UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported) July 28, 2022
 
Merck & Co., Inc.
(Exact name of registrant as specified in its charter)
 
New Jersey
(State or other jurisdiction
of incorporation)	 	1-6571
(Commission
File Number)	 	22-1918501
(I.R.S Employer
Identification No.)	
 
126 East Lincoln Avenue, Rahway, NJ
(Address of principal executive offices)	 	07065
(Zip Code)	
 
(Registrant’s telephone number, including area code) (908) 740-4000
 
Not Applicable
(Former name, former address and former fiscal year, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  ¨
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
 
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	 	Trading Symbol(s)	 	Name of each exchange on which registered	
 	 	 	 	 	
Common Stock ($0.50 par value)	 	MRK	 	New York Stock Exchange	
0.500% Notes due 2024	 	MRK 24	 	New York Stock Exchange	
1.875% Notes due 2026	 	MRK/26	 	New York Stock Exchange	
2.500% Notes due 2034	 	MRK/34	 	New York Stock Exchange	
1.375% Notes due 2036	 	MRK 36A	 	New York Stock Exchange	

 

 

 
Item 2.02. Results of Operations and Financial Condition.
 
The following information, including the exhibits hereto, is being furnished pursuant to this Item 2.02.
 
Incorporated by reference is a press release issued by Merck & Co., Inc. on July 28, 2022, regarding earnings for the second quarter of 2022, attached as Exhibit 99.1. Also incorporated by reference is certain supplemental information not included in the press release, attached as Exhibit 99.2.
 
This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)  Exhibits
 
Exhibit 99.1	Press release issued July 28, 2022, regarding earnings for the second quarter of 2022	
 	 	
Exhibit 99.2	Certain supplemental information not included in the press release	
 	 	
Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)	

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	 	Merck & Co., Inc.	
 	
Date: July 28, 2022	By:  	/s/ Kelly E. W. Grez	
 	 	Kelly E. W. Grez	
 	 	Corporate Secretary	

 

Exhibit 99.1
 
	News Release	

Merck Announces Second-Quarter 2022 Financial Results
 
	-	Merck Delivers Robust Sales Growth and Important Clinical Advancements in Second Quarter	
 
	-	Second-Quarter 2022 Worldwide Sales Were $14.6 Billion, an Increase of 28% From Second Quarter 2021; LAGEVRIO Sales Were $1.2 Billion, Growth Excluding LAGEVRIO Was 18%; Growth Excluding LAGEVRIO and the Impact From Foreign Exchange Was 20%; Sales Growth Favorably Impacted by COVID-19 Recovery	
 
	o	KEYTRUDA Sales Grew 26% to $5.3 Billion; Excluding the Impact From Foreign Exchange, Sales Grew 30%	
	o	GARDASIL/GARDASIL 9 Sales Grew 36% to $1.7 Billion; Excluding the Impact From Foreign Exchange, Sales Grew 40%	
 
	-	Second-Quarter 2022 GAAP EPS From Continuing Operations Was $1.55; Second-Quarter 2022 Non-GAAP EPS Was $1.87	
 
	-	Advanced and Expanded Pipeline:	
 
	o	The U.S. Food and Drug Administration (FDA) Approved Merck’s VAXNEUVANCE for the Prevention of Invasive Pneumococcal Disease in Infants and Children	
	o	The U.S. Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices Unanimously Voted to Provisionally Recommend Use of Merck’s VAXNEUVANCE as an Option for Pneumococcal Vaccination in Infants and Children	
	o	Merck Announced Positive Results From a Phase 1/2 Study for V116, Merck’s Investigational Pneumococcal 21-Valent Conjugate Vaccine for Adults, and Enrolled the First Patient Into the Phase 3 STRIDE-3 Trial Evaluating V116 in Vaccine-Naïve Adults	
	o	The European Commission (EC) Approved Four Indications for KEYTRUDA	

1

	-	2022 Continuing Operations Financial Outlook:	
 
	o	Company Raises and Narrows Expected Full-Year 2022 Worldwide Sales Range To Be Between $57.5 Billion and $58.5 Billion, Reflecting Full-Year Growth of 18% to 20%, Including Negative Impact From Foreign Exchange of Approximately 3%	
	o	Company Expects Full-Year 2022 GAAP EPS To Be Between $5.89 and $5.99; Company Narrows Expected Full-Year 2022 Non-GAAP EPS Range To Be Between $7.25 and $7.35, Including Negative Impact From Foreign Exchange of Approximately 3%	
 
RAHWAY, N.J., July 28, 2022 – Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the second quarter of 2022.
 
“I continue to be immensely proud of how the Merck team is performing in all facets of our business — scientifically, commercially and operationally,” said Robert M. Davis, chief executive officer and president. “Our strategy is working and our future is bright. I am very confident that we are well-positioned to achieve our near- and long-term goals, anchored by our commitment to deliver innovative medicines and vaccines to patients and value to all of our stakeholders, including shareholders.”
 
Financial Summary
 
Financial information presented in this release reflects Merck’s results on a continuing operations basis, which excludes Organon & Co. that was spun-off on June 2, 2021.
 
 	 	Second Quarter	 	
$ in millions, except EPS amounts	 	2022	 	 	2021	 	 	Change	 	 	Change
Ex-
Exchange	 	
Sales	 	$	14,593	 	 	$	11,402	 	 	 	28	%	 	 	31	%	
GAAP net income1	 	 	3,944	 	 	 	1,213	 	 	 	N/M**	 	 	 	N/M	 	
Non-GAAP net income that excludes certain items1,2*	 	 	4,743	 	 	 	1,559	 	 	 	N/M	 	 	 	N/M	 	
GAAP EPS	 	 	1.55	 	 	 	0.48	 	 	 	N/M	 	 	 	N/M	 	
Non-GAAP EPS that excludes certain items2*	 	 	1.87	 	 	 	0.61	 	 	 	N/M	 	 	 	N/M	 	
 
*Refer to table on page 10
**Not meaningful

 

	1	Net income from continuing operations attributable to Merck & Co., Inc.	
	2	Merck is providing certain 2022 and 2021 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, senior management’s annual compensation is derived in part using a non-GAAP pre-tax 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. Non-GAAP results for 2021 have been recast to conform to presentation changes implemented in 2022.	

2

Generally accepted accounting principles (GAAP) earnings per share (EPS) assuming dilution was $1.55 for the second quarter of 2022. Non-GAAP EPS of $1.87 for the second quarter of 2022 excludes acquisition- and divestiture-related costs, restructuring costs, as well as income and losses from investments in equity securities. In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting. Results for 2021 have been recast to conform to the new presentation, which reduced previously reported second-quarter 2021 non-GAAP EPS of $1.31, resulting in revised non-GAAP EPS of $0.61. For more information, refer to the Form 8-K filed by the company on April 21, 2022.
 
Year-to-date results can be found in the attached tables.
 
Vaccines Program Highlights
 
	·	The FDA approved an expanded indication for VAXNEUVANCE (Pneumococcal 15-valent Conjugate Vaccine) to include infants and children. VAXNEUVANCE is now indicated to help prevent invasive pneumococcal disease caused by the serotypes in the vaccine in individuals six weeks and older.	
 
	·	The CDC Advisory Committee on Immunization Practices unanimously voted to provisionally recommend use of VAXNEUVANCE as an option to the currently available 13-valent pneumococcal conjugate vaccine (PCV13) for children under 19 years according to currently recommended PCV13 dosing and schedules. These provisional recommendations will be reviewed by the director of the CDC and the Department of Health and Human Services, and final recommendations will become official when published in the CDC’s Morbidity and Mortality Weekly Report.	
 
	·	Merck presented positive results from the Phase 1/2 study for V116, Merck’s investigational Pneumococcal 21-Valent Conjugate Vaccine designed to target serotypes that account for 85% of all invasive pneumococcal diseases in U.S. adults 65 years and older as of 20193, and enrolled the first patient into the Phase 3 STRIDE-3 trial evaluating V116 in vaccine-naïve adults. V116 contains eight serotypes not included in any currently licensed pneumococcal vaccine.	

 

	3	Centers for Disease Control and Prevention, IPD serotype data 2019, as compiled from data provided through Active Bacterial Core surveillance (ABCs).	

3

Oncology Program Highlights
 
	·	Merck announced the following regulatory milestones for KEYTRUDA (pembrolizumab):	
 
	o	The FDA accepted an application seeking approval for KEYTRUDA as adjuvant therapy for stage IB (>4 centimeters), II or IIIA non-small cell lung cancer (NSCLC) following complete surgical resection based on data from the Phase 3 KEYNOTE-091 trial. The FDA has set a Prescription Drug User Fee Act date of January 29, 2023, however further data may be provided during the review process that may delay this date.	
	o	The EC approved four indications for KEYTRUDA:	
 
	§	Approved as monotherapy for the adjuvant treatment of adult and adolescent patients (>12 years of age) with stage IIB or IIC melanoma and who have undergone complete resection, based on results from the KEYNOTE-716 trial. The EC also approved expanding the indication for KEYTRUDA in advanced and stage III melanoma to include adolescent patients 12 years and older.	
 
	§	Approved in combination with chemotherapy as neoadjuvant treatment, and then continued as adjuvant monotherapy after surgery, for adults with locally advanced or early-stage triple-negative breast cancer (TNBC) at high risk of recurrence, based on results from the KEYNOTE-522 trial.	
 
	§	Approved as monotherapy for the treatment of certain adult patients with microsatellite instability-high (MSI-H) or mismatch repair deficient (dMMR) tumors for five types of cancer: unresectable or metastatic colorectal, gastric, small intestine or biliary cancer, as well as advanced or recurrent MSI-H/dMMR endometrial cancer, based on results from the KEYNOTE-164 and KEYNOTE-158 trials.	
 
	§	Approved in combination with chemotherapy, with or without bevacizumab, for patients with persistent, recurrent or metastatic cervical cancer whose tumors express PD-L1 (Combined Positive Score ≥ 1), based on results from the KEYNOTE 826 trial.	
 
	·	The European Medicines Agency Committee for Medicinal Products for Human Use adopted a positive opinion for Lynparza (olaparib), an oral poly (ADP-ribose) polymerase (PARP) inhibitor being co-developed and co-commercialized with AstraZeneca, as adjuvant treatment for patients with germline BRCA-mutated, human epidermal growth factor 2-negative high-risk early breast cancer who have been treated with neoadjuvant or adjuvant chemotherapy, based on results from the Phase 3 OlympiA trial.	

4

	·	At the 2022 American Society of Clinical Oncology Annual Meeting, Merck presented new data in more than 25 types of cancer and held an investor event to highlight key data and provide updates from its late-stage development programs and diverse early-stage pipeline.	
 
