Welcome to the 2007 Annual Meeting of Stockholders

Transcription

1 Welcome to the 2007 Annual Meeting of Stockholders

2 Forward-Looking Statement This presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential or financial performance. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this presentation should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2006, and in its periodic reports on Form 10-Q and Form 8-K, which the Company incorporates by reference.

3 No Duty to Update The information contained in the presentations that follows was current as of April 24, 2007 (unless otherwise noted). While these presentations remain on the company s website the company assumes no duty to update the information to reflect subsequent developments. Consequently, the company will not update the information contained in these presentations and investors should not rely upon the information as current or accurate after April 24, 2007.

4 Welcome to the 2007 Annual Meeting of Stockholders

5 Richard T. Clark Chairman, President and Chief Executive Officer

6 Financial Results 2006 results showed solid revenue growth earnings per share of $2.52, excluding restructuring charges and other one-time items. Reported EPS for 2006 were $2.03. Sales growth of such products as SINGULAIR and joint venture products VYTORIN and ZETIA helped drive results.

7 Financial Outlook for 2007 and Beyond EPS for 1Q 2007 were $.84, excluding restructuring charges. Reported 1Q 2007 EPS were $.78. Raised projected full-year 2007 EPS to between $2.75 and $2.85, excluding restructuring charges, and reported 2007 EPS to between $2.60 and $2.75. Merck remains on track to deliver double-digit compound annual earnings-per-share growth, excluding charges and one-time items, by 2010 from 2005.

8 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006:

9 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006: GARDASIL, to help prevent cervical cancer.

10 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006: GARDASIL, to help prevent cervical cancer. JANUVIA, for treatment of type 2 diabetes.

11 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006: GARDASIL, to help prevent cervical cancer. JANUVIA, for treatment of type 2 diabetes. ZOSTAVAX, to help prevent shingles.

12 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006: GARDASIL, to help prevent cervical cancer. JANUVIA, for treatment of type 2 diabetes. ZOSTAVAX, to help prevent shingles. ZOLINZA, for treatment of a type of cancer known as CTCL.

13 Breakthrough Products Launched in 2006 Merck launched five novel medicines and vaccines in 2006: GARDASIL, to help prevent cervical cancer. JANUVIA, for treatment of type 2 diabetes. ZOSTAVAX, to help prevent shingles. ZOLINZA, for treatment of a type of cancer known as CTCL. ROTATEQ, to help prevent rotavirus gastroenteritis.

14 Merck s Late-Stage Pipeline Received U.S. Food and Drug Administration approval for JANUMET, for treatment of type 2 diabetes. EMEND For Injection, to help reduce nausea and vomiting from chemotherapy, is under FDA review. Two additional 2007 FDA filings are expected: ISENTRESS, a first-in-class treatment for HIV. ER Niacin with MK-0524, to manage total lipid profile.

15 Achieving Our Goal Our goal is to make Merck the most trusted leader in the industry in delivering value to customers by: Advancing our pipeline. Using end-to-end lifecycle management. Executing an industry-leading commercial model. Creating a lean and flexible business model. Creating a high-performance organization.

16 Update on Merck s Plan to Win Advancing our pipeline: Exceeded prior goal and reduced late-development cycle-time by 10 months. Accelerated launches of JANUVIA and JANUMET. Continued to identify partnership opportunities that complement our internal efforts. 50 licensing transactions completed in Acquired three biotech companies: Sirna Therapeutics, Inc. GlycoFi, Inc. Abmaxis, Inc.

17 Update on Merck s Plan to Win Using end-to-end lifecycle management: Aligned R&D efforts and commercial operations to ensure customer needs drive key decisions. Established global commercial franchises to manage our products in key therapeutic areas. Allocating resources across therapeutic areas and geographies to strategically balance risk and return.

18 Update on Merck s Plan to Win Executing an industry-leading commercial model: New product launches have exceeded expectations. Launched our five newest products without any increase in the number of our professional representatives. Developing more efficient and effective ways of reaching our customers.

19 Update on Merck s Plan to Win Creating a lean and flexible business: Achieved significant procurement savings. Closed or sold excess facilities. Reduced inventory by millions of dollars. Making Merck a Six Sigma company. Implemented a new product supply process.

20 Update on Merck s Plan to Win Creating a high-performance organization: Establishing new leadership standards at every level. Developing a new compensation strategy. Putting into place new decision-making and governance structures.

21 Continued Commitment to Corporate Responsibility U.S. Vaccine Patient Assistance Program. Partnership with Nicaragua on ROTATEQ. Further reduced, no-profit price for STOCRIN in least developed countries. Registration of ATRIPLA in 50+ developing countries. 50 th anniversary of The Merck Company Foundation. 20 th anniversary of Mectizan Donation Program.

22 Delivering on the Promise We remain committed to achieving Merck s goals. Success of 2006 shows we are on the right course to win back our position as a leader in this important industry. We will continue to ensure that Merck fully realizes its potential.

23 Peter S. Kim President, Merck Research Laboratories

24 Outline Late Stage Pipeline Review Leveraging new technologies and acquisitions Pipeline Overview

25 Merck s Late-Stage Development Pipeline 2007 Phase III 2007 Anticipated Filings 2006/2007 Under Review 2006/2007 Approvals MK-0524B Atherosclerosis MK-0364 Obesity MK-0974 Migraine MK-0822* Osteoporosis MK-0518 HIV MK-0524A Atherosclerosis MK-0517 CINV ARCOXIA Arthritis (Response to Approvable) ROTATEQ Infant Gastroenteritis ZOSTAVAX Shingles GARDASIL Cervical Cancer ZOLINZA Cancer, CTCL JANUVIA Diabetes JANUMET Diabetes * Anticipated

26 Merck Vaccines: Over a century of commitment First commercial diphtheria serum Measles Mumps GARDASIL ZOSTAVAX Rubella ROTATEQ MMR Pneumococcal Measles, mumps, rubella, varicella Haemophilus b/hepatitis B Haemophilus b (liquid) Hepatitis A Varicella virus Haemophilus b Hepatitis B (recombinant) Pneumococcal (polyvalent) Hepatitis B Measles, mumps, rubella (MMRII) Merck: A World Leader in Vaccines. Merck & Co Inc. 2005; 1 12.

