1、Acquisition of Prometheus BiosciencesApril 17,2023Agenda2Rob DavisChairman&Chief Executive OfficerCaroline LitchfieldChief Financial OfficerStrategic Rationale|Rob DavisScientific Overview|Dean LiClinical Profile|Eliav BarrCommercial Opportunity|Chirfi GuindoFinancial Overview|Caroline LitchfieldQ&A

2、Dr.Eliav BarrSVP,Head of Global Clinical Development&Chief Medical OfficerChirfi GuindoChief Marketing Officer Human HealthDr.Dean LiPresident,Merck Research LaboratoriesImportant Information About the Transaction3Merck&Co.,Inc.(“Merck”),through a subsidiary,has agreed to acquire Prometheus Bioscien

3、ces,Inc.(“Prometheus Biosciences”).The acquisition is subject to Prometheus Biosciences shareholder approval.The closing of the transaction will be subject to certain conditions,including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary

4、conditions.A copy of the merger agreement pursuant to the transaction will be filed with the Securities and Exchange Commission(“SEC”)and will be publicly available.In addition,Merck and Prometheus Biosciences file annual,quarterly and current reports and other information with the SEC,which are ava

5、ilable to the public from commercial document-retrieval services and at the SECs website at www.sec.gov.Copies of the documents filed with the SEC by Merck may be obtained at no charge on Mercks internet website at or by contacting Merck at 2025 E Scott Ave,Rahway,N.J.07033 or(908)423-1000.Copies of

6、 the documents filed with the SEC by Prometheus Biosciences may be obtained at no charge on Prometheus Biosciences internet website at or by contacting Prometheus Biosciences at 3050 Science Park Rd,San Diego,C.A.92037 or(858)824-0895.Forward-looking statement of Merck&Co.,Inc.,Rahway,N.J.,USA4This

7、presentation of Merck&Co.,Inc.,Rahway,N.J.,USA(the“company”)includes“forward-looking statements”within the meaning of the safe harbor provisions of the U.S.Private Securities Litigation Reform Act of 1995.These statements are based upon the current beliefs and expectations of the companys management

8、 and are subject to significant risks and uncertainties.There can be no guarantees with respect to pipeline candidates that the candidates will receive the necessary regulatory approvals or that they will prove to be commercially successful.If underlying assumptions prove inaccurate or risks or unce

9、rtainties materialize,actual results may differ materially from those set forth in the forward-looking statements.Risks and uncertainties include but are not limited to,general industry conditions and competition;general economic factors,including interest rate and currency exchange rate fluctuation

10、s;the impact of the global outbreak of novel coronavirus disease(COVID-19);the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally;global trends toward health care cost containment;technological advances,new products and patents attained

11、by competitors;challenges inherent in new product development,including obtaining regulatory approval;the companys ability to accurately predict future market conditions;manufacturing difficulties or delays;financial instability of international economies and sovereign risk;dependence on the effecti

12、veness of the companys patents and other protections for innovative products;and the exposure to litigation,including patent litigation,and/or regulatory actions.The company undertakes no obligation to publicly update any forward-looking statement,whether as a result of new information,future events

13、 or otherwise.Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the companys Annual Report on Form 10-K for the year ended December 31,2022 and the companys other filings with the Securities and Exchange Commission

14、(SEC)available at the SECs Internet site(www.sec.gov).Strategic RationaleRob DavisChairman&Chief Executive Officer6Merck continues to advance science-led strategy through acquisition of Prometheus Biosciences 6Potentially transformational,first-in-class,late-stage candidate,in a disease area with si

15、gnificant unmet medical need+$200 cash per Prometheus share,representing total transaction value of approximately$10.8B,expected to close in 3Q 2023Opportunity to potentially transform standard of care for certain patients suffering from debilitating autoimmune diseases through precision medicine ap

