASPRO is contraindicated in patients with a history of severe hypersensitivity to daratumumab, hyaluronidase, or any of the components of the formulation. 

WARNINGS AND PRECAUTIONS 

Hypersensitivity and Other Administration Reactions 
Both systemic administration-related reactions, including severe or life-threatening reactions, and local injection-site reactions can occur with DARZALEX FASPRO. Fatal reactions have been reported with daratumumab-containing products, including DARZALEX FASPRO. 

Systemic Reactions 
In a pooled safety population of 1249 patients with multiple myeloma (N=1056) or light chain (AL) amyloidosis (N=193) who received DARZALEX FASPRO as monotherapy or in combination, 7% of patients experienced a systemic administration-related reaction (Grade 2: 3.2%, Grade 3: 0.7%, Grade 4: 0.1%). Systemic administration-related reactions occurred in 7% of patients with the first injection, 0.2% with the second injection, and cumulatively 1% with subsequent injections. The median time to onset was 2.9 hours (range: 5 minutes to 3.5 days). Of the 165 systemic administration-related reactions that occurred in 93 patients, 144 (87%) occurred on the day of DARZALEX FASPRO administration. Delayed systemic administration-related reactions have occurred in 1% of the patients.

Severe reactions included hypoxia, dyspnea, hypertension, tachycardia, and ocular adverse reactions, including choroidal effusion, acute myopia, and acute angle closure glaucoma. Other signs and symptoms of systemic administration-related reactions may include respiratory symptoms, such as bronchospasm, nasal congestion, cough, throat irritation, allergic rhinitis, and wheezing, as well as anaphylactic reaction, pyrexia, chest pain, pruritus, chills, vomiting, nausea, hypotension, and blurred vision.

Pre-medicate patients with histamine-1 receptor antagonist, acetaminophen, and corticosteroids. Monitor patients for systemic administration-related reactions, especially following the first and second injections. For anaphylactic reaction or life-threatening (Grade 4) administration-related reactions, immediately and permanently discontinue DARZALEX FASPRO. Consider administering corticosteroids and other medications after the administration of DARZALEX FASPRO depending on dosing regimen and medical history to minimize the risk of delayed (defined as occurring the day after administration) systemic administration-related reactions.

Ocular adverse reactions, including acute myopia and narrowing of the anterior chamber angle due to ciliochoroidal effusions with potential for increased intraocular pressure or glaucoma, have occurred with daratumumab-containing products. If ocular symptoms occur, interrupt DARZALEX FASPRO and seek immediate ophthalmologic evaluation prior to restarting DARZALEX FASPRO.

Local Reactions 
In this pooled safety population, injection-site reactions occurred in 7% of patients, including Grade 2 reactions in 0.8%. The most frequent (>1%) injection-site reaction was injection-site erythema. These local reactions occurred a median of 5 minutes (range: 0 minutes to 6.5 days) after starting administration of DARZALEX FASPRO. Monitor for local reactions and consider symptomatic management.

Neutropenia
Daratumumab may increase neutropenia induced by background therapy. Monitor complete blood cell counts periodically during treatment according to manufacturer’s prescribing information for background therapies. Monitor patients with neutropenia for signs of infection. Consider withholding DARZALEX FASPRO until recovery of neutrophils. In lower body weight patients receiving DARZALEX FASPRO, higher rates of Grade 3-4 neutropenia were observed.

Thrombocytopenia 
Daratumumab may increase thrombocytopenia induced by background therapy. Monitor complete blood cell counts periodically during treatment according to manufacturer’s prescribing information for background therapies. Consider withholding DARZALEX FASPRO until recovery of platelets. 

Embryo-Fetal Toxicity 
Based on the mechanism of action, DARZALEX FASPRO can cause fetal harm when administered to a pregnant woman. DARZALEX FASPRO may cause depletion of fetal immune cells and decreased bone density. Advise pregnant women of the potential risk to a fetus. Advise females with reproductive potential to use effective contraception during treatment with DARZALEX FASPRO and for 3 months after the last dose. 

The combination of DARZALEX FASPRO with lenalidomide, thalidomide, or pomalidomide is contraindicated in pregnant women because lenalidomide, thalidomide, and pomalidomide may cause birth defects and death of the unborn child. Refer to the lenalidomide, thalidomide, or pomalidomide prescribing information on use during pregnancy. 

