Merck & Co (MRK) Goldman Sachs 45th Annual Global Healthcare Conference summary

Pipeline and portfolio progress

• Significant expansion in oncology, cardiometabolic, vaccines, neuroscience, ophthalmology, and animal health portfolios over the past three years.

• Deep phase II and III pipelines now established across multiple therapeutic areas.

• Recent deals, such as EyeBio and Prometheus, highlight focus on early engagement and strategic partnerships.

• Immunology pipeline advancing with TL1A and CD30 ligand, targeting multi-billion dollar opportunities in ulcerative colitis and Crohn's disease.

• Animal health business expected to outpace market growth, driven by innovation and new product launches.

Business development and capital allocation

• M&A activity remains focused on $0–$15 billion deals, prioritizing scientific merit and strategic fit.

• Flexible approach to deal structures, including acquisitions, partnerships, and collaborations to access or de-risk science.

• Capital allocation prioritizes investment in growth and business development over share repurchases, with dividends maintained.

• Share repurchases are limited to offset dilution; excess cash may be returned to shareholders if deal flow slows.

Market environment and strategy

• Valuations for small and midcap companies are down, but high-quality assets still command strong demand and competitive processes.

• Early investment and close partnerships, such as with EyeBio and Caraway, provide competitive advantages.

• Robust market for deals exists for compelling assets, with management teams open to partnerships.