16、proach Multi-billion dollar commercial opportunity with potential to drive long-term revenue and earnings growth well into the next decadeDiversifies portfolio and enhances our sustainable innovation engineScientific OverviewDr.Dean LiPresident,Merck Research Laboratories8Prometheus is well-aligned

17、to Mercks R&D strategyTranslating breakthrough science into medicines and vaccinesthat save and improve livesPrometheus augments and accelerates Mercks research efforts in immunology Advancing novel mechanisms Transforming standard of care Leveraging precision medicine IBD is a devastating disease i

18、n need of new treatment options for patients9Prevalence increasing globallyMajor quality of life impactsElevated risk of colon cancer Increased risk of hospitalizationDisease progression often leads to surgery 5-amino-salicyclic acid(5-ASA)CorticosteroidsTumor Necrosis Factor(TNF)Anti-IL23sAnti-inte

19、grinsJanus Kinase Inhibitor(JAKi)Sphingosine-1-Phosphate Receptor Modulator(S1P Modulator)Patients often cycle through existing therapies due to sub-optimal response and poor tolerabilityPrometheus complements and accelerates Mercks immunology presence10Focused expertise in immunologyDeep genetic an

20、d biological insights from Prometheus 360 Data Science PlatformRisk-stratified biomarker approachSuite of immunology pipeline compoundsDeep expertise in clinical trial design and executionGlobal clinical trial scaleProven track record of developing and implementing precision medicine strategiesEmerg

21、ing immunology discovery pipeline+Clinical ProfileDr.Eliav BarrSVP,Head of Global Clinical Development&Chief Medical OfficerPRA023 has potential to be the first and best TL1A inhibitor 12TL1A has strong genetic association to both UC and CDPRA023 is a potential first and best-in-class TL1A with a du

22、al mechanism of action (anti-inflammatory and anti-fibrotic)In Phase 2a:Outstanding efficacy Favorable safety and tolerability profilePrecision approach to treating IBD with a proprietary biomarkerARTEMIS-UC Phase 2 study design13PRA023(N=60)Placebo(N=60)Randomization:Dx status(+/-)Prior biologic(y/

23、n)Day 1 1000 mg IVWeek 2 500 mg IVWeek 6 500 mg IVWeek 10 500 mg IVWeek 12EndoscopyOpen Label ExtensionInduction Primary EndpointKey Inclusion CriteriaModerately to severely active UCNo/insufficient response and/or intolerance to conventional or advanced therapyPrimary Endpoint Clinical remission at

24、 week 12 by 3 component Modified Mayo ScoreSecondary Endpoints(-controlled)Endoscopic improvement;clinical response;symptomatic remission;mucosal healing;histologic improvement;histologic-endoscopic mucosal improvement;IBDQ responseCohort 1:Evaluation of efficacy in all comers PRA023(N=per interim a

25、nalysis/DMC(40)Placebo(N=per interim analysis/DMC(40)Randomization:Prior biologic(y/n)Day 1 1000 mg IVWeek 2 500 mg IVWeek 6 500 mg IVWeek 10 500 mg IVWeek 12EndoscopyOpen Label ExtensionInduction Primary EndpointKey Inclusion CriteriaAs in Cohort 1Must also be Dx+Cohort 2:Evaluation of efficacy in

26、biomarker(+)subjects 26.5%36.8%66.2%1.5%6.0%22.4%Clinical Remission(PrimaryEndpoint)Endoscopic Improvement(Secondary Endpoint)Clinical Response(SecondaryEndpoint)Subjects Achieving Endpoint(%)ARTEMIS-UC Primary and Key Secondary Endpoints with PRA023 Treatment Compared to Placebo at Week 12PRA023(N=

27、68)Placebo(N=67)ARTEMIS-UC Phase 2 study showed strong efficacy across primary and secondary endpoints14.25.0%30.8%43.8%12 weeks of PRA023 induction treatment led to statistically significant increases in clinical remission,endoscopic improvement and clinical response compared to placebo in patients