Interference With Serological Testing 
Daratumumab binds to CD38 on red blood cells (RBCs) and results in a positive indirect antiglobulin test (indirect Coombs test). Daratumumab-mediated positive indirect antiglobulin test may persist for up to 6 months after the last daratumumab administration. Daratumumab bound to RBCs masks detection of antibodies to minor antigens in the patient’s serum. The determination of a patient’s ABO and Rh blood type are not impacted. 

Notify blood transfusion centers of this interference with serological testing and inform blood banks that a patient has received DARZALEX FASPRO. Type and screen patients prior to starting DARZALEX FASPRO. 

Interference With Determination of Complete Response 
Daratumumab is a human immunoglobulin G (IgG) kappa monoclonal antibody that can be detected on both the serum protein electrophoresis (SPE) and immunofixation (IFE) assays used for the clinical monitoring of endogenous M-protein. This interference can impact the determination of complete response and of disease progression in some DARZALEX FASPRO-treated patients with IgG kappa myeloma protein. 

ADVERSE REACTIONS 
In multiple myeloma, the most common adverse reaction (≥20%) with DARZALEX FASPRO monotherapy is upper respiratory tract infection. The most common adverse reactions with combination therapy (≥20% for any combination) include fatigue, nausea, diarrhea, dyspnea, insomnia, headache, pyrexia, cough, muscle spasms, back pain, vomiting, hypertension, upper respiratory tract infection, peripheral neuropathy, peripheral sensory neuropathy, constipation, pneumonia, edema, peripheral edema, musculoskeletal pain, and rash.

The most common hematology laboratory abnormalities (≥40%) with DARZALEX FASPRO are decreased leukocytes, decreased lymphocytes, decreased neutrophils, decreased platelets, and decreased hemoglobin. 

Please click here to read full Prescribing Information for DARZALEX FASPRO.

On July 30, 2024 Merck (NYSE: MRK), known as MSD outside the United States and Canada, reported financial results for the second quarter of 2024 (Press release, Merck & Co, JUL 30, 2024, View Source [SID1234645165]).

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"Our business is demonstrating strong momentum as we exit the first half of the year," said Robert M. Davis, chairman and chief executive officer, Merck. "Through excellent scientific, commercial and operational execution, we’re achieving significant milestones for our company and for patients, including the launch of WINREVAIR. I am proud of our dedicated teams around the world that are working tirelessly to advance our deep pipeline as we continue delivering innovation that solves unmet medical needs."

Financial Summary

Second Quarter
$ in millions, except EPS amounts 2024 2023 Change Change Ex-
Exchange
Sales $ 16,112 $ 15,035 7 % 11 %
GAAP net income (loss)1 5,455 (5,975 ) N/M N/M
Non-GAAP net income (loss) that excludes certain items1,2* 5,809 (5,220 ) N/M N/M
GAAP EPS 2.14 (2.35 ) N/M N/M
Non-GAAP EPS that excludes certain items2* 2.28 (2.06 ) N/M N/M

*Refer to table on page 7.

N/M – Not meaningful

For the second quarter of 2024, Generally Accepted Accounting Principles (GAAP) earnings per share (EPS) assuming dilution was $2.14 and non-GAAP EPS was $2.28. GAAP and non-GAAP loss per share for the second quarter of 2023 include a charge of $4.02 per share for the acquisition of Prometheus Biosciences, Inc. (Prometheus). Non-GAAP EPS in both periods excludes acquisition- and divestiture-related costs, costs related to restructuring programs, as well as income and losses from investments in equity securities. Non-GAAP EPS in the second quarter of 2024 also excludes a tax benefit due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.

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

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

2 Merck is providing certain 2024 and 2023 non-GAAP information that excludes certain items because of the nature of these items and the impact they have on the analysis of underlying business performance and trends. Management believes that providing this information enhances investors’ understanding of the company’s results because management uses non-GAAP results to assess performance. Management uses non-GAAP measures internally for planning and forecasting purposes and to measure the performance of the company along with other metrics. In addition, annual employee compensation, including senior management’s compensation, is derived in part using a non-GAAP pretax income metric. This information should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP. For a description of the non-GAAP adjustments, see Table 2a attached to this release.

