MRK
#Good morning, everyone
This morning I'll provide highlights in Global Human Health performance for the first quarter of 2017, and my comments will be on a constant currency basis
We are off to a solid start for the year
Global Human Health sales of $8.2 billion increased 2%, with growth from launched products including KEYTRUDA, BRIDION, and ZEPATIER, as well as our broad portfolio of vaccines, which more than offset the impact of LOEs in the U.S
We had a strong quarter outside the U.S
, with growth of 7%
I'll now highlight a few of our key franchises and product launches, and I'll start with oncology
We continue to execute on the significant opportunity we see with KEYTRUDA and our global leadership position in immuno-oncology
Global sales in the first quarter were $584 million, which represents significant growth versus the first quarter of last year, including U.S
growth of approximately 170%
In the United States, KEYTRUDA growth was driven by the launch in first-line lung, as well as the rapid penetration of head and neck cancer and continued strength in melanoma
After seeing a significant increase in PD-L1 testing following our first-line lung approval in the fourth quarter, we are starting to see that translate into demand
In fact, the vast majority of patients as defined by our label are already being prescribed KEYTRUDA
Based on IMS brand impact new patient data, KEYTRUDA is now the most prescribed product in the first-line-lung setting
In addition, our second-line-lung share has been relatively stable, and we're working to grow that share with our expanded indication into all PD-L1 positive patients
Outside of the United States, melanoma continues to drive the majority of KEYTRUDA sales with approvals in almost 60 countries
We're now working through the reimbursement process for both first-line and second-line lung, so anticipate lung will become a much larger contributor outside of the U.S
as we progress through the year
Now I'll move to primary care
Global sales for JANUVIA franchise reached $1.3 billion and experienced a decline of 5% in the quarter driven by the U.S
We continue to see good TRx growth of approximately 3% in the U.S
; however, as we mentioned previously, the timing of customer buying makes a difficult comparison versus last year
JANUVIA continues to maintain DPP-4 leadership with more than a 70% market share in the U.S
and 65% market share globally
We remain confident in the diabetes franchise and look forward to expanding the franchise with our SGLT2 and SGLT2 combination with JANUVIA which we filed in the first quarter of this year
Moving to vaccines, sales reached $1.5 billion and grew 21%, primarily driven by increases in GARDASIL and PNEUMOVAX
The addition of approximately $65 million of sales from the terminated vaccine joint venture with Sanofi, most of which was GARDASIL, also contributed to growth
Global GARDASIL sales grew 41% this quarter, also on strength in the U.S
and emerging markets
, GARDASIL sales growth of 25% reflects increased demand as well as timing of CDC purchases of approximately $45 million
We've continued to monitor the negative impact of the transition to a two-dose regimen in the U.S
PNEUMOVAX sales increased 52% in the quarter
Growth was driven by another strong quarter in the U.S
, where we continue to benefit from adoption of the ACIP recommendation for patients 65 and older
Moving now to hospital and specialty care
We continue to execute well on the launches of both ZEPATIER and BRIDION
ZEPATIER generated $378 million in sales for the quarter
We have seen rapid uptake in Europe and Japan since ZEPATIER's launch in late 2016, while we remain encouraged by initial feedback from physicians, payers and scientific leaders
In the U.S
, we continue to drive share gains for ZEPATIER across public and private payer segments
Sales in the quarter also reflect an approximately $40 million favorable adjustment to rebate accruals
BRIDION delivered another strong quarter with growth of more than 60%
We continue to see strong uptake from the launch in the U.S
, as well as growth in underlying demand in Europe and the emerging markets
As of this quarter, the U.S
represents the largest market for BRIDION sales
In conclusion, this quarter we had to contend with a nearly $700 million decline in sales due to LOEs
We anticipate further erosion from these products in 2017, but as we did in the first quarter, we will continue to look for opportunities to offset these losses with strength from across our broad portfolio of products and from our multiple new-product launches, which are each off to a very strong start
Now I'll turn the call over to <UNK>
Hi, Geoff
This is <UNK>
So let me start by saying we're pleased with the progress that we have with KEYTRUDA across indications including lung
And if you look at what we've done with our proved indication, the vast majority of patients within our indication are already being prescribed KEYTRUDA for first-line lung, and KEYTRUDA's now the most prescribed drug for first-line lung in the marketplace
As we start to think about KEYNOTE-021G, first of all, it obviously expands the market opportunity in nonsquamous patients and it also includes patients with low or no PD-L1 expression, so basically, it opens up the rest of the market
But with that said, there's a couple other things to consider
First of all, we believe that physicians will look at individual patients and decide whether or not combination therapy is right to start those patients
So if you have a younger patient that's relatively healthy, they might think about treating that patient with combo differently than if they have an older patient that's more complicated
In addition to that, we believe that, since we've studied the drug with ALIMTA, that early adoption will probably be used where physicians would use ALIMTA
Over time that'll expand, we believe, to other chemotherapies as the physicians start to see the results with the combination that we studied
So, in summary, we believe it's a very significant opportunity
It's not a pent-up demand