Global Pharmaceuticals Program Highlight
 
	·	Merck, in collaboration with Ridgeback Biotherapeutics, announced data from a pre-specified exploratory analysis for LAGEVRIO (molnupiravir) from the Phase 3 MOVe-OUT study indicating that a lower proportion of participants treated with LAGEVRIO had an acute care visit or COVID-19-related acute care visit versus placebo. Additionally, in a post-hoc subgroup analysis, fewer LAGEVRIO-treated patients who were hospitalized post-randomization in MOVe-OUT required respiratory interventions (including invasive mechanical ventilation) compared to those who received placebo.	
 
Second-Quarter Revenue Performance
 
The following table reflects sales of the company’s top pharmaceutical products, as well as sales of Animal Health products.
 
 	 	Second Quarter	 	
$ in millions	 	2022	 	 	2021	 	 	Change	 	 	Change Ex-
Exchange	 	
Total Sales	 	$	14,593	 	 	$	11,402	 	 	 	28	%	 	 	31	%	
Pharmaceutical	 	 	12,756	 	 	 	9,980	 	 	 	28	%	 	 	33	%	
KEYTRUDA	 	 	5,252	 	 	 	4,176	 	 	 	26	%	 	 	30	%	
GARDASIL / GARDASIL 9	 	 	1,674	 	 	 	1,234	 	 	 	36	%	 	 	40	%	
JANUVIA / JANUMET	 	 	1,233	 	 	 	1,261	 	 	 	-2	%	 	 	3	%	
LAGEVRIO	 	 	1,177	 	 	 	0	 	 	 	-	 	 	 	-	 	
PROQUAD, M-M-R II and VARIVAX	 	 	578	 	 	 	516	 	 	 	12	%	 	 	14	%	
BRIDION	 	 	426	 	 	 	387	 	 	 	10	%	 	 	15	%	
Lynparza*	 	 	275	 	 	 	248	 	 	 	11	%	 	 	17	%	
Lenvima*	 	 	231	 	 	 	181	 	 	 	28	%	 	 	33	%	
SIMPONI	 	 	181	 	 	 	202	 	 	 	-10	%	 	 	1	%	
ROTATEQ	 	 	173	 	 	 	208	 	 	 	-17	%	 	 	-14	%	
Animal Health	 	 	1,467	 	 	 	1,472	 	 	 	0	%	 	 	5	%	
Livestock	 	 	826	 	 	 	821	 	 	 	1	%	 	 	6	%	
Companion Animals	 	 	641	 	 	 	651	 	 	 	-2	%	 	 	3	%	
Other Revenues**	 	 	370	 	 	 	(50	)	 	 	N/M	***	 	 	N/M	 	
 
*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 third-party manufacturing sales and miscellaneous corporate revenues, including
revenue-hedging activities. The revenue-hedging activities resulted in negative revenue in the second quarter of 2021.
***Not meaningful

5

Pharmaceutical Revenue
 
Second-quarter pharmaceutical sales increased 28% to $12.8 billion. Pharmaceutical sales growth in the second quarter was 16% excluding LAGEVRIO sales, and was primarily driven by oncology, vaccines and hospital acute care products. The COVID-19 pandemic unfavorably affected sales in the second quarter of 2021 by approximately $400 million, which favorably impacted the growth rate in the second quarter of 2022.
 
LAGEVRIO sales totaled $1.2 billion for the second quarter, primarily consisting of sales in Japan and the U.K. The initial commitment of LAGEVRIO to the U.S. was fulfilled in the first quarter of 2022.
 
Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 26% to $5.3 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from metastatic indications including certain types of NSCLC, renal cell carcinoma, head and neck squamous cell carcinoma, TNBC and MSI-H cancers, and increased uptake across recent earlier-stage launches including certain types of neoadjuvant/adjuvant TNBC in the U.S.
 
Also contributing to higher sales in oncology was a 28% increase in Lenvima (lenvatinib) alliance revenue driven primarily by higher demand in the U.S., and an 11% increase in Lynparza alliance revenue reflecting continued demand globally, particularly in the U.S. driven by strong uptake in earlier-stage breast cancer.
 
Growth in vaccines was primarily driven by higher combined sales of GARDASIL (Human Papillomavirus Quadrivalent [Types 6, 11, 16 and 18] Vaccine, Recombinant) and GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) vaccines to prevent certain cancers and other diseases caused by human papillomavirus (HPV). Second-quarter GARDASIL/GARDASIL 9 sales grew 36% to $1.7 billion primarily driven by strong demand outside of the U.S., particularly in China, which also benefited from increased supply.
 
Growth in hospital acute care reflects higher demand globally for BRIDION (sugammadex) injection 100 mg/mL, a medicine for the reversal of neuromuscular blockade induced by rocuronium bromide or vecuronium bromide in adults and pediatric patients aged 2 years and older undergoing surgery. Sales increased 10% to $426 million, primarily due to an increase in its share among neuromuscular blockade reversal agents and an increase in surgical procedures during the second quarter. Growth in hospital acute care also reflects higher sales of ZERBAXA (ceftolozane and tazobactam), a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of adults with certain bacterial infections. Sales of $46 million resulted from the phased resupply initiated in the fourth quarter of 2021 that is being expanded to additional markets during 2022.

6

Pharmaceutical sales growth was partially offset by lower combined sales of ISENTRESS/ISENTRESS HD (raltegravir), an HIV integrase inhibitor used in combination with other antiretroviral agents for the treatment of HIV-1 infection, which declined 24% to $147 million reflecting lower global demand. Pharmaceutical sales growth was also partially offset by lower combined sales of JANUVIA (sitagliptin) and JANUMET (sitagliptin and metformin HCI), which declined 2% to $1.2 billion, primarily reflecting the unfavorable effect of foreign exchange and lower pricing in certain international markets, partially offset by the impact of a prior year unfavorable adjustment to rebate reserves in the U.S. The company lost market exclusivity for JANUVIA and JANUMET in China in July and will lose market exclusivity in the European Union in September.
 
Animal Health Revenue
 
Animal Health sales totaled $1.5 billion for the second quarter of 2022, flat compared to the second quarter of 2021. Excluding the unfavorable effect from foreign exchange, Animal Health sales grew 5%. Sales were driven primarily by livestock products reflecting higher demand globally for ruminant and poultry products. Sales in companion animal products were primarily driven by the BRAVECTO (fluralaner) parasiticide line of products.

7

Second-Quarter Expense, EPS and Related Information
 
The tables below present selected expense information.
 
$ in millions	 	GAAP	 	 	Acquisition-
and
Divestiture-
Related
Costs4	 	 	Restructuring
Costs	 	 	(Income)
Loss from
Investments
in Equity
Securities	 	 	Certain
Other
Items	 	 	Non-
GAAP2	 	
Second Quarter 2022	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	4,216	 	 	$	451	 	 	$	67	 	 	$	-	 	 	$	-	 	 	$	3,698	 	
Selling, general and administrative	 	 	2,512	 	 	 	65	 	 	 	27	 	 	 	-	 	 	 	-	 	 	 	2,420	 	
Research and development	 	 	2,798	 	 	 	12	 	 	 	22	 	 	 	-	 	 	 	-	 	 	 	2,764	 	
Restructuring costs	 	 	142	 	 	 	-	 	 	 	142	 	 	 	-	 	 	 	-	 	 	 	-	 	
Other (income) expense, net	 	 	438	 	 	 	2	 	 	 	-	 	 	 	234	 	 	 	-	 	 	 	202	 	
Second Quarter 2021	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	3,104	 	 	$	345	 	 	$	38	 	 	$	-	 	 	$	37	 	 	$	2,684	 	
Selling, general and administrative	 	 	2,281	 	 	 	25	 	 	 	2	 	 	 	-	 	 	 	-	 	 	 	2,254	 	
Research and development	 	 	4,321	 	 	 	16	 	 	 	6	 	 	 	-	 	 	 	-	 	 	 	4,299	 	
Restructuring costs	 	 	82	 	 	 	-	 	 	 	82	 	 	 	-	 	 	 	-	 	 	 	-	 	
Other (income) expense, net	 	 	(103	)	 	 	117	 	 	 	-	 	 	 	(258	)	 	 	-	 	 	 	38	 	
 
GAAP Expense, EPS and Related Information
 
Gross margin was 71.1% for the second quarter of 2022 compared to 72.8% for the second quarter of 2021. The decrease primarily reflects impacts from LAGEVRIO, which has a lower gross margin due to profit sharing with Ridgeback, as well as higher inventory write-offs, higher manufacturing costs and higher acquisition- and divestiture-related costs. The gross margin decline was partially offset by the favorable effects of product mix.
 
Selling, general and administrative (SG&A) expenses were $2.5 billion in the second quarter of 2022, an increase of 10% compared to the second quarter of 2021. The increase primarily reflects higher promotion and administrative costs, including compensation and benefit costs, as well as higher acquisition- and divestiture-related costs, partially offset by the favorable impact of foreign exchange.

 

	4	Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories recognized as a result of acquisitions, 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 related to acquisitions and divestitures.	

8

Research and development (R&D) expenses were $2.8 billion in the second quarter of 2022 compared to $4.3 billion in the second quarter of 2021. The decrease was primarily driven by a $1.7 billion charge in the prior year for the acquisition of Pandion Therapeutics, Inc. (Pandion). The decline was partially offset by higher clinical development spending, higher compensation and benefits, and higher investments in technology in support of the digital enablement of Merck’s research operations.
 
Other (income) expense, net, was $438 million of expense in the second quarter of 2022 compared to $103 million of income in the second quarter of 2021, primarily due to net unrealized losses from investments in equity securities in the second quarter of 2022, compared to net unrealized income from investments in equity securities in the second quarter of 2021. Other (income) expense, net, in the second quarter of 2022 also reflects higher pension settlement costs of approximately $100 million compared to the second quarter of 2021.
 
The effective income tax rate was 12.0% for the second quarter of 2022 compared to 29.3% in the second quarter of 2021. The effective income tax rate in the second quarter of 2021 reflects no tax benefit recognized on the charge for the acquisition of Pandion.
 
GAAP EPS was $1.55 for the second quarter of 2022 compared to $0.48 for the second quarter of 2021.
 
Non-GAAP Expense, EPS and Related Information
 
Non-GAAP gross margin was 74.7% for the second quarter of 2022 compared to 76.5% for the second quarter of 2021. The decrease in non-GAAP gross margin primarily reflects impacts from LAGEVRIO, which has a lower gross margin due to profit sharing with Ridgeback, as well as higher inventory write-offs and manufacturing costs. The gross margin decline was partially offset by the favorable effects of product mix.
 