28、 with active UC25.0%placebo-adjusted clinical remission(p0.001)30.8%placebo-adjusted endoscopic improvement(p0.001)43.8%placebo-adjusted clinical response(p0.001)No safety concerns identifiedAPOLLO-CD Phase 2a study design15Day 11000 mg IVWeek 5ScreeningInduction Primary EndpointWeek 2500 mg IVWeek

29、6500 mg IVWeek 10500 mg IVWeek 12Non-Responders:TerminationRandomization 1:1PRA023 250mg IV Q4WPRA023 100mg IV Q4WResponders:(decrease in CDAI of 100 points or CDAI 150)Key Inclusion CriteriaModerately to severely active CD by CDAIEndoscopically active disease by SES-CD(4 points for isolated ileal d

30、isease;otherwise,6 points)No/insufficient response and/or intolerance to conventional or biologic therapy(capped biologic-exposed stratum at 70%)Secondary:Clinical remission at Week 12Clinical response at Week 12Endoscopic and clinical improvement at Week 12Biomarker and clinical improvement at Week

31、 12Normalization of C-reactive protein among subjects with elevated concentrations at baseline,at Week 12Normalization of fecal calprotectin among subjects with elevated concentrations at baseline,at Week 12ObjectivesPrimary:Safety and tolerabilityEndoscopic response at Week 12Induction(N=55)Open La

32、bel ExtensionPhase 2a,Multi-Center,Open-Label Study to Evaluate the Safety,Efficacy,and Pharmacokinetics of PRA023 in Subjects with Moderately to Severely Active Crohns Disease 1626.0%of patients on PRA023 achieved endoscopic response(p=0.002 compared to 12%prespecified historical placebo rate)49.1%

33、of patients on PRA023 achieved clinical remission(p0.001 compared to 16%prespecified historical placebo rate)APOLLO-CD Phase 2a study showed strong efficacy across primary and secondary endpoints12 weeks of PRA023 induction treatment led to statistically significant increases in clinical and endosco

34、pic endpoints compared to historical placebo rates in patients with active CD14.0%placebo-adjusted endoscopic improvement(p=0.002)in biomarker(+)population33.1%placebo-adjusted clinical remission(p0.001)in all comers population No safety concerns identified14.0%33.1%Endoscopic Response(Primary Endpo

35、int)Clinical Remission(Secondary Endpoint)Proportion of Subjects(%)APOLLO-CD Primary and Key Secondary Endpoints with PRA023 Treatment at Week 12(placebo-adjusted basis using historical controls)17.Phase 2 PRA023 data suggests UC and CD remission rates comparable or superior to available therapies,o

36、n a cross-trial comparison basis Phase 2 PRA023 induction efficacy comparable or superior to leading approved agentsCombination of safety and efficacy in UC and CD Phase 2 studiesSafety profile in-line with safest approved agents on the market,whereas JAKi class has a black box warning for risk of f

37、atal cardiovascular events8%12%11%12%*12%25%*14%25%24%*8%21%19%*20%33%Induction Clinical Remission Rate(Placebo Adjusted)UCCD*JAKi class has a black box warning for risk of fatal cardiovascular events*Tested in largely biologic-nave patients,which can inflate efficacy numbers Data from comparators c

38、ome from respective Phase 3 trials graphic is not meant to represent a head-to-head study25.0%37.5%21.2%UC%of subjects achieving clinical remission(placebo adjusred)Biomarker(+)vs All Comers in UCClinical Remission Induction PhaseAll comersBiomarker(+)Biomarker(-)18ARTEMIS-UC:n=135(67 on PBO,68 on a

39、ctive)ARTEMIS-UC in biomarker(+):n=32(16 on PBO,16 on active)UC biomarker(+)population performance:Biomarker(+)population prevalence was 24%Interim data suggest it identifies a population with greater clinical remission rate by an additional 12.5%Cohort 2 data(patients must be biomarker(+)expected 2