Second-Quarter Sales Performance

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

Second Quarter
$ in millions 2024 2023 Change Change
Ex-
Exchange Commentary
Total Sales $ 16,112 $ 15,035 7 % 11 % Approximately 2 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases, consistent with practice in that market.
Pharmaceutical 14,408 13,457 7 % 11 % Increase driven by growth in oncology, cardiovascular and vaccines, partially offset by declines in diabetes and virology.
KEYTRUDA 7,270 6,271 16 % 21 % Growth driven by increased global uptake in earlier-stage indications, including triple-negative breast cancer (TNBC) and renal cell carcinoma, as well as non-small cell lung cancer in the U.S., and continued strong global demand from metastatic indications. Approximately 4 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases.
GARDASIL/GARDASIL 9 2,478 2,458 1 % 4 % Growth primarily due to higher sales in the U.S. driven by higher pricing, demand and public-sector buying patterns, as well as higher demand in certain ex-U.S. markets. Growth was largely offset by lower sales in China due to timing of shipments compared with prior year.
JANUVIA/JANUMET 629 864 -27 % -23 % Decline primarily due to lower pricing and demand in the U.S., as well as ongoing generic competition in many international markets, particularly in Europe and the Asia Pacific region.
PROQUAD, M-M-R II and VARIVAX 617 582 6 % 7 % Growth largely from higher pricing and demand in the U.S.
BRIDION 455 502 -9 % -8 % Decline primarily due to generic competition in certain ex-U.S. markets, particularly in Europe and the Asia Pacific region, partially offset by higher demand in the U.S.
Lynparza* 317 310 2 % 4 % Growth due to higher demand in the U.S. and certain international markets, particularly in China and Europe.
Lenvima* 249 242 3 % 4 % Growth primarily from higher demand in the U.S.
VAXNEUVANCE 189 168 13 % 16 % Growth largely driven by continued uptake from launches in Japan and Europe, partially offset by lower demand and public-sector buying patterns in the U.S.
PREVYMIS 188 143 31 % 35 % Growth primarily due to higher global demand, particularly in the U.S., China and Europe.

ROTATEQ 163 131 25 % 26 % Growth primarily due to timing of shipments to China and public-sector buying patterns in the U.S., partially offset by lower demand in the U.S.
WELIREG 126 50 150 % 150 % Growth primarily driven by higher demand in the U.S., largely attributable to launch of a new indication.
LAGEVRIO 110 203 -46 % -42 % Decline due to lower demand and pricing in certain markets in the Asia Pacific region, partially offset by higher demand in Japan and the U.S.
WINREVAIR 70 - - - Represents sales in the U.S. following approval in March 2024. About 40% of sales were attributable to doses administered to patients and remainder was due to distributors building inventory in support of increasing demand.
Animal Health 1,482 1,456 2 % 6 % Growth primarily driven by higher pricing in both Livestock and Companion Animal product portfolios, as well as higher demand for Livestock products, partially offset by a decline in Companion Animal distributor inventory. Approximately 3 percentage points of the negative impact of foreign exchange was due to devaluation of Argentine peso, which was largely offset by inflation-related price increases.
Livestock 837 807 4 % 11 % Growth primarily driven by higher demand for ruminant and poultry products, as well as higher pricing across product portfolio.
Companion Animal 645 649 -1 % 1 % Sales were relatively flat compared with prior year reflecting lower distributor inventory, largely offset by higher pricing across product portfolio. Sales of BRAVECTO were $331 million and $326 million in current and prior-year quarters, respectively, which represented growth of 2%, or 3% excluding impact of foreign exchange.
Other Revenues** 222 122 82 % 53 % Growth primarily due to higher royalty income and favorable impact of revenue hedging activities.

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

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

Second-Quarter Expense, EPS and Related Information

The table below presents selected expense information.

$ in millions GAAP Acquisition-
and
Divestiture-
Related
Costs3 Restructuring
Costs (Income)
Loss From
Investments
in Equity
Securities Non-
GAAP2
Second Quarter 2024
Cost of sales $ 3,745 $ 606 $ 66 $ - $ 3,073
Selling, general and administrative 2,739 24 31 - 2,684
Research and development 3,500 20 - - 3,480
Restructuring costs 80 - 80 - -
Other (income) expense, net 42 (17 ) - (49 ) 108

Second Quarter 2023
Cost of sales $ 4,024 $ 467 $ 32 $ - $ 3,525
Selling, general and administrative 2,702 25 52 - 2,625
Research and development 13,321 9 1 - 13,311
Restructuring costs 151 - 151 - -
Other (income) expense, net 172 (3 ) - 194 (19 )

GAAP Expense, EPS and Related Information

Gross margin was 76.8% for the second quarter of 2024 compared with 73.2% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9), partially offset by higher amortization of intangible assets.