Non-GAAP SG&A expenses were $2.4 billion in the second quarter of 2022, an increase of 7% compared to the second quarter of 2021. The increase primarily reflects higher promotion and administrative costs, including compensation and benefit costs, partially offset by the favorable impact of foreign exchange.
 
Non-GAAP R&D expenses were $2.8 billion in the second quarter of 2022 compared to $4.3 billion in the second quarter of 2021. The decrease primarily reflects a $1.7 billion charge in the prior year for the acquisition of Pandion. The decline was partially offset by higher clinical development spending, higher compensation and benefits, and higher investments in technology in support of the digital enablement of Merck’s research operations.

9

Non-GAAP other (income) expense, net, was $202 million of expense in the second quarter of 2022 compared to $38 million of expense in the second quarter of 2021 reflecting higher pension settlement costs of approximately $100 million.
 
The non-GAAP effective income tax rate was 13.8% for the second quarter of 2022 compared to 26.7% in the second quarter of 2021. The non-GAAP effective income tax rate in the second quarter of 2021 reflects no tax benefit recognized on the charge for the acquisition of Pandion.
 
Non-GAAP EPS was $1.87 for the second quarter of 2022 compared to $0.61 for the second quarter of 2021.
 
A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.
 
 	 	Second Quarter	 	
$ in millions, except EPS amounts	 	2022	 	 	2021	 	
EPS	 	 	 	 	 	 	 	 	
GAAP EPS	 	$	1.55	 	 	$	0.48	 	
Difference	 	 	0.32	 	 	 	0.13	 	
Non-GAAP EPS that excludes items listed below2	 	$	1.87	 	 	$	0.61	 	
 	 	 	 	 	 	 	 	 	
Net Income	 	 	 	 	 	 	 	 	
GAAP net income1	 	$	3,944	 	 	$	1,213	 	
Difference	 	 	799	 	 	 	346	 	
Non-GAAP net income that excludes items listed below1,2	 	$	4,743	 	 	$	1,559	 	
 	 	 	 	 	 	 	 	 	
Decrease (Increase) in Net Income Due to Excluded Items:	 	 	 	 	 	 	 	 	
Acquisition- and divestiture-related costs4	 	$	530	 	 	$	503	 	
Restructuring costs	 	 	258	 	 	 	128	 	
Loss (income) from investments in equity securities	 	 	234	 	 	 	(258	)	
Charge for the discontinuation of COVID-19 development programs	 	 	-	 	 	 	37	 	
Net decrease (increase) in income before taxes	 	 	1,022	 	 	 	410	 	
Estimated income tax (benefit) expense	 	 	(223	)	 	 	(64	)	
Decrease (increase) in net income	 	$	799	 	 	$	346	 	
 
Financial Outlook
 
Beginning in 2022, Merck no longer excludes expenses for upfront and milestone payments related to collaborations and licensing agreements, or charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions from its non-GAAP results. Historically, the company excluded these charges to the extent they were considered by the company to be significant to the results of a particular period. These changes were made to align with views expressed by the U.S. Securities and Exchange Commission. Prior periods have been recast to reflect this change. For 2021, non-GAAP results have been recast to include $1.7 billion of incremental R&D expense, resulting in revised full-year 2021 EPS of $5.37.

10

Business development continues to be a priority for Merck, as demonstrated by the company’s recent collaboration with Orion announced in July for the development and commercialization of ODM-208, an investigational steroid synthesis inhibitor for the treatment of metastatic castration-resistant prostate cancer. The GAAP and non-GAAP financial outlooks include the upfront payment of $290 million, which will have an estimated $0.09 negative impact on full-year EPS.
 
As an on-going practice, the financial outlook will not include significant potential business development transactions.
 
Merck continues to experience strong global underlying demand across its key pillars of growth, particularly in oncology and vaccines. As a result, Merck is raising and narrowing its full-year guidance for sales.
 
At mid-July 2022 exchange rates, Merck expects sales growth of 18% to 20% in 2022, with full-year sales estimated to be between $57.5 billion and $58.5 billion, including a negative impact from foreign exchange of approximately 3%, a greater than 1% incremental negative impact from prior sales guidance.
 
Merck’s estimated full-year non-GAAP effective income tax rate is unchanged and expected to be between 13.5% and 14.5%.
 
Merck expects its estimated full-year 2022 GAAP EPS to be between $5.89 and $5.99.
 
Merck is narrowing its expected full-year 2022 non-GAAP EPS range to be between $7.25 and $7.35, including a negative impact from foreign exchange of approximately 3% at mid-July exchange rates. Operational strength of approximately $0.25 that would have resulted in an increase from the previous guidance range is being offset by the following negative impacts:
 
	o	The upfront payment of $290 million to Orion	
	o	A greater than 1% incremental negative impact from foreign exchange	
	o	Higher U.S. pension settlement expense	
 
The non-GAAP range excludes acquisition- and divestiture-related costs and costs related to restructuring programs as well as income and losses from investments in equity securities.

11

The company continues to expect sales of $5.0 billion to $5.5 billion from LAGEVRIO for full-year 2022. Merck shares profits equally with its partner, Ridgeback, which is reflected in cost of sales.
 
The following table summarizes the company’s full-year 2022 financial guidance.
 
 	 	GAAP	 	Non-GAAP2	
Sales	 	$57.5 to $58.5 billion	 	$57.5 to $58.5 billion*	
Operating expenses	 	$21.0 to $22.0 billion	 	$20.5 to $21.5 billion	
Effective tax rate	 	12% to 13%	 	13.5% to 14.5%	
EPS**	 	$5.89 to $5.99	 	$7.25 to $7.35	
 
*The company does not have any non-GAAP adjustments to sales.
**EPS guidance for 2022 assumes a share count (assuming dilution) of approximately 2.54 billion shares.
 
A reconciliation of anticipated 2022 GAAP EPS to non-GAAP EPS and the items excluded from non-GAAP EPS are provided in the table below.
 
$ in millions, except EPS amounts	 	Full-Year 2022	 	
GAAP EPS	 	 	$5.89 to $5.99	 	
Difference	 	$	1.36	 	
Non-GAAP EPS that excludes items listed below2	 	 	$7.25 to $7.35	 	
 	 	 	 	 	
Acquisition- and divestiture-related costs	 	$	2,750	 	
Restructuring costs	 	 	550	 	
(Income) loss from investments in equity securities	 	 	1,050	 	
Net decrease (increase) in income before taxes	 	 	4,350	 	
Estimated income tax (benefit) expense	 	 	(900	)	
Decrease (increase) in net income	 	$	3,450	 	
 
Earnings Conference Call
 
Investors, journalists and the general public may access a live audio webcast of the call today at 8:00 a.m. EDT on Merck’s website.
 
Participants may join the call by dialing 877-692-8955 (USA Toll-Free) or 234-720-6979. If you are calling from other countries, visit this weblink. All dial-in participants can use the access code 1857604. Journalists who wish to ask questions are requested to contact a member of Merck’s Media Relations team.
 
About Merck
 
At Merck, known as MSD outside of the United States and Canada, we are unified around our purpose: We use the power of leading-edge science to save and improve lives around the world. For more than 130 years, we have brought hope to humanity through the development of important medicines and vaccines. We aspire to be the premier research-intensive biopharmaceutical company in the world – and today, we are at the forefront of research to deliver innovative health solutions that advance the prevention and treatment of diseases in people and animals. We foster a diverse and inclusive global workforce and operate responsibly every day to enable a safe, sustainable and healthy future for all people and communities. For more information, visit www.merck.com and connect with us on Twitter, Facebook, Instagram, YouTube and LinkedIn.

12

Forward-Looking Statement of Merck & Co., Inc., Rahway, N.J., USA
 
This news release 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 company’s management 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 uncertainties 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 fluctuations; 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 by competitors; challenges inherent in new product development, including obtaining regulatory approval; the company’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of the company’s 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 or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
 
Media Contacts:	Johanna Herrmann	Investor Contacts:	Peter Dannenbaum	
 	(617) 216-6029	 	(908) 740-1037
 	
 	Melissa Moody
(215) 407-3536	 	Steven Graziano
(908) 740-6582	

13

CONSOLIDATED STATEMENT OF INCOME - GAAP
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 1
                     
On June 2, 2021, Merck completed the spin-off of products from its women’s health, biosimilars and established brands businesses into a new, independent, publicly traded company named Organon & Co. (Organon). The historical results of the businesses that were contributed to Organon in the spin-off are excluded from sales and expenses and reflected as discontinued operations in the company’s Consolidated Statement of Income provided below.

 	 	GAAP	 	 		 	 	GAAP	 	 		 	
 	 	2Q22	 	 	2Q21	 	 	% Change	 	 	June YTD
2022	 	 	June YTD
2021	 	 	% Change	 	
Sales	 	$	14,593	 	 	$	11,402	 	 	 	28	%	 	$	30,494	 	 	$	22,029	 	 	 	38	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs, Expenses and Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	 	4,216	 	 	 	3,104	 	 	 	36	%	 	 	9,596	 	 	 	6,303	 	 	 	52	%	
Selling, general and administrative	 	 	2,512	 	 	 	2,281	 	 	 	10	%	 	 	4,834	 	 	 	4,468	 	 	 	8	%	
Research and development	 	 	2,798	 	 	 	4,321	 	 	 	-35	%	 	 	5,374	 	 	 	6,732	 	 	 	-20	%	
Restructuring costs	 	 	142	 	 	 	82	 	 	 	73	%	 	 	194	 	 	 	380	 	 	 	-49	%	
Other (income) expense, net	 	 	438	 	 	 	(103	)	 	 	*	 	 	 	1,148	 	 	 	(558	)	 	 	*	 	
Income from Continuing Operations Before Taxes	 	 	4,487	 	 	 	1,717	 	 	 	*	 	 	 	9,348	 	 	 	4,704	 	 	 	99	%	
Income Tax Provision	 	 	538	 	 	 	503	 	 	 	 	 	 	 	1,092	 	 	 	741	 	 	 	 	 	
Net Income from Continuing Operations	 	 	3,949	 	 	 	1,214	 	 	 	*	 	 	 	8,256	 	 	 	3,963	 	 	 	*	 	
Less: Net Income Attributable to Noncontrolling Interests	 	 	5	 	 	 	1	 	 	 	 	 	 	 	2	 	 	 	5	 	 	 	 	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	3,944	 	 	 	1,213	 	 	 	*	 	 	 	8,254	 	 	 	3,958	 	 	 	*	 	
Income from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests	 	 	-	 	 	 	332	 	 	 	*	 	 	 	-	 	 	 	766	 	 	 	*	 	
Net Income Attributable to Merck & Co., Inc.	 	$	3,944	 	 	$	1,545	 	 	 	*	 	 	$	8,254	 	 	$	4,724	 	 	 	75	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from Continuing Operations	 	$	1.56	 	 	$	0.48	 	 	 	*	 	 	$	3.26	 	 	$	1.56	 	 	 	*	 	
Income from Discontinued Operations	 	 	-	 	 	 	0.13	 	 	 	*	 	 	 	-	 	 	 	0.30	 	 	 	*	 	
Net Income	 	$	1.56	 	 	$	0.61	 	 	 	*	 	 	$	3.26	 	 	$	1.87	 	 	 	74	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from Continuing Operations	 	$	1.55	 	 	$	0.48	 	 	 	*	 	 	$	3.25	 	 	$	1.56	 	 	 	*	 	
Income from Discontinued Operations	 	 	-	 	 	 	0.13	 	 	 	*	 	 	 	-	 	 	 	0.30	 	 	 	*	 	
Net Income	 	$	1.55	 	 	$	0.61	 	 	 	*	 	 	$	3.25	 	 	$	1.86	 	 	 	75	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Shares Outstanding	 	 	2,531	 	 	 	2,533	 	 	 	 	 	 	 	2,529	 	 	 	2,532	 	 	 	 	 	
Average Shares Outstanding Assuming Dilution	 	 	2,540	 	 	 	2,540	 	 	 	 	 	 	 	2,538	 	 	 	2,540	 	 	 	 	 	
Tax Rate from Continuing Operations	 	 	12.0	%	 	 	29.3	%	 	 	 	 	 	 	11.7	%	 	 	15.8	%	 	 	 	 	
 