40、Q 2023Interim analysis showed clinical remission in biomarker positive sub-population in UC+12.5%Continued progress across PRA023 program19Maintenance StudiesPhase 3 Development PlansMaintenance portion of the Phase 2 ARTEMIS-UC and APOLLO-CD studies ongoingEarly data to date are encouraging Product

41、ive End of Phase 2 meeting with FDALook forward to initiating Phase 3 development programStatusPrometheus is highly complementary to and strengthens existing immunology portfolio and pipeline20Phase 1ongoingIL-2 muteinVitiligo,Alopecia Areata,SLE,AtDMechanism of ActionIndicationMK-6194Phase 2 comple

42、teanti-TL1A mAbUlcerative Colitis,Crohns Disease,SSc-ILDPRA023Phase 1ongoinganti-CD30 ligand mAbImmune-Mediated DiseasesPRA052Seeking to expand assets into additional indicationsMultiple preclinical development assets across both companies expected to enter the clinic in the coming yearsPrometheus 3

43、60 Data Science Platform enables link between genetics and biology for precision drug discovery and patient stratificationTimingPhase 2 expected to start in 2023Plan to initiate Phase 3 UC trial by early 2024 Phase 1 data expected in 2023Commercial OpportunityChirfi GuindoChief Marketing Officer,Hum

44、an HealthSignificant unmet medical need remains in IBD22IBD is a chronic,IBD is a chronic,inflammatory and inflammatory and debilitating conditiondebilitating conditionApproximately 2 million patients in the U.S.have been diagnosed with UC and CD,of which nearly 1 million have moderate to severe dis

45、easeUC and CD can be devastating diseases with adverse impacts on patients physical,social and emotional well-beingPhysicians typically cycle patients through multiple therapeutic classes and are challenged in identifying optimal treatmentsPayers recognize the need for more effective treatment optio

46、nsPRA023 represents a potentially meaningful and durable commercial opportunity23IBD Market OpportunityImmunology market is expected to surpass$140 billion by 20281UC and CD market was$23 billion in 2022,and is expected to grow to$28 billion by 20281Opportunity for market expansion with introduction

47、 of new options that have potential to improve short-and long-term clinical outcomesPRA023 OpportunityUC and CD indications each have potential formulti-billion dollar peak salesPatent exclusivity in the U.S.extends into 2040sPotential for additional indications and other immune-mediated diseases1 B

48、ased on Evaluate PharmaFinancial OverviewCaroline LitchfieldChief Financial OfficerFinancial overview of the Prometheus Biosciences acquisition25Transaction DetailsMerck has agreed to acquire all outstanding shares of Prometheus Biosciences for a purchase price of$200 per shareTotal transaction valu

49、e of$10.8 billion($10.3 billion net of$650 million of cash and investments,as well as other transaction costs)Flexibility to finance the transaction through cash,commercial paper or opportunistic new debt issuanceExpected to close in 3Q 2023,subject to Prometheus shareholder approval and regulatory

50、approvalsFinancial ImpactImportant potential growth driver through the next decade Expected to negatively impact EPS by$0.25 in the first 12 months,representing costs associated with the investment in pipeline assets and assumed cost of financing Expected to be accounted for as an asset acquisition,

51、resulting in the net purchase price increasing 2023 research and development expense by$10.3 billion or$4.00 per share,included in GAAP and non-GAAP results Not expected to impact credit rating Capital Allocation Priorities Retain significant capacity within strong investment-grade credit rating to

52、pursue additional business development dealsRemain committed to funding and growing dividend over timeContinue to expect modest share repurchasesRoyalty StructureLow-to-mid single digit royalty on future sales owed to Cedars-SinaiQ&A26Peter DannenbaumVP,Investor RelationsDr.Aileen PanganVP,Late-Stag

53、e ImmunologyChirfi GuindoChief Marketing Officer,Human HealthDr.Dean LiPresident,Merck Research LaboratoriesDr.Eliav BarrSVP,Head of Global Clinical Development&Chief Medical OfficerRob DavisChairman&Chief Executive OfficerCaroline LitchfieldChief Financial OfficerAppendixEliav Barr,M.D.Senior Vice