Selling, general and administrative (SG&A) expenses were $2.7 billion in the second quarter of 2024, an increase of 1% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange and lower restructuring costs.

Research and development (R&D) expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs.

Other (income) expense, net, was $42 million of expense in the second quarter of 2024 compared with $172 million of expense in the second quarter of 2023. The decrease was primarily due to income from investments in equity securities in 2024 compared with losses in 2023, partially offset by higher net interest expense in 2024.

3 Reflects expenses related to acquisitions of businesses, including the amortization of intangible assets, intangible asset impairment charges and expense or income related to changes in the estimated fair value measurement of liabilities for contingent consideration. Also includes integration, transaction and certain other costs associated with acquisitions and divestitures, as well as amortization of intangible assets related to collaborations and licensing arrangements.

The effective tax rate of 9.1% for the second quarter of 2024 includes a 4.3 percentage point favorable impact due to a reduction in reserves for unrecognized income tax benefits, resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.

GAAP EPS was $2.14 for the second quarter of 2024 compared with GAAP loss per share of $2.35 for the second quarter of 2023. GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 80.9% for the second quarter of 2024 compared with 76.6% for the second quarter of 2023. The increase was primarily due to the favorable impact of product mix (including lower royalty rates related to KEYTRUDA and GARDASIL/GARDASIL 9).

Non-GAAP SG&A expenses were $2.7 billion in the second quarter of 2024, an increase of 2% compared with the second quarter of 2023. The increase was primarily due to higher administrative and promotional costs, largely offset by the favorable impact of foreign exchange.

Non-GAAP R&D expenses were $3.5 billion in the second quarter of 2024 compared with $13.3 billion in the second quarter of 2023. The decrease was primarily due to a $10.2 billion charge in the second quarter of 2023 for the acquisition of Prometheus, partially offset by higher clinical development spending and increased compensation and benefit costs.

Non-GAAP other (income) expense, net, was $108 million of expense in the second quarter of 2024 compared with $19 million of income in the second quarter of 2023, primarily due to higher net interest expense.

The non-GAAP effective tax rate was 14.1% for the second quarter of 2024.

Non-GAAP EPS was $2.28 for the second quarter of 2024 compared with non-GAAP loss per share of $2.06 for the second quarter of 2023. Non-GAAP loss per share in the second quarter of 2023 includes a charge of $4.02 per share for the acquisition of Prometheus.

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

Second Quarter
$ in millions, except EPS amounts 2024 2023
EPS
GAAP EPS $ 2.14 $ (2.35 )
Difference 0.14 0.29
Non-GAAP EPS that excludes items listed below2 $ 2.28 $ (2.06 )

Net Income (Loss)
GAAP net income (loss)1 $ 5,455 $ (5,975 )
Difference 354 755
Non-GAAP net income (loss) that excludes items listed below1,2 $ 5,809 $ (5,220 )

Excluded Items:
Acquisition- and divestiture-related costs3 $ 633 $ 498
Restructuring costs 177 236
(Income) loss from investments in equity securities (49 ) 194
Decrease to net income/increase to net loss before taxes 761 928
Income tax (benefit) expense4 (407 ) (173 )
Decrease to net income/increase to net loss $ 354 $ 755

Pipeline and Portfolio Highlights

In the second quarter, Merck demonstrated further progress in its strong and diverse pipeline, achieving multiple regulatory and clinical milestones.

In vaccines, Merck recently received approval from the U.S. Food and Drug Administration (FDA) for CAPVAXIVE, now the first pneumococcal conjugate vaccine specifically designed to address the serotypes responsible for approximately 85% of invasive pneumococcal disease cases in adults age 65 and older, based on the U.S. Centers for Disease Control and Prevention (CDC) data from 2018-2021. The CDC’s Advisory Committee on Immunization Practices (ACIP) unanimously voted to recommend CAPVAXIVE for adults age 65 and older who have not received a pneumococcal conjugate vaccine or whose vaccination history is unknown, for adults 19 to 64 with certain risk conditions, and for adults 19 and older who have started their pneumococcal vaccine series with PCV13. Additionally, shared clinical decision-making is recommended for a supplemental dose of CAPVAXIVE for adults over 65 who completed their vaccine series with both PCV13 and PPSV23.