* 100% or greater  

14

MERCK & CO., INC.
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2022 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2a
 
 	 	GAAP	 	 	Acquisition and
Divestiture-
Related Costs (1)	 	 	Restructuring
Costs (2)	 	 	(Income) Loss from
Investments in Equity
Securities	 	 	Adjustment
Subtotal	 	 	Non-GAAP	 	
Second Quarter	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	4,216	 	 	 	451	 	 	 	67	 	 	 	 	 	 	 	518	 	 	$	3,698	 	
Selling, general and administrative	 	 	2,512	 	 	 	65	 	 	 	27	 	 	 	 	 	 	 	92	 	 	 	2,420	 	
Research and development	 	 	2,798	 	 	 	12	 	 	 	22	 	 	 	 	 	 	 	34	 	 	 	2,764	 	
Restructuring costs	 	 	142	 	 	 	 	 	 	 	142	 	 	 	 	 	 	 	142	 	 	 	-	 	
Other (income) expense, net	 	 	438	 	 	 	2	 	 	 	 	 	 	 	234	 	 	 	236	 	 	 	202	 	
Income from Continuing Operations Before Taxes	 	 	4,487	 	 	 	(530	)	 	 	(258	)	 	 	(234	)	 	 	(1,022	)	 	 	5,509	 	
Income Tax Provision (Benefit)	 	 	538	 	 	 	(131	)(3)	 	 	(40	)(3)	 	 	(52	)(3)	 	 	(223	)	 	 	761	 	
Net Income from Continuing Operations	 	 	3,949	 	 	 	(399	)	 	 	(218	)	 	 	(182	)	 	 	(799	)	 	 	4,748	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	3,944	 	 	 	(399	)	 	 	(218	)	 	 	(182	)	 	 	(799	)	 	 	4,743	 	
Earnings per Common Share Assuming Dilution from Continuing Operations	 	$	1.55	 	 	 	(0.16	)	 	 	(0.09	)	 	 	(0.07	)	 	 	(0.32	)	 	$	1.87	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax Rate	 	 	12.0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	13.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
June YTD	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	9,596	 	 	 	1,131	 	 	 	113	 	 	 	 	 	 	 	1,244	 	 	$	8,352	 	
Selling, general and administrative	 	 	4,834	 	 	 	115	 	 	 	48	 	 	 	 	 	 	 	163	 	 	 	4,671	 	
Research and development	 	 	5,374	 	 	 	34	 	 	 	29	 	 	 	 	 	 	 	63	 	 	 	5,311	 	
Restructuring costs	 	 	194	 	 	 	-	 	 	 	194	 	 	 	 	 	 	 	194	 	 	 	-	 	
Other (income) expense, net	 	 	1,148	 	 	 	(112	)	 	 	 	 	 	 	918	 	 	 	806	 	 	 	342	 	
Income from Continuing Operations Before Taxes	 	 	9,348	 	 	 	(1,168	)	 	 	(384	)	 	 	(918	)	 	 	(2,470	)	 	 	11,818	 	
Income Tax Provision (Benefit)	 	 	1,092	 	 	 	(286	)(3)	 	 	(62	)(3)	 	 	(204	)(3)	 	 	(552	)	 	 	1,644	 	
Net Income from Continuing Operations	 	 	8,256	 	 	 	(882	)	 	 	(322	)	 	 	(714	)	 	 	(1,918	)	 	 	10,174	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	8,254	 	 	 	(882	)	 	 	(322	)	 	 	(714	)	 	 	(1,918	)	 	 	10,172	 	
Earnings per Common Share Assuming Dilution from Continuing Operations	 	$	3.25	 	 	 	(0.35	)	 	 	(0.13	)	 	 	(0.28	)	 	 	(0.76	)	 	$	4.01	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax Rate	 	 	11.7	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	13.9	%	
 
Only the line items that are affected by non-GAAP adjustments are shown.                
 
Merck is providing certain 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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures 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, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.
 
(1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures.  Amounts included in research and development expenses primarily reflect expenses for the amortization of intangible assets.  Amount included in other (income) expense, net, for the six month period primarily reflects royalty income and a decrease in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture.  
 
(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs.
 
(3) Represents the estimated tax impacts on the reconciling items based on applying the statutory rate of the originating territory of the non-GAAP adjustments.  