54、PresidentHead of Global Clinical Development,Chief Medical OfficerEliav Barr is senior vice president and head of Global Clinical Development and Chief Medical Officer at Merck Research Laboratories(MRL).He leads all late-stage clinical development for Mercks human health portfolio and pipeline.Prio

55、r to his current role,Eliav led MRLs Global Medical Affairs organization expanding Mercks scientific engagement and implementation efforts in oncology,vaccines and infectious diseases.Since joining Merck in 1995,Eliav has held positions of increasing responsibility including leadership roles in onco

56、logy and infectious diseases clinical development.He was also previously Therapeutic Area Head for Infectious Diseases and managed product development teams in Oncology and Infectious Disease.Eliav is a cardiologist by training.He received his undergraduate degree from Penn State University and his

57、medical degree from Thomas Jefferson University.He completed his Internal Medicine residency and Cardiology Fellowship at Johns Hopkins University,and subsequently pursued post-doctoral training at the University of Michigan.Prior to joining Merck,he held a faculty position at the University of Chic

58、ago.Chirfi GuindoChief Marketing Officer,Human HealthChirfi Guindo is chief marketing officer for Merck.He is responsible for leading the development and implementation of the companys long-term strategy for the Human Health portfolio spanning oncology,vaccines,pharmaceutical and pipeline products.P

59、rior to this role,Chirfi was executive vice president and head of global product strategy and commercialization at Biogen.Before joining Biogen in 2017,Chirfi spent more than 25 years with Merck in positions of increasing responsibility in finance,sales,commercial and marketing.During his time with

60、Merck,he led global marketing for Mercks HIV portfolio,and also led the companys Human Health businesses in Canada,the Netherlands and South Africa.Chirfi has been recognized for developing strong talent and forging innovative public-private partnerships that expand access to Merck medicines,while e

61、levating the profile of Merck as a patient-focused company.Chirfi is a graduate of Ecole Centrale de Paris(France)with a degree in engineering and has a masters of Business Administration from New York Universitys Stern School of Business.Aileen Pangan,M.D.Vice PresidentLate-Stage Immunology Aileen

62、L.Pangan,M.D.is vice president of Global Clinical Development of Late-Stage Immunology.Aileen is a rheumatologist with 17 years of experience leading cross-functional teams through design and execution of clinical trials.She joined Merck from AbbVie,where she held positions of increasing responsibil

63、ity,including as Executive Medical Director,Immunology Clinical Development,where she led the development teams for HUMIRA and RINVOQ through regulatory approval and commercialization.In this role,she also chaired the integrated Evidence Strategy Team,whose remit was to develop and provide oversight

64、 of an integrated evidence plan to maximize asset value and provided strategic guidance in dossier preparation and leadership in regulatory agency interactions for Rheumatoid Arthritis(RA),Psoriatic Arthritis(PsA),Ankylosing Spondylitis(AS)and Atopic Dermatitis(AD),and Ulcerative Colitis(UC).Prior t

65、o working at AbbVie,Aileen was an Assistant Professor of Medicine,Rheumatology at the Loyola University Medical Center.She obtained her B.S.and M.D.at the Philippines College of Medicine,Manila,Philippines,completed her residency in Internal Medicine at the Rush University Medical Center in Chicago

66、and was a Clinical and Research Fellow in Rheumatology at Massachusetts General Hospital/Harvard Medical School.AcronymsAtD=Atopic dermatitisCD=Crohns diseaseIBD=Inflammatory bowel diseaseJAKi=Janus kinase inhibitormAb=Monoclonal antibodyPBO=PlaceboPCD=Primary completion dateSLE=Systemic lupus erythematosusSNP=Single nucleotide polymorphismSSc-ILD=Systemic sclerosis-associated interstitial lung diseaseTL1A=Tumor necrosis factor-like ligand 1A UC=Ulcerative colitis