The company also recently announced positive topline results from its Phase 2b/3 trial of clesrovimab (MK-1654), an investigational respiratory syncytial virus (RSV) preventative monoclonal antibody for infants, which met all primary safety and efficacy endpoints.

In cardiometabolic disease, Merck continued to make progress in its launch of WINREVAIR in the U.S. As of the end of June, more than 1,000 patients have received WINREVAIR. The company also announced that the European Union’s (EU) Committee for Medicinal Products for Human Use (CHMP) issued a positive opinion for WINREVAIR. If approved by the European Commission, WINREVAIR will be the first activin signaling inhibitor therapy for pulmonary arterial hypertension (PAH, World Health Organization [WHO] Group 1) to be approved in Europe, offering a new treatment option for certain adults with this rare, progressive disease. Additional worldwide regulatory filings for WINREVAIR are underway.

4 Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments, as well as a $259 million benefit in the second quarter of 2024, due to a reduction in reserves for unrecognized income tax benefits resulting from the expiration of the statute of limitations for assessments related to the 2019 federal tax return year.

In oncology, Merck received FDA approval for KEYTRUDA in combination with chemotherapy, followed by KEYTRUDA as a single agent, for the treatment of certain patients with endometrial carcinoma. This marks the 40th indication for KEYTRUDA in the U.S., reinforcing its importance as a foundational therapy for certain types of cancer.

At the 2024 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting, new data were presented on four approved oncology medicines and four pipeline candidates in more than 25 types of cancer. In collaboration with Moderna, Inc., Merck announced encouraging three-year follow-up data for V940 (mRNA-4157) in combination with KEYTRUDA for the adjuvant treatment of patients with high-risk stage III and IV melanoma following complete resection. In addition, new Phase 3 data from a study conducted in China and independently led by Kelun-Biotech evaluating sacituzumab tirumotecan (MK-2870/SKB264), an investigational anti-TROP2 antibody-drug conjugate being developed by Merck in collaboration with Kelun-Biotech, were presented in previously treated patients with locally recurrent or metastatic TNBC.

Merck Animal Health launched the 12-month injectable formulation of BRAVECTO for use in dogs in a number of markets in Europe for the treatment and persistent killing of fleas (Ctenocephalides felis and Ctenocephalides canis) and ticks (Rhipicephalus sanguineus, Ixodes ricinus, Ixodes hexagonus, and Dermacentor reticulatus). In addition, in July 2024, Merck completed the acquisition of the aqua business of Elanco Animal Health Incorporated.

In July 2024, Merck also completed the acquisition of Eyebiotech Limited (EyeBio), which includes the lead candidate Restoret/MK-3000 that is being evaluated for the treatment of patients with certain retinal diseases, including diabetic macular edema and neovascular age-related macular degeneration, as well as preclinical candidates. And, Merck and Orion Corporation announced the mutual exercise of an option to convert the companies’ ongoing co-development and co-commercialization agreement for opevesostat (MK-5684/ODM-208), an investigational CYP11A1 inhibitor, and other candidates, into an exclusive global license for Merck.