15

MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3
  
 	 	2022	 	 	2021	 	 	2Q	 	 	June YTD	 	
 	 	1Q	 	 	2Q	 	 	June YTD	 	 	1Q	 	 	2Q	 	 	June YTD	 	 	3Q	 	 	4Q	 	 	Full Year	 	 	Nom %	 	 	Ex-Exch %	 	 	Nom %	 	 	Ex-Exch %	 	
TOTAL SALES (1) 	 	$	15,901	 	 	$	14,593	 	 	$	30,494	 	 	$	10,627	 	 	$	11,402	 	 	$	22,029	 	 	$	13,154	 	 	$	13,521	 	 	$	48,704	 	 	 	28	 	 	 	31	 	 	 	38	 	 	 	41	 	
PHARMACEUTICAL	 	 	14,107	 	 	 	12,756	 	 	 	26,863	 	 	 	9,238	 	 	 	9,980	 	 	 	19,218	 	 	 	11,496	 	 	 	12,039	 	 	 	42,754	 	 	 	28	 	 	 	33	 	 	 	40	 	 	 	45	 	
Oncology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Keytruda	 	 	4,809	 	 	 	5,252	 	 	 	10,061	 	 	 	3,899	 	 	 	4,176	 	 	 	8,076	 	 	 	4,534	 	 	 	4,577	 	 	 	17,186	 	 	 	26	 	 	 	30	 	 	 	25	 	 	 	29	 	
Alliance Revenue – Lynparza (2)	 	 	266	 	 	 	275	 	 	 	541	 	 	 	228	 	 	 	248	 	 	 	475	 	 	 	246	 	 	 	268	 	 	 	989	 	 	 	11	 	 	 	17	 	 	 	14	 	 	 	18	 	
Alliance Revenue – Lenvima (2)	 	 	227	 	 	 	231	 	 	 	459	 	 	 	130	 	 	 	181	 	 	 	310	 	 	 	188	 	 	 	206	 	 	 	704	 	 	 	28	 	 	 	33	 	 	 	48	 	 	 	51	 	
Alliance Revenue – Reblozyl (3)	 	 	52	 	 	 	33	 	 	 	86	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	17	 	 	 	17	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	
Vaccines (4)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gardasil / Gardasil 9	 	 	1,460	 	 	 	1,674	 	 	 	3,133	 	 	 	917	 	 	 	1,234	 	 	 	2,151	 	 	 	1,993	 	 	 	1,528	 	 	 	5,673	 	 	 	36	 	 	 	40	 	 	 	46	 	 	 	48	 	
ProQuad / M-M-R II / Varivax	 	 	470	 	 	 	578	 	 	 	1,047	 	 	 	449	 	 	 	516	 	 	 	965	 	 	 	661	 	 	 	509	 	 	 	2,135	 	 	 	12	 	 	 	14	 	 	 	9	 	 	 	10	 	
RotaTeq	 	 	216	 	 	 	173	 	 	 	389	 	 	 	158	 	 	 	208	 	 	 	366	 	 	 	227	 	 	 	213	 	 	 	807	 	 	 	-17	 	 	 	-14	 	 	 	6	 	 	 	8	 	
Pneumovax 23	 	 	173	 	 	 	153	 	 	 	325	 	 	 	171	 	 	 	152	 	 	 	323	 	 	 	277	 	 	 	292	 	 	 	893	 	 	 	1	 	 	 	4	 	 	 	1	 	 	 	3	 	
Vaqta	 	 	36	 	 	 	35	 	 	 	71	 	 	 	34	 	 	 	56	 	 	 	90	 	 	 	48	 	 	 	41	 	 	 	179	 	 	 	-38	 	 	 	-38	 	 	 	-21	 	 	 	-21	 	
Hospital Acute Care	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bridion	 	 	395	 	 	 	426	 	 	 	821	 	 	 	340	 	 	 	387	 	 	 	727	 	 	 	369	 	 	 	436	 	 	 	1,532	 	 	 	10	 	 	 	15	 	 	 	13	 	 	 	17	 	
Prevymis	 	 	94	 	 	 	103	 	 	 	197	 	 	 	82	 	 	 	93	 	 	 	174	 	 	 	96	 	 	 	100	 	 	 	370	 	 	 	11	 	 	 	18	 	 	 	13	 	 	 	19	 	
Primaxin	 	 	58	 	 	 	64	 	 	 	122	 	 	 	65	 	 	 	60	 	 	 	125	 	 	 	70	 	 	 	65	 	 	 	259	 	 	 	6	 	 	 	8	 	 	 	-2	 	 	 	-2	 	
Dificid	 	 	52	 	 	 	66	 	 	 	119	 	 	 	27	 	 	 	34	 	 	 	61	 	 	 	54	 	 	 	60	 	 	 	175	 	 	 	95	 	 	 	95	 	 	 	95	 	 	 	95	 	
Noxafil	 	 	57	 	 	 	60	 	 	 	118	 	 	 	67	 	 	 	66	 	 	 	133	 	 	 	64	 	 	 	62	 	 	 	259	 	 	 	-8	 	 	 	-3	 	 	 	-11	 	 	 	-7	 	
Invanz	 	 	52	 	 	 	46	 	 	 	99	 	 	 	57	 	 	 	48	 	 	 	104	 	 	 	53	 	 	 	45	 	 	 	202	 	 	 	-3	 	 	 	1	 	 	 	-5	 	 	 	-2	 	
Cancidas	 	 	53	 	 	 	42	 	 	 	95	 	 	 	57	 	 	 	54	 	 	 	111	 	 	 	56	 	 	 	45	 	 	 	212	 	 	 	-23	 	 	 	-20	 	 	 	-15	 	 	 	-13	 	
Zerbaxa	 	 	30	 	 	 	46	 	 	 	76	 	 	 	(8	)	 	 	(1	)	 	 	(9	)	 	 	(2	)	 	 	10	 	 	 	(1	)	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	
Cardiovascular	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Alliance Revenue - Adempas/Verquvo (5)	 	 	72	 	 	 	98	 	 	 	170	 	 	 	74	 	 	 	74	 	 	 	149	 	 	 	100	 	 	 	94	 	 	 	342	 	 	 	33	 	 	 	33	 	 	 	14	 	 	 	15	 	
Adempas (6)	 	 	61	 	 	 	63	 	 	 	124	 	 	 	55	 	 	 	74	 	 	 	129	 	 	 	59	 	 	 	63	 	 	 	252	 	 	 	-14	 	 	 	-5	 	 	 	-4	 	 	 	6	 	
Virology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lagevrio	 	 	3,247	 	 	 	1,177	 	 	 	4,424	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	952	 	 	 	952	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	
Isentress / Isentress HD	 	 	158	 	 	 	147	 	 	 	305	 	 	 	209	 	 	 	192	 	 	 	401	 	 	 	189	 	 	 	178	 	 	 	769	 	 	 	-24	 	 	 	-19	 	 	 	-24	 	 	 	-20	 	
Neuroscience	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belsomra	 	 	69	 	 	 	69	 	 	 	137	 	 	 	79	 	 	 	78	 	 	 	157	 	 	 	81	 	 	 	80	 	 	 	318	 	 	 	-12	 	 	 	-2	 	 	 	-13	 	 	 	-5	 	
Immunology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Simponi	 	 	186	 	 	 	181	 	 	 	366	 	 	 	214	 	 	 	202	 	 	 	416	 	 	 	203	 	 	 	206	 	 	 	825	 	 	 	-10	 	 	 	1	 	 	 	-12	 	 	 	-3	 	
Remicade	 	 	61	 	 	 	53	 	 	 	114	 	 	 	85	 	 	 	75	 	 	 	160	 	 	 	73	 	 	 	67	 	 	 	299	 	 	 	-29	 	 	 	-19	 	 	 	-29	 	 	 	-20	 	
Diabetes (7)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Januvia	 	 	779	 	 	 	756	 	 	 	1,535	 	 	 	809	 	 	 	784	 	 	 	1,593	 	 	 	852	 	 	 	878	 	 	 	3,324	 	 	 	-4	 	 	 	1	 	 	 	-4	 	 	 	-	 	
Janumet	 	 	454	 	 	 	476	 	 	 	931	 	 	 	486	 	 	 	477	 	 	 	962	 	 	 	487	 	 	 	514	 	 	 	1,964	 	 	 	0	 	 	 	6	 	 	 	-3	 	 	 	2	 	
Other Pharmaceutical (8)	 	 	520	 	 	 	479	 	 	 	998	 	 	 	554	 	 	 	512	 	 	 	1,069	 	 	 	518	 	 	 	533	 	 	 	2,118	 	 	 	-6	 	 	 	-3	 	 	 	-7	 	 	 	-3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ANIMAL HEALTH	 	 	1,482	 	 	 	1,467	 	 	 	2,949	 	 	 	1,418	 	 	 	1,472	 	 	 	2,890	 	 	 	1,417	 	 	 	1,261	 	 	 	5,568	 	 	 	-	 	 	 	5	 	 	 	2	 	 	 	7	 	
Livestock	 	 	832	 	 	 	826	 	 	 	1,658	 	 	 	819	 	 	 	821	 	 	 	1,640	 	 	 	864	 	 	 	791	 	 	 	3,295	 	 	 	1	 	 	 	6	 	 	 	1	 	 	 	7	 	
Companion Animals	 	 	650	 	 	 	641	 	 	 	1,291	 	 	 	599	 	 	 	651	 	 	 	1,250	 	 	 	553	 	 	 	470	 	 	 	2,273	 	 	 	-2	 	 	 	3	 	 	 	3	 	 	 	7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Revenues (9)	 	 	312	 	 	 	370	 	 	 	682	 	 	 	(29	)	 	 	(50	)	 	 	(79	)	 	 	241	 	 	 	221	 	 	 	382	 	 	 	*	 	 	 	*	 	 	 	*	 	 	 	*	 	
 
* 200% or greater
Sum of quarterly amounts may not equal year-to-date amounts due to rounding.
(1) Only select products are shown.
(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.          
(3) Alliance Revenue represents royalties and a milestone payment.
(4) Total Vaccines sales were $2,481 million and $2,709 million in the first and second quarter of 2022, respectively, and $1,809 million, $2,293 million, $3,315 million and $2,715 million in the first, second, third and fourth quarter of 2021, respectively.
(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.
(6) Net product sales in Merck's marketing territories.
(7) Total Diabetes sales were $1,305 million and $1,300 million in the first and second quarter of 2022, respectively, and $1,363 million, $1,330 million, $1,417 million and $1,475 million in the first, second, third and fourth quarter of 2021, respectively.
(8) Includes Pharmaceutical products not individually shown above.
(9) Other Revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities.  Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $114 million and $32 million in the first and second quarter of 2022, respectively, and $56 million, $135 million and $27 million in the first, third and fourth quarter of 2021, respectively.        

16

Exhibit 99.2
 
MERCK & CO., INC.    
CONSOLIDATED STATEMENT OF INCOME - GAAP    
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)    
(UNAUDITED)    
Table 1a    
 
 	 	2022	 	 	2021	 	 	% Change	 	
 	 	1Q	 	 	2Q	 	 	June YTD	 	 	1Q	 	 	2Q	 	 	June YTD	 	 	3Q	 	 	4Q	 	 	Full Year	 	 	2Q	 	 	June YTD	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales	 	$	15,901	 	 	$	14,593	 	 	$	30,494	 	 	$	10,627	 	 	$	11,402	 	 	$	22,029	 	 	$	13,154	 	 	$	13,521	 	 	$	48,704	 	 	 	28	%	 	 	38	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs, Expenses and Other	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	 	5,380	 	 	 	4,216	 	 	 	9,596	 	 	 	3,199	 	 	 	3,104	 	 	 	6,303	 	 	 	3,450	 	 	 	3,873	 	 	 	13,626	 	 	 	36	%	 	 	52	%	
Selling, general and administrative	 	 	2,323	 	 	 	2,512	 	 	 	4,834	 	 	 	2,187	 	 	 	2,281	 	 	 	4,468	 	 	 	2,336	 	 	 	2,830	 	 	 	9,634	 	 	 	10	%	 	 	8	%	
Research and development	 	 	2,576	 	 	 	2,798	 	 	 	5,374	 	 	 	2,412	 	 	 	4,321	 	 	 	6,732	 	 	 	2,445	 	 	 	3,068	 	 	 	12,245	 	 	 	-35	%	 	 	-20	%	
Restructuring costs	 	 	53	 	 	 	142	 	 	 	194	 	 	 	297	 	 	 	82	 	 	 	380	 	 	 	107	 	 	 	174	 	 	 	661	 	 	 	73	%	 	 	-49	%	
Other (income) expense, net	 	 	708	 	 	 	438	 	 	 	1,148	 	 	 	(455	)	 	 	(103	)	 	 	(558	)	 	 	(450	)	 	 	(333	)	 	 	(1,341	)	 	 	*	 	 	 	*	 	
Income from Continuing Operations Before Taxes	 	 	4,861	 	 	 	4,487	 	 	 	9,348	 	 	 	2,987	 	 	 	1,717	 	 	 	4,704	 	 	 	5,266	 	 	 	3,909	 	 	 	13,879	 	 	 	*	 	 	 	99	%	
Income Tax Provision	 	 	554	 	 	 	538	 	 	 	1,092	 	 	 	238	 	 	 	503	 	 	 	741	 	 	 	695	 	 	 	85	 	 	 	1,521	 	 	 	 	 	 	 	 	 	
Net Income from Continuing Operations	 	 	4,307	 	 	 	3,949	 	 	 	8,256	 	 	 	2,749	 	 	 	1,214	 	 	 	3,963	 	 	 	4,571	 	 	 	3,824	 	 	 	12,358	 	 	 	*	 	 	 	*	 	
Less: Net (Loss) Income Attributable to Noncontrolling Interests	 	 	(3	)	 	 	5	 	 	 	2	 	 	 	4	 	 	 	1	 	 	 	5	 	 	 	4	 	 	 	4	 	 	 	13	 	 	 	 	 	 	 	 	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	4,310	 	 	 	3,944	 	 	 	8,254	 	 	 	2,745	 	 	 	1,213	 	 	 	3,958	 	 	 	4,567	 	 	 	3,820	 	 	 	12,345	 	 	 	*	 	 	 	*	 	
Income (Loss) from Discontinued Operations, Net of Taxes and Amounts Attributable to Noncontrolling Interests	 	 	-	 	 	 	-	 	 	 	-	 	 	 	434	 	 	 	332	 	 	 	766	 	 	 	-	 	 	 	(62	)	 	 	704	 	 	 	*	 	 	 	*	 	
Net Income Attributable to Merck & Co., Inc.	 	$	4,310	 	 	$	3,944	 	 	$	8,254	 	 	$	3,179	 	 	$	1,545	 	 	$	4,724	 	 	$	4,567	 	 	$	3,758	 	 	$	13,049	 	 	 	*	 	 	 	75	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic Earnings (Loss) per Common Share Attributable to Merck & Co., Inc. Common Shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from Continuing Operations	 	$	1.70	 	 	$	1.56	 	 	$	3.26	 	 	$	1.08	 	 	$	0.48	 	 	$	1.56	 	 	$	1.81	 	 	$	1.51	 	 	$	4.88	 	 	 	*	 	 	 	*	 	
Income (Loss) from Discontinued Operations	 	 	-	 	 	 	-	 	 	 	-	 	 	 	0.17	 	 	 	0.13	 	 	 	0.30	 	 	 	-	 	 	 	(0.02	)	 	 	0.28	 	 	 	*	 	 	 	*	 	
Net Income	 	$	1.70	 	 	$	1.56	 	 	$	3.26	 	 	$	1.26	 	 	$	0.61	 	 	$	1.87	 	 	$	1.81	 	 	$	1.49	 	 	$	5.16	 	 	 	*	 	 	 	74	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (Loss) per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from Continuing Operations	 	$	1.70	 	 	$	1.55	 	 	$	3.25	 	 	$	1.08	 	 	$	0.48	 	 	$	1.56	 	 	$	1.80	 	 	$	1.51	 	 	$	4.86	 	 	 	*	 	 	 	*	 	
Income (Loss) from Discontinued Operations	 	 	-	 	 	 	-	 	 	 	-	 	 	 	0.17	 	 	 	0.13	 	 	 	0.30	 	 	 	-	 	 	 	(0.02	)	 	 	0.28	 	 	 	*	 	 	 	*	 	
Net Income	 	$	1.70	 	 	$	1.55	 	 	$	3.25	 	 	$	1.25	 	 	$	0.61	 	 	$	1.86	 	 	$	1.80	 	 	$	1.48	 	 	$	5.14	 	 	 	*	 	 	 	75	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Shares Outstanding	 	 	2,528	 	 	 	2,531	 	 	 	2,529	 	 	 	2,531	 	 	 	2,533	 	 	 	2,532	 	 	 	2,530	 	 	 	2,527	 	 	 	2,530	 	 	 	 	 	 	 	 	 	
Average Shares Outstanding Assuming Dilution	 	 	2,537	 	 	 	2,540	 	 	 	2,538	 	 	 	2,541	 	 	 	2,540	 	 	 	2,540	 	 	 	2,536	 	 	 	2,535	 	 	 	2,538	 	 	 	 	 	 	 	 	 	
Tax Rate from Continuing Operations	 	 	11.4	%	 	 	12.0	%	 	 	11.7	%	 	 	8.0	%	 	 	29.3	%	 	 	15.8	%	 	 	13.2	%	 	 	2.2	%	 	 	11.0	%	 	 	 	 	 	 	 	 	
 
