Merck & Co. (MRK) Q1 FY26 earnings call: guidance and Q&A

How is Merck thinking about MK-3000 dosing frequency, given the 1-year BRUNELLO data and Lucentis comparison? Are other dosing intervals being considered beyond every 4 weeks?

Dean Li stated that while the initial focus for MK-3000 is on every 4-week dosing to secure it in the label, other frequencies are absolutely being considered. He also highlighted the excitement around MK-8748, another novel bispecific in Phase IIb/III for retinal vascular disease.

“So we believe that one should focus on Q4 weeks, but one should not only focus on Q4 weeks. So your question, which I think alludes to, are we considering other frequencies, the answer is absolutely yes.”

asked by Carter Gould · answered by Dean Li

Does the LITESPARK-012 study's failure to meet endpoints have concerning read-throughs for ongoing LITESPARK-022 and other frontline WELIREG studies?

Dean Li expressed bullishness on the upcoming LITESPARK-022 and -011 readouts, which have PDUFA dates in June and October. He cautioned against drawing negative implications from the LITESPARK-012 trial, which involved a three-agent combination, to other trials with different combinations (e.g., VEGF TKI and WELIREG, or PD-1 and WELIREG).

“I would be very cautious to sit there and say that has any negative implication to other trials where, for example, we have a VEGF TKI and WELIREG or a PD-1 and WELIREG.”

asked by Jason Gerberry · answered by Dean Li

Given Merck's recent BD activity, where are the biggest portfolio gaps, what's the sweet spot for deal size, and will the importance of BD diminish with growing confidence in the existing portfolio?

Rob Davis stated that Merck remains confident in its existing assets and pipeline but will continue to pursue BD. The focus is on compelling science addressing unmet needs, not specific therapeutic areas first. The sweet spot for deal size is $1 billion to $15 billion, but Merck has the capacity for larger strategic deals. He emphasized that BD will remain an ongoing part of the strategy, as the company always seeks to grow stronger.

“My view is we can always do better. We can always grow stronger. And if we have the capacity, we will continue to invest. As Dean has said, we think in terms of one pipeline, whether it's internal or external. And so that mix of internal plus external will be an ongoing part of our strategy, you will not see that change.”

asked by Asad Haider · answered by Robert Davis

Can Merck provide an update on FDA discussions for WINREVAIR's Phase II CADENCE program, particularly regarding the clinical worsening endpoint for Phase III, and the estimated timeline for a Phase III in this indication?

Dean Li highlighted the significant unmet need in the PH-HFpEF patient population, which is distinct from PAH. He stressed that while PVR reduction is important, the focus for FDA discussions and KOLs is on compelling endpoints like time to clinical worsening. He noted that defining inclusion criteria and operationalizing the trial for this orphan patient population are key discussion points with the FDA.

“And that's where we will be having our discussions with the FDA. I think the other one that will be important is defining the inclusion criteria in relationship with the FDA and also the broader community in relationship to how do you actually operationalize the clinical trial, but also for everyone to be very clear that in our minds, this is a patient population that is an orphan patient population.”

asked by Vamil Divan · answered by Dean Li

Regarding the Terns deal, incremental patient data suggests a lower MMR achievement rate for TERN-701. How does this impact Merck's view of the drug's profile, especially for early launch target populations?

Dean Li clarified that while early public data might be presented differently, Merck evaluates data conservatively for registration. He stated that based on specific patient-level data, Merck believes the MMR (Major Molecular Response) for TERN-701 will be north of 50%, which is considered extremely compelling. He also emphasized the potential for DMR (Deep Molecular Response) as a treatment goal.

“we believe that the MMR will be north of 50%. And within the confidence interval as had been publicly stated. And we think that in MMR in that sort of range is extremely compelling.”

asked by Umer Raffat · answered by Dean Li

Can Merck distinguish MK-6837 from SAC-TMT? Also, is there a view that TL1A could stand alone in immunology, or is a portfolio-driven strategy necessary?

Dean Li stated that MK-6837, another ADC with a unique payload, has been discontinued, especially given the profound impact of SAC-TMT. Regarding TL1A, he affirmed that while Merck is focused on it as a potential first-in-class TO1A, the ambition is to use it as a 'beachhead' to expand into other conditions and explore combinations, not to stop there. Rob Davis added that Merck has other immunology assets in its 'invisible pipeline' moving into Phase I.

“We're very focused on TL1A, but if you ask me is TL1A is our ambition to stop at TL1A, -- would we use TL1A as a beach at to expand and extend. The answer is we would undoubtedly move it to expand and to extend.”

asked by James Shin · answered by Dean Li

Given IDVYNSO's recent approval, how does Merck view the competitive landscape in HIV, and what is the strategic priority of HIV and infectious disease within the overall BD strategy?

Dean Li expressed profound interest in Merck's HIV program, highlighting IDVYNSO as the first 2-drug daily regimen without an integrase strand transfer inhibitor. He emphasized Islatravir's potential to anchor once-weekly combinations (with lenacapavir and ulonivirine) and a potential monthly oral product (MK 852), which would be a significant public health contribution. He unequivocally affirmed Merck's commitment and passion for its HIV program.

“So if the question is, are we committed? And are we passionate about our HIV program? I hope that you heard from the tenor of my response, the answer is unequivocally yes.”

asked by Geoffrey Meacham · answered by Dean Li