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

Oncology FDA Approved KEYTRUDA Plus Carboplatin and Paclitaxel as Treatment for Adult Patients With Primary Advanced or Recurrent Endometrial Carcinoma, Based on Results From Phase 3 NRG-GY018/KEYNOTE-868 Trial (Read Announcement)
FDA Granted Priority Review to Merck’s Application for KEYTRUDA Plus Chemotherapy as First-Line Treatment of Patients With Unresectable Advanced or Metastatic Malignant Pleural Mesothelioma, Based on Results From Phase 3 KEYNOTE-483 Trial; FDA Set Prescription Drug User Fee Act (PDUFA) Date of Sept. 25, 2024 (Read Announcement)
Merck Received Positive EU CHMP Opinion for KEYTRUDA Plus Padcev as First-Line Treatment for Patients With Unresectable or Metastatic Urothelial Carcinoma, Based on Results From Phase 3 KEYNOTE-A39/EV-302 Trial (Read Announcement)
Moderna and Merck Announced Three-Year Data for mRNA-4157 (V940) in Combination With KEYTRUDA Demonstrated Sustained Improvement in Recurrence-Free Survival and Distant Metastasis-Free Survival Versus KEYTRUDA in Patients With High-Risk Stage III/IV Melanoma Following Complete Resection (Read Announcement)
Merck Announced Phase 3 KEYNOTE-522 Trial Met Its Overall Survival (OS) Endpoint in Patients With High-Risk Early-Stage TNBC (Read Announcement)
Merck Announced Phase 3 KEYNOTE-811 Trial Met Dual Primary Endpoint of OS as First-Line Treatment in Patients With HER2-Positive Advanced Gastric or Gastroesophageal Junction Adenocarcinoma (Read Announcement)
Patritumab Deruxtecan Biologics License Application Submission Received Complete Response Letter From FDA Due to Inspection Findings at Third-Party Manufacturer (Read Announcement)
Vaccines FDA Approved CAPVAXIVE for Prevention of Invasive Pneumococcal Disease and Pneumococcal Pneumonia in Adults, Based on Results From Four Phase 3 Trials (Read Announcement)
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Merck Announced Topline Results From Phase 2b/3 Trial of Clesrovimab (MK-1654), an Investigational RSV Preventative Monoclonal Antibody for Infants, Met All Primary Safety and Efficacy Endpoints (Read Announcement)
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Full-Year 2024 Financial Outlook

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

Full Year 2024
Updated Prior
Sales* $63.4 to $64.4 billion $63.1 to $64.3 billion
Non-GAAP Gross margin2 Approximately 81% Approximately 81%
Non-GAAP Operating expenses2** $26.8 to $27.6 billion $25.2 to $26.1 billion
Non-GAAP Other (income) expense, net2 Approximately $350 million expense Approximately $250 million expense
Non-GAAP Effective tax rate2 15.5% to 16.5% 14.5% to 15.5%
Non-GAAP EPS2*** $7.94 to $8.04 $8.53 to $8.65
Share count (assuming dilution) Approximately 2.54 billion Approximately 2.55 billion

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

**Includes one-time R&D charges of $656 million for Harpoon Therapeutics, Inc. (Harpoon) acquisition and $1.3 billion for EyeBio acquisition. Outlook does not assume any additional significant potential business development transactions.

***Includes one-time charges totaling $0.77 per share for the Harpoon and EyeBio acquisitions.

Merck has not provided a reconciliation of forward-looking non-GAAP gross margin, non-GAAP operating expenses, non-GAAP other (income) expense, net, non-GAAP effective tax rate and non-GAAP EPS to the most directly comparable GAAP measures, given it cannot predict with reasonable certainty the amounts necessary for such a reconciliation, including intangible asset impairment charges, legal settlements, and gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds, without unreasonable effort. These items are inherently difficult to forecast and could have a significant impact on the company’s future GAAP results.

Merck continues to experience strong global demand for key growth products, particularly in oncology, and despite impacts related to the lower sell out of GARDASIL from Zhifei Biological Products Co., Ltd. (the company’s distributor and commercialization partner in China) into the points of vaccination in the market during the quarter, Merck is raising and narrowing its full-year sales outlook.

Merck now expects its full-year sales to be between $63.4 billion and $64.4 billion, including a negative impact of foreign exchange of approximately 3 percentage points, at mid-July 2024 exchange rates. Approximately 2 percentage points of the negative impact of foreign exchange is due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market.

Merck now expects its full-year non-GAAP effective income tax rate to be between 15.5% and 16.5%, which includes an unfavorable impact related to the one-time charge for the acquisition of EyeBio, which is not tax deductible.

Merck now expects its full-year non-GAAP EPS to be between $7.94 and $8.04, including one-time charges of $0.26 and $0.51 per share for the acquisitions of Harpoon and EyeBio, respectively. The outlook includes a negative impact of foreign exchange of more than $0.30 per share. The negative impact of foreign exchange is primarily due to the devaluation of the Argentine peso, which the company expects will largely be offset by inflation-related price increases, consistent with practice in that market. This revised non-GAAP EPS range reflects the following items, which were not previously included in the outlook:

· A charge of $1.3 billion, or $0.51 per share, for the acquisition of EyeBio.