* 100% or greater                          
Sum of quarterly amounts may not equal year-to-date amounts due to rounding.                        

 
 
MERCK & CO., INC.
SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 2021 GAAP TO NON-GAAP RECONCILIATION - CONTINUING OPERATIONS
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE FIGURES)
(UNAUDITED)
Table 2b
 
In 2022, the company changed the treatment of certain items for purposes of its non-GAAP reporting.  Historically, Merck’s non-GAAP results excluded expenses for upfront and milestone payments related to collaborations and licensing agreements, as well as charges related to pre-approval assets obtained in transactions accounted for as asset acquisitions, to the extent the charges were considered by the company to be significant to the results of a particular period (as well as any related adjustments recorded in a subsequent period). Beginning in 2022, Merck’s non-GAAP results no longer exclude charges related to these items. Results for 2021 have been recast to conform to the new presentation.

The table below reflects a reconciliation of GAAP to non-GAAP financial information on a continuing operations basis. As Organon results are reflected within discontinued operations, they are excluded from the financial information provided below.

 	 	GAAP	 	 	Acquisition and Divestiture-
Related Costs (1)	 	 	Restructuring Costs (2)	 	 	(Income) Loss from
Investments in Equity
Securities	 	 	Certain Other Items	 	 	Adjustment Subtotal	 	Non-GAAP	 	
Second Quarter	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	3,104	 	 	345	 	 	38	 	 	 	 	 	37	(3)	 	420	 	$	2,684	 	
Selling, general and administrative	 	 	2,281	 	 	25	 	 	2	 	 	 	 	 	 	 	 	27	 	 	2,254	 	
Research and development	 	 	4,321	 	 	16	 	 	6	 	 	 	 	 	 	 	 	22	 	 	4,299	 	
Restructuring costs	 	 	82	 	 	 	 	 	82	 	 	 	 	 	 	 	 	82	 	 	-	 	
Other (income) expense, net	 	 	(103	)	 	117	 	 	 	 	 	(258	)	 	 	 	 	(141	)	 	38	 	
Income from Continuing Operations Before Taxes	 	 	1,717	 	 	(503	)	 	(128	)	 	258	 	 	(37	)	 	(410	)	 	2,127	 	
Income Tax Provision (Benefit)	 	 	503	 	 	(98	)(4)	 	(15	)(4)	 	57	(4)	 	(8	)(4)	 	(64	)	 	567	 	
Net Income from Continuing Operations	 	 	1,214	 	 	(405	)	 	(113	)	 	201	 	 	(29	)	 	(346	)	 	1,560	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	1,213	 	 	(405	)	 	(113	)	 	201	 	 	(29	)	 	(346	)	 	1,559	 	
Earnings per Common Share Assuming Dilution from Continuing Operations	 	$	0.48	 	 	(0.16	)	 	(0.04	)	 	0.08	 	 	(0.01	)	 	(0.13	)	$	0.61	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax Rate	 	 	29.3	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	26.7	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
June YTD	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost of sales	 	$	6,303	 	 	842	 	 	65	 	 	 	 	 	225	(3)	 	1,132	 	$	5,171	 	
Selling, general and administrative	 	 	4,468	 	 	35	 	 	4	 	 	 	 	 	 	 	 	39	 	 	4,429	 	
Research and development	 	 	6,732	 	 	34	 	 	13	 	 	 	 	 	 	 	 	47	 	 	6,685	 	
Restructuring costs	 	 	380	 	 	 	 	 	380	 	 	 	 	 	 	 	 	380	 	 	-	 	
Other (income) expense, net	 	 	(558	)	 	89	 	 	 	 	 	(819	)	 	 	 	 	(730	)	 	172	 	
Income from Continuing Operations Before Taxes	 	 	4,704	 	 	(1,000	)	 	(462	)	 	819	 	 	(225	)	 	(868	)	 	5,572	 	
Income Tax Provision (Benefit)	 	 	741	 	 	(187	)(4)	 	(56	)(4)	 	180	 (4)	 	(257	)(4)	 	(320	)	 	1,061	 	
Net Income from Continuing Operations	 	 	3,963	 	 	(813	)	 	(406	)	 	639	 	 	32	 	 	(548	)	 	4,511	 	
Net Income from Continuing Operations Attributable to Merck & Co., Inc.	 	 	3,958	 	 	(813	)	 	(406	)	 	639	 	 	32	 	 	(548	)	 	4,506	 	
Earnings per Common Share Assuming Dilution from Continuing Operations	 	$	1.56	 	 	(0.32	)	 	(0.16	)	 	0.25	 	 	0.02	 	 	(0.21	)	$	1.77	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax Rate	 	 	15.8	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	19.0	%	

Only the line items that are affected by non-GAAP adjustments are shown.
 
Merck is providing certain 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 non-GAAP information enhances investors’ understanding of the company’s results because management uses non-GAAP measures 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, senior management’s annual compensation is derived in part using a non-GAAP pretax income metric. The non-GAAP information presented should be considered in addition to, but not as a substitute for or superior to, information prepared in accordance with GAAP.
 
(1) Amounts included in cost of sales primarily reflect expenses for the amortization of intangible assets.  Amounts included in selling, general and administrative expenses reflect integration, transaction and certain other costs related to acquisitions and divestitures.  Amounts included in research and development expenses primarily reflect expenses for the amortization of intangible assets.  Amounts included in other (income) expense, net, for the second quarter and six month period primarily reflect an increase in the estimated fair value measurement of liabilities for contingent consideration related to the prior termination of the Sanofi-Pasteur MSD joint venture and a loss on a forward exchange contract entered into in conjunction with the Organon spin-off.  Amount included in other (income) expense, net, for the six month period was partially offset by royalty income related to the prior termination of the Sanofi-Pasteur MSD joint venture.
 
(2) Amounts primarily include employee separation costs and accelerated depreciation associated with facilities to be closed or divested related to activities under the company's formal restructuring programs.
 
(3) Represents charges for the discontinuation of COVID-19 development programs.
 
(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.  Certain other items for the six month period also includes a $207 million net tax benefit related to the settlement of certain federal income tax matters.

 

MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS
SECOND QUARTER 2022
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3a
 