27 Approvals in 2006: Three New Vaccines and Two New Drugs

28 JANUMET : Approved by the FDA April, 2007 Combination Therapy Provides Powerful Glucose Control JANUMET is the first and only tablet combining sitagliptin (JANUVIA) and metformin Metformin is commonly used in type 2 diabetes JANUMET provides significantly greater blood sugar lowering than metformin alone In clinical studies, more than twice as many patients achieved their therapeutic goal with combination therapy JANUMET targets all three key defects of type 2 diabetes Uncontrolled glucose production Insulin resistance Lowered insulin release

29 MK-0518, ISENTRESS, A Novel First-in-Class Treatment for HIV Infection MK-0518 uses a new mechanism approach to treating HIV inhibits HIV integrase enzyme MK-0518 is efficacious in salvage patients Patients with HIV resistant to at least one drug in each of three available classes of oral antiretroviral drugs FDA action expected by the end of 2007 MK-0518 is efficacious in treatment-naïve patients Phase III program ongoing Expanded access program initiated in August 2006

30 MK-0524A A Novel Approach to Lipid Management Niacin has proven cardiovascular benefits Limited use due to problematic flushing side-effect MK-0524A: a combination of a novel flushing pathway inhibitor and extended-release niacin MK-0524A increases HDL cholesterol, decreases LDL cholesterol, and decreases triglycerides Phase III program ongoing On target for FDA submission in 2007

31 Leveraging New Technologies and Acquisitions Sirna (acquired in Dec 2006) Expanding Merck s genomics capabilities GlycoFi (June 2006) and Abmaxis (May 2006) Building on Merck s experience in vaccines and biologics

32 Sirna Therapeutics, Inc. Builds on Merck s Experience in Genomics Sirna is the first company to enter human clinical trials with an optimized sirna and demonstrate biological activity of an sirna in humans The acquisition of Sirna complements Merck s internal research capabilities in genomics

33 GlycoFi, Inc. and Abmaxis Build on Merck s Experience in Vaccines and Biologics GlycoFi: Novel yeast-based technology Genetically-modified humanized yeast production of proteins and antibodies Abmaxis: Antibody technology Building proprietary libraries of antibodies Combined, these technologies provide Merck with lead generation through manufacturing capabilities

34 Merck s Late-Stage Development Pipeline 2007 Phase III 2007 Anticipated Filings 2006/2007 Under Review 2006/2007 Approvals MK-0524B Atherosclerosis MK-0364 Obesity MK-0974 Migraine MK-0822* Osteoporosis MK-0518 HIV MK-0524A Atherosclerosis MK-0517 CINV ARCOXIA Arthritis (Response to Approvable) ROTATEQ Infant Gastroenteritis ZOSTAVAX Shingles GARDASIL Cervical Cancer ZOLINZA Cancer, CTCL JANUVIA Diabetes * Anticipated JANUMET Diabetes

35 Merck Early-Stage Pipeline February 15, 2007 Phase I Phase I Phase II Phase II Alzheimer s Dis, MK-0952 Glaucoma, MK-0994 Alzheimer s Dis., MK-0249 Migraine, MK-0974 Atherosclerosis, MK-6213 Infect. Dis., MK-0608 Arthritis, MK-0822 Osteoporosis, MK-0822 Cancer, MK-0429 Infect. Dis., MK-7009 Atherosclerosis, MK-0859 Overactive Bladder MK-0634 Cancer, MK-0646 Infect. Dis., MK-8122 Atherosclerosis, MK-0633 Overactive Bladder MK-0594 Cancer, MK-0731 Infect. Dis. (S. aureus), V710 Cancer, MK-0457 Pain, MK-0759 Cancer, MK-0752 Infect. Dis. (Flu), V512 Cancer, MK-0822 Pain, MK-6721 Cancer, MK-4721 Insomnia, MK-0454 Diabetes, MK-0533 Pain, MK-2295** Cancer, V930 Insomnia, MK-8998 Endocrine, MK-0677 Respiratory Dis., MK-0633 Cardiovascular, MK-0448 Osteoporosis, MK-0773 HIV, V526 Stroke, MK-0724 Cardiovascular, MK-8141 Parkinson s Dis, MK-0657 HPV, V502* Diabetes, MK-0941 Psychiatric Dis., MK-2637 Infect. Dis. (Pediatric) V419 Diabetes, MK-0893 Psychiatric Dis., MK-0249 Diabetes, MK-1642 Diabetes, MK-3887 Endocrine, MK-0867 Psychiatric Dis., MK-5757 Phase I and II - The most advanced compound with a specific mechanism in a given therapeutic area Endocrine, MK-0974 Licensed, alliance, or acquisition (Pipeline) *Multiple Licenses, including CSL, Ltd. ** Proof-of-Concept Molecule Advanced since February, 2006 Not included - Back-up compounds, regardless of their phase of development - Additional indications in the same therapeutic area - Additional claims for in-line products, line extensions, or formulations 35

36 Summary Six product approvals in 2006/2007 Robust late-stage pipeline Leveraging new technologies and acquisitions Strong early pipeline to support long-term growth

37 2007 Annual Meeting of Stockholders

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