· Estimated 2024 expense of approximately $0.09 per share to be incurred to finance the EyeBio and Elanco aqua business acquisitions and to advance the acquired assets.

Consistent with past practice, the financial outlook does not assume additional significant potential business development transactions.

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

Earnings Conference Call

Investors, journalists and the general public may access a live audio webcast of the earnings conference call on Tuesday, July 30, at 9 a.m. ET via this weblink. A replay of the webcast, along with the sales and earnings news release, supplemental financial disclosures, and slides highlighting the results, will be available at www.merck.com.

All participants may join the call by dialing (800) 779-0641 (U.S. and Canada Toll-Free) or (517) 308-9147 and using the access code 4761229.

On July 30, 2024 Shenzhen Synthetica Pioneering Co., Ltd. (Synthetica), a biotech startup specializing in synthetic biology for engineering novel living bacterial therapeutics, reported that it has recently closed a Series A funding round, led by Boehringer Ingelheim Venture Fund and Temasek, with additional participation from Lenovo Capital, Fosun Health Capital and ATLATL Summer Fund (Press release, Shenzhen Synthetica Pioneering, JUL 30, 2024, View Source [SID1234645183]). The funding will be used to fast-track Synthetica’s oncolytic bacterial pipelines into clinical trials.

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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

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Headquartered in Shenzhen, China, Synthetica is a biotech company founded in 2023, specializing in genetic circuit engineering and precise control of genes and payloads to treat various diseases. Synthetica is currently focused on developing oncolytic bacterial therapies for treating solid tumors. With a deep understanding of biological mechanisms and advanced synthetic biology techniques, Synthetica is aiming to create innovative bacterial treatments that are safe, effective, versatile, and minimally invasive to fight cancer.

Synthetica’s CEO, Yingke He stated: "Securing this funding marks a pivotal moment for our young company as we advance the frontier of cancer treatment. Our innovative synthetic biology approach to developing oncolytic bacteria offers new hope for more effective and targeted therapies. We extend our heartfelt thanks to our technology contributors and financial investors for their trust and support. Together we will drive this breakthrough science forward, and make significant advancements in the fight against cancer, bringing us closer to transforming patients’ lives worldwide."

Dr. Mia Hu, Investment Director, Boehringer Ingelheim Venture Fund, commented: "Boehringer Ingelheim Venture Fund (BIVF) is committed to invest in innovative therapeutics that address unmet patient needs. Oncolytic bacterial therapy remains a key strategic focus for the Boehringer Ingelheim Venture Fund. The Synthetica team, with its years of expertise in quantitative synthetic biology, is pioneering the development of innovative bacterial therapies for various indications. We are thrilled to support Synthetica in their ongoing efforts to advance next-generation bacterial therapies for the treatment of solid tumors, with the ultimate goal of transforming the lives of more people living with cancer."

On July 30, 2024 Aileron Therapeutics, Inc. ("Aileron") (NASDAQ: ALRN), a biopharmaceutical company advancing a novel pipeline of first-in-class medicines to address significant unmet medical needs in orphan pulmonary and fibrosis indications, reported that Brian Windsor, Ph.D., President and Chief Executive Officer, will present at the Canaccord Genuity 44th Annual Growth Conference on Tuesday, August 13, 2024 at 4:00 p.m. EDT in Boston, MA (Press release, Aileron Therapeutics, JUL 30, 2024, View Source [SID1234645146]).

Schedule your 30 min Free 1stOncology Demo!
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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

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A live webcast of the event can be accessed at View Source A replay of the webcast will be available for 90 days following the presentation.

On July 30, 2024 Outlook Therapeutics, Inc. (Nasdaq: OTLK), a biopharmaceutical company focused on development and commercialization of ONS-5010/LYTENAVA (bevacizumab-vikg; bevacizumab gamma) for the treatment of retina diseases, reported that Russell Trenary, President and Chief Executive Officer of Outlook Therapeutics will participate in a fireside chat at the BTIG Virtual Biotechnology Conference 2024 on Monday, August 5, 2024 at 8:00 AM ET (Press release, Outlook Therapeutics, JUL 30, 2024, View Source [SID1234645166]).

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

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In addition to the fireside chat, management will be available to participate in virtual one-on-one meetings with qualified members of the investor community who are registered to attend the conference. If you are interested in scheduling a meeting with Outlook Therapeutics during the conference, please reach out to your BTIG representative.