 	 	Global	 	 	U.S.	 	 	International	 	
 	 	2Q 2022	 	 	2Q 2021	 	 	% Change	 	 	2Q 2022	 	 	2Q 2021	 	 	% Change	 	 	2Q 2022	 	 	2Q 2021	 	 	% Change	 	
TOTAL SALES (1)	 	$	14,593	 	 	$	11,402	 	 	 	28	 	 	$	6,238	 	 	$	5,100	 	 	 	22	 	 	$	8,355	 	 	$	6,301	 	 	 	33	 	
PHARMACEUTICAL	 	 	12,756	 	 	 	9,980	 	 	 	28	 	 	 	5,726	 	 	 	4,647	 	 	 	23	 	 	 	7,030	 	 	 	5,333	 	 	 	32	 	
Oncology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Keytruda	 	 	5,252	 	 	 	4,176	 	 	 	26	 	 	 	3,197	 	 	 	2,347	 	 	 	36	 	 	 	2,055	 	 	 	1,829	 	 	 	12	 	
Alliance Revenue - Lynparza (2)	 	 	275	 	 	 	248	 	 	 	11	 	 	 	143	 	 	 	124	 	 	 	15	 	 	 	132	 	 	 	124	 	 	 	7	 	
Alliance Revenue - Lenvima (2)	 	 	231	 	 	 	181	 	 	 	28	 	 	 	128	 	 	 	88	 	 	 	46	 	 	 	103	 	 	 	93	 	 	 	11	 	
Alliance Revenue - Reblozyl (3)	 	 	33	 	 	 	 	 	 	 	*	 	 	 	28	 	 	 	 	 	 	 	*	 	 	 	5	 	 	 	 	 	 	 	*	 	
Vaccines (4)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gardasil / Gardasil 9	 	 	1,674	 	 	 	1,234	 	 	 	36	 	 	 	428	 	 	 	454	 	 	 	-6	 	 	 	1,245	 	 	 	781	 	 	 	60	 	
ProQuad / M-M-R II / Varivax	 	 	578	 	 	 	516	 	 	 	12	 	 	 	434	 	 	 	386	 	 	 	13	 	 	 	143	 	 	 	130	 	 	 	10	 	
RotaTeq	 	 	173	 	 	 	208	 	 	 	-17	 	 	 	98	 	 	 	111	 	 	 	-11	 	 	 	75	 	 	 	97	 	 	 	-23	 	
Pneumovax 23	 	 	153	 	 	 	152	 	 	 	1	 	 	 	94	 	 	 	100	 	 	 	-6	 	 	 	59	 	 	 	52	 	 	 	14	 	
Vaqta	 	 	35	 	 	 	56	 	 	 	-38	 	 	 	16	 	 	 	22	 	 	 	-27	 	 	 	19	 	 	 	34	 	 	 	-45	 	
Hospital Acute Care	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bridion	 	 	426	 	 	 	387	 	 	 	10	 	 	 	237	 	 	 	197	 	 	 	20	 	 	 	190	 	 	 	190	 	 	 	-	 	
Prevymis	 	 	103	 	 	 	93	 	 	 	11	 	 	 	47	 	 	 	37	 	 	 	28	 	 	 	56	 	 	 	56	 	 	 	-	 	
Dificid	 	 	66	 	 	 	34	 	 	 	95	 	 	 	63	 	 	 	32	 	 	 	100	 	 	 	3	 	 	 	2	 	 	 	30	 	
Primaxin	 	 	64	 	 	 	60	 	 	 	6	 	 	 	 	 	 	 	 	 	 	 	174	 	 	 	64	 	 	 	60	 	 	 	6	 	
Noxafil	 	 	60	 	 	 	66	 	 	 	-8	 	 	 	16	 	 	 	14	 	 	 	11	 	 	 	45	 	 	 	52	 	 	 	-14	 	
Zerbaxa	 	 	46	 	 	 	(1	)	 	 	*	 	 	 	22	 	 	 	(2	)	 	 	*	 	 	 	24	 	 	 	1	 	 	 	*	 	
Invanz	 	 	46	 	 	 	48	 	 	 	-3	 	 	 	2	 	 	 	(4	)	 	 	-139	 	 	 	45	 	 	 	52	 	 	 	-13	 	
Cancidas	 	 	42	 	 	 	54	 	 	 	-23	 	 	 	2	 	 	 	1	 	 	 	*	 	 	 	39	 	 	 	53	 	 	 	-26	 	
Cardiovascular	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Alliance Revenue - Adempas/Verquvo (5)	 	 	98	 	 	 	74	 	 	 	33	 	 	 	88	 	 	 	81	 	 	 	9	 	 	 	10	 	 	 	(7	)	 	 	*	 	
Adempas (6)	 	 	63	 	 	 	74	 	 	 	-14	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	63	 	 	 	74	 	 	 	-14	 	
Virology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lagevrio	 	 	1,177	 	 	 	 	 	 	 	*	 	 	 	 	 	 	 	 	 	 	 	*	 	 	 	1,177	 	 	 	 	 	 	 	*	 	
Isentress / Isentress HD	 	 	147	 	 	 	192	 	 	 	-24	 	 	 	67	 	 	 	74	 	 	 	-10	 	 	 	80	 	 	 	118	 	 	 	-32	 	
Neuroscience	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belsomra	 	 	69	 	 	 	78	 	 	 	-12	 	 	 	19	 	 	 	14	 	 	 	34	 	 	 	50	 	 	 	63	 	 	 	-22	 	
Immunology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Simponi	 	 	181	 	 	 	202	 	 	 	-10	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	181	 	 	 	202	 	 	 	-10	 	
Remicade	 	 	53	 	 	 	75	 	 	 	-29	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	53	 	 	 	75	 	 	 	-29	 	
Diabetes (7)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Januvia	 	 	756	 	 	 	784	 	 	 	-4	 	 	 	301	 	 	 	284	 	 	 	6	 	 	 	455	 	 	 	500	 	 	 	-9	 	
Janumet	 	 	476	 	 	 	477	 	 	 	-	 	 	 	105	 	 	 	74	 	 	 	43	 	 	 	371	 	 	 	403	 	 	 	-8	 	
Other Pharmaceutical (8)	 	 	479	 	 	 	512	 	 	 	-6	 	 	 	191	 	 	 	213	 	 	 	-10	 	 	 	288	 	 	 	299	 	 	 	-4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ANIMAL HEALTH	 	 	1,467	 	 	 	1,472	 	 	 	-	 	 	 	477	 	 	 	459	 	 	 	4	 	 	 	990	 	 	 	1,012	 	 	 	-2	 	
Livestock	 	 	826	 	 	 	821	 	 	 	1	 	 	 	164	 	 	 	161	 	 	 	2	 	 	 	662	 	 	 	659	 	 	 	-	 	
Companion Animals	 	 	641	 	 	 	651	 	 	 	-2	 	 	 	313	 	 	 	298	 	 	 	5	 	 	 	328	 	 	 	353	 	 	 	-7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Revenues (9)	 	 	370	 	 	 	(50	)	 	 	*	 	 	 	35		 	 	(6	)	 	 	*	 	 	 	335	 	 	 	(44	)	 	 	*	 	
 
* 200% or greater
 
Sum of U.S. plus international may not equal global due to rounding.

(1) Only select products are shown.  
 
(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.
 
(3) Alliance Revenue represents royalties.
 
(4) Total Vaccines sales were $2,709 million in the second quarter of 2022 and $2,293 million in the second quarter of 2021.
 
(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.
 
(6) Net product sales in Merck's marketing territories.
 
(7) Total Diabetes sales were $1,300 million in the second quarter of 2022 and $1,330 million in the second quarter of 2021.
 
(8) Includes Pharmaceutical products not individually shown above.
 
(9) Other Revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. Other Revenues related to the receipt of milestone payments for out-licensed products were $32 million in the second quarter of 2022.

 

 
 
MERCK & CO., INC.
FRANCHISE / KEY PRODUCT SALES - CONTINUING OPERATIONS
JUNE YEAR-TO-DATE 2022
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3b
 
 	 	Global	 	 	U.S.	 	 	International	 	
 	 	June YTD
2022	 	 	June YTD
2021	 	 	% Change	 	 	June YTD
2022	 	 	June YTD
2021	 	 	% Change	 	 	June YTD
2022	 	 	June YTD
2021	 	 	% Change	 	
TOTAL SALES (1)	 	$	30,494	 	 	$	22,029	 	 	 	38	 	 	$	13,577	 	 	$	9,890	 	 	 	37	 	 	$	16,917	 	 	$	12,139	 	 	 	39	 	
PHARMACEUTICAL	 	 	26,863	 	 	 	19,218	 	 	 	40	 	 	 	12,498	 	 	 	8,941	 	 	 	40	 	 	 	14,364	 	 	 	10,277	 	 	 	40	 	
Oncology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Keytruda	 	 	10,061	 	 	 	8,076	 	 	 	25	 	 	 	5,976	 	 	 	4,528	 	 	 	32	 	 	 	4,085	 	 	 	3,548	 	 	 	15	 	
Alliance Revenue - Lynparza (2)	 	 	541	 	 	 	475	 	 	 	14	 	 	 	283	 	 	 	242	 	 	 	17	 	 	 	257	 	 	 	233	 	 	 	10	 	
Alliance Revenue - Lenvima (2)	 	 	459	 	 	 	310	 	 	 	48	 	 	 	284	 	 	 	173	 	 	 	64	 	 	 	175	 	 	 	137	 	 	 	27	 	
Alliance Revenue - Reblozyl (3)	 	 	86	 	 	 	 	 	 	 	*	 	 	 	55	 	 	 	 	 	 	 	*	 	 	 	30	 	 	 	 	 	 	 	*	 	
Vaccines (4)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gardasil / Gardasil 9	 	 	3,133	 	 	 	2,151	 	 	 	46	 	 	 	846	 	 	 	766	 	 	 	10	 	 	 	2,287	 	 	 	1,385	 	 	 	65	 	
ProQuad / M-M-R II / Varivax	 	 	1,047	 	 	 	965	 	 	 	9	 	 	 	805	 	 	 	718	 	 	 	12	 	 	 	243	 	 	 	246	 	 	 	-2	 	
RotaTeq	 	 	389	 	 	 	366	 	 	 	6	 	 	 	273	 	 	 	229	 	 	 	19	 	 	 	116	 	 	 	137	 	 	 	-16	 	
Pneumovax 23	 	 	325	 	 	 	323	 	 	 	1	 	 	 	212	 	 	 	173	 	 	 	22	 	 	 	114	 	 	 	150	 	 	 	-24	 	
Vaqta	 	 	71	 	 	 	90	 	 	 	-21	 	 	 	45	 	 	 	47	 	 	 	-4	 	 	 	25	 	 	 	43	 	 	 	-40	 	
Hospital Acute Care	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bridion	 	 	821	 	 	 	727	 	 	 	13	 	 	 	432	 	 	 	364	 	 	 	19	 	 	 	389	 	 	 	363	 	 	 	7	 	
Prevymis	 	 	197	 	 	 	174	 	 	 	13	 	 	 	87	 	 	 	72	 	 	 	21	 	 	 	110	 	 	 	103	 	 	 	7	 	
Primaxin	 	 	122	 	 	 	125	 	 	 	-2	 	 	 	1	 	 	 	 	 	 	 	*	 	 	 	122	 	 	 	125	 	 	 	-2	 	
Dificid	 	 	119	 	 	 	61	 	 	 	95	 	 	 	113	 	 	 	56	 	 	 	100	 	 	 	6	 	 	 	4	 	 	 	38	 	
Noxafil	 	 	118	 	 	 	133	 	 	 	-11	 	 	 	25	 	 	 	29	 	 	 	-13	 	 	 	92	 	 	 	104	 	 	 	-11	 	
Invanz	 	 	99	 	 	 	104	 	 	 	-5	 	 	 	2	 	 	 	 	 	 	 	*	 	 	 	96	 	 	 	104	 	 	 	-7	 	
Cancidas	 	 	95	 	 	 	111	 	 	 	-15	 	 	 	4	 	 	 	3	 	 	 	15	 	 	 	91	 	 	 	108	 	 	 	-16	 	
Zerbaxa	 	 	76	 	 	 	(9	)	 	 	*	 	 	 	40	 	 	 	(4	)	 	 	*	 	 	 	36	 	 	 	(5	)	 	 	*	 	
Cardiovascular	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Alliance Revenue - Adempas/Verquvo (5)	 	 	170	 	 	 	149	 	 	 	14	 	 	 	159	 	 	 	149	 	 	 	7	 	 	 	11	 	 	 	 	 	 	 	*	 	
Adempas (6)	 	 	124	 	 	 	129	 	 	 	-4	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	124	 	 	 	129	 	 	 	-4	 	
Virology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lagevrio	 	 	4,424	 	 	 	 	 	 	 	*	 	 	 	1,523	 	 	 	 	 	 	 	*	 	 	 	2,901	 	 	 	 	 	 	 	*	 	
Isentress / Isentress HD	 	 	305	 	 	 	401	 	 	 	-24	 	 	 	128	 	 	 	145	 	 	 	-12	 	 	 	177	 	 	 	256	 	 	 	-31	 	
Neuroscience	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Belsomra	 	 	137	 	 	 	157	 	 	 	-13	 	 	 	39	 	 	 	32	 	 	 	22	 	 	 	98	 	 	 	125	 	 	 	-22	 	
Immunology	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Simponi	 	 	366	 	 	 	416	 	 	 	-12	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	366	 	 	 	416	 	 	 	-12	 	
Remicade	 	 	114	 	 	 	160	 	 	 	-29	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	114	 	 	 	160	 	 	 	-29	 	
Diabetes (7)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Januvia	 	 	1,535	 	 	 	1,593	 	 	 	-4	 	 	 	626	 	 	 	632	 	 	 	-1	 	 	 	909	 	 	 	961	 	 	 	-5	 	
Janumet	 	 	931	 	 	 	962	 	 	 	-3	 	 	 	168	 	 	 	158	 	 	 	7	 	 	 	762	 	 	 	805	 	 	 	-5	 	
Other Pharmaceutical (8)	 	 	998	 	 	 	1,069	 	 	 	-7	 	 	 	372	 	 	 	429	 	 	 	-13	 	 	 	628	 	 	 	640	 	 	 	-2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
ANIMAL HEALTH	 	 	2,949	 	 	 	2,890	 	 	 	2	 	 	 	951	 	 	 	896	 	 	 	6	 	 	 	1,998	 	 	 	1,994	 	 	 	-	 	
Livestock	 	 	1,658	 	 	 	1,640	 	 	 	1	 	 	 	335	 	 	 	318	 	 	 	6	 	 	 	1,322	 	 	 	1,322	 	 	 	-	 	
Companion Animals	 	 	1,291	 	 	 	1,250	 	 	 	3	 	 	 	616	 	 	 	578	 	 	 	7	 	 	 	676	 	 	 	672	 	 	 	-	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Revenues (9)	 	 	682	 	 	 	(79	)	 	 	*	 	 	 	128	 	 	 	53	 	 	 	142	 	 	 	555	 	 	 	(132	)	 	 	*	 	
 
* 200% or greater                  
Sum of U.S. plus international may not equal global due to rounding.                
(1) Only select products are shown.  
(2) Alliance Revenue represents Merck’s share of profits, which are product sales net of cost of sales and commercialization costs.
(3) Alliance Revenue represents royalties and a milestone payment.
(4) Total Vaccines sales were $5,191 million and $4,102 million on a global basis for June YTD 2022 and 2021, respectively.
(5) Alliance Revenue represents Merck's share of profits from sales in Bayer's marketing territories, which are product sales net of cost of sales and commercialization costs.
(6) Net product sales in Merck's marketing territories.
(7) Total Diabetes sales were $2,605 million and $2,693 million on a global basis for June YTD 2022 and 2021, respectively.
(8) Includes Pharmaceutical products not individually shown above.
(9) Other Revenues are comprised primarily of third-party manufacturing sales and miscellaneous corporate revenues, including revenue hedging activities. Other Revenues related to the receipt of upfront and milestone payments for out-licensed products were $146 million and $56 million on a global basis for June YTD 2022 and 2021, respectively.    

 

MERCK & CO., INC.
PHARMACEUTICAL GEOGRAPHIC SALES - CONTINUING OPERATIONS
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 3c
 
 	 	2022	 	 	2021	 	 	% Change	 	
 	 	1Q	 	 	2Q	 	 	June YTD	 	 	1Q	 	 	2Q	 	 	June YTD	 	 	3Q	 	 	4Q	 	 	Full Year	 	 	2Q	 	 	June YTD	 	
TOTAL PHARMACEUTICAL	 	$	14,107	 	 	$	12,756	 	 	$	26,863	 	 	$	9,238	 	 	$	9,980	 	 	$	19,218	 	 	$	11,496	 	 	$	12,039	 	 	$	42,754	 	 	 	28	 	 	 	40	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
United States	 	 	6,773	 	 	 	5,726	 	 	 	12,499	 	 	 	4,294	 	 	 	4,647	 	 	 	8,941	 	 	 	5,670	 	 	 	5,790	 	 	 	20,401	 	 	 	23	 	 	 	40	 	
% Pharmaceutical Sales	 	 	48.0	%	 	 	44.9	%	 	 	46.5	%	 	 	46.5	%	 	 	46.6	%	 	 	46.5	%	 	 	49.3	%	 	 	48.1	%	 	 	47.7	%	 	 	 	 	 	 	 	 	
Europe (1)	 	 	3,309	 	 	 	2,677	 	 	 	5,986	 	 	 	2,276	 	 	 	2,404	 	 	 	4,680	 	 	 	2,445	 	 	 	2,655	 	 	 	9,780	 	 	 	11	 	 	 	28	 	
% Pharmaceutical Sales	 	 	23.5	%	 	 	21.0	%	 	 	22.3	%	 	 	24.6	%	 	 	24.1	%	 	 	24.4	%	 	 	21.3	%	 	 	22.1	%	 	 	22.9	%	 	 	 	 	 	 	 	 	
China	 	 	1,113	 	 	 	1,355	 	 	 	2,468	 	 	 	688	 	 	 	944	 	 	 	1,632	 	 	 	1,278	 	 	 	1,352	 	 	 	4,262	 	 	 	44	 	 	 	51	 	
% Pharmaceutical Sales	 	 	7.9	%	 	 	10.6	%	 	 	9.2	%	 	 	7.4	%	 	 	9.5	%	 	 	8.5	%	 	 	11.1	%	 	 	11.2	%	 	 	10.0	%	 	 	 	 	 	 	 	 	
Japan	 	 	965	 	 	 	1,092	 	 	 	2,057	 	 	 	607	 	 	 	637	 	 	 	1,244	 	 	 	614	 	 	 	771	 	 	 	2,629	 	 	 	71	 	 	 	65	 	
% Pharmaceutical Sales	 	 	6.8	%	 	 	8.6	%	 	 	7.7	%	 	 	6.6	%	 	 	6.4	%	 	 	6.5	%	 	 	5.3	%	 	 	6.4	%	 	 	6.1	%	 	 	 	 	 	 	 	 	
Asia Pacific (other than China and Japan)	 	 	786	 	 	 	854	 	 	 	1,640	 	 	 	437	 	 	 	442	 	 	 	879	 	 	 	450	 	 	 	488	 	 	 	1,817	 	 	 	93	 	 	 	87	 	
% Pharmaceutical Sales	 	 	5.6	%	 	 	6.7	%	 	 	6.1	%	 	 	4.7	%	 	 	4.4	%	 	 	4.6	%	 	 	3.9	%	 	 	4.1	%	 	 	4.2	%	 	 	 	 	 	 	 	 	
Latin America	 	 	435	 	 	 	453	 	 	 	888	 	 	 	353	 	 	 	379	 	 	 	732	 	 	 	434	 	 	 	421	 	 	 	1,587	 	 	 	20	 	 	 	21	 	
% Pharmaceutical Sales	 	 	3.1	%	 	 	3.6	%	 	 	3.3	%	 	 	3.8	%	 	 	3.8	%	 	 	3.8	%	 	 	3.8	%	 	 	3.5	%	 	 	3.7	%	 	 	 	 	 	 	 	 	
Eastern Europe/Middle East/Africa	 	 	450	 	 	 	339	 	 	 	789	 	 	 	357	 	 	 	318	 	 	 	675	 	 	 	362	 	 	 	278	 	 	 	1,315	 	 	 	7	 	 	 	17	 	
% Pharmaceutical Sales	 	 	3.2	%	 	 	2.7	%	 	 	2.9	%	 	 	3.9	%	 	 	3.2	%	 	 	3.5	%	 	 	3.1	%	 	 	2.3	%	 	 	3.1	%	 	 	 	 	 	 	 	 	
Canada	 	 	189	 	 	 	166	 	 	 	354	 	 	 	160	 	 	 	157	 	 	 	318	 	 	 	164	 	 	 	167	 	 	 	650	 	 	 	5	 	 	 	12	 	
% Pharmaceutical Sales	 	 	1.3	%	 	 	1.3	%	 	 	1.3	%	 	 	1.7	%	 	 	1.6	%	 	 	1.7	%	 	 	1.4	%	 	 	1.4	%	 	 	1.5	%	 	 	 	 	 	 	 	 	
Other	 	 	87	 	 	 	94	 	 	 	182	 	 	 	66	 	 	 	52	 	 	 	117	 	 	 	79	 	 	 	117	 	 	 	313	 	 	 	81	 	 	 	56	 	
% Pharmaceutical Sales	 	 	0.6	%	 	 	0.6	%	 	 	0.7	%	 	 	0.8	%	 	 	0.4	%	 	 	0.5	%	 	 	0.8	%	 	 	0.9	%	 	 	0.8	%	 	 	 	 	 	 	 	 	
 
Sum of quarterly amounts may not equal year-to-date amounts due to rounding.    
 
(1) Europe represents all European Union countries, the European Union accession markets and the United Kingdom.    

 

MERCK & CO., INC.
OTHER (INCOME) EXPENSE, NET - GAAP
(AMOUNTS IN MILLIONS)
(UNAUDITED)
Table 4
 
OTHER (INCOME) EXPENSE, NET
 
 	 	2Q22	 	 	2Q21	 	 	June YTD
2022	 	 	June YTD
2021	 	
Interest income	 	$	(15	)	 	$	(9	)	 	$	(22	)	 	$	(20	)	
Interest expense	 	 	240	 	 	 	202	 	 	 	483	 	 	 	401	 	
Exchange losses	 	 	86	 	 	 	114	 	 	 	124	 	 	 	155	 	
Loss (income) from investments in equity securities, net (1)	 	 	284	 	 	 	(280	)	 	 	991	 	 	 	(854	)	
Net periodic defined benefit plan (credit) cost other than service cost	 	 	(27	)	 	 	(110	)	 	 	(148	)	 	 	(199	)	
Other, net	 	 	(130	)	 	 	(20	)	 	 	(280	)	 	 	(41	)	
Total	 	$	438	 	 	$	(103	)	 	$	1,148	 	 	$	(558	)	
 
(1) Includes net realized and unrealized gains and losses from investments in equity securities either owned directly or through ownership interests in investment funds.  Unrealized gains and losses from investments that are directly owned are determined at the end of the reporting period, while gains and losses from ownership interests in investment funds are accounted for on a one quarter lag.