I would look at it as a build as new patients come into the market and I think that it really is exciting opportunity for lung cancer patients, but also to establish KEYTRUDA further as a real preferred treatment therapy
Yeah, so this is <UNK>
First of all, we're pleased with the progress of KEYTRUDA and the $584 million in sales
If you look at the U.S
which is the first market where we're really launching lung because we're still working on reimbursement outside the U.S
, and we saw a 170% increase versus the same quarter prior-year
And if you look at quarter-over-quarter growth and you adjust it for the $40 million that we told you about last quarter, you had over 30% quarter-over-quarter growth in the United States
And if you look at the data from simply (33:18) other areas, you would've gotten to about the number that we achieved
In addition to that, to provide additional context, if you look at the sales in the United States, right now about 40% of it is coming from lung
So you've seen a very significant increase in the amount of sales coming from the lung indication and in fact the first quarter of this year is the first quarter in which lung is the largest percent of our total sales
So we remain optimistic about the progress with KEYTRUDA
We think that there are opportunities to continue to grow with all the indications that we have and we'll look forward to seeing what happens with 021G
And, Jami, if you look at the share, it's about 25% in non-small lung cancer
And as I said in my remarks, I think that it'll start off with physicians using it within whatever the indication is
So if it's with ALIMTA, they'll use it with ALIMTA
We'll obviously continue to promote based upon the label that we have
I do believe that over time, physicians will begin to use it with other chemotherapy, irrespective of label
But again, that's nothing that we would promote
And then if you look at GARDASIL, we had $530 million of sales
The two things I'd point out is one, there's about $45 million of CDC purchases in the quarter, that was due to timing; the second thing is, there's about $50 million of sales from Europe because we dissolved the joint venture with Sanofi
Outside of those two things, I would say demand remains strong, and we continue to see increased penetration rates, not just in males, but even in females as well
And right now, Tony, our market share is greater than 90% globally, almost 100% in the United States
So we remain optimistic about demand
To me, the key thing is, is what happens with the two-dose regimen
So we're seeing increased demand right now, a lot of people getting their first doses
The question will be, do they come back for their second dose in six months? Or will it be next year, a year later? And we still have to wait to see how the two doses plays out
Yep
So for HCV, we continue to see good progress with ZEPATIER and we saw it, not just in the U.S
, but we've seen good progress in Europe, but also in Japan
As you look at the HCV market, there's no doubt that it's a large market and it's a large opportunity, but it's going to play out over many years
And as we look at the market, we see a reduction in number of patients being treated this year versus last year, and we think that that's going to continue to be difficult, as it's harder to get new patients into the market
Many of the tough-to-treat patients or those that were already previously diagnosed have been treated
Although there's still a lot of patients, we have to work harder to get those patients into the buying process
That's particularly true in the United States, but it's also true in country like Japan, where there's less patients each and every year, and there's not a lot of new patients coming into the Japanese market
So with that, we believe that it's still a significant opportunity
As we look at increased competition, we'll have to see what final labels look like, and we'll have to see pricing strategies and those types of things, but my expectation is that this continues to be a large market, albeit a declining market
Let me give you some additional context on KEYTRUDA
So first of all, we're seeing pretty broad adoption
As I mentioned, the vast majority of patients within our approved indication for lung cancer are being treated
So that tells you it has to be both an academic but also outside of academic centers
So for our first line share to be what it is, you would have to see pretty broad utilization
And if you look now, melanoma is 30% of our total sales but head and neck is also 15% of our sales
So we're seeing increased utilization in head and neck as well, which we're seeing fairly broad-based for physicians that treat that type of cancer
In addition to that, as you look at what we're seeing, physicians are using the products primarily based upon the indications we have
In terms of looking at the dosing regimens, I do think we may have an advantage there with our dosing regimen and scheduling versus competition
But it really is about efficacy
It's about what indications that you have and it's about ensuring the appropriate utilization based on your indications
And I think that's what's allowing us to win in the marketplace as we sit here today
Yeah, so <UNK>, as you look at the utilization of KEYTRUDA in the U.S, and this is, again, a rough estimate with the data that we have, about 40% is lung, 30% melanoma, 15% head and neck and then 15% is all other utilization of the product
And if you look at PD-L1 testing, the vast majority of patients are being tested somewhere between 75% to 80% in the United States
If you look at our share in first-line lung, our share is about – if you look at early data, one in four patients or so are being treated for first-line setting
And then if you look at second-line lung patients, we have a share of about 15% which has been pretty stable over time
Outside the U.S, PD-L1 testing is increasing significantly
In Japan, it's remarkable how fast they've begun to adopt PD-L1 testing and frankly, even in Europe, about two thirds of physicians are already testing PD-L1 including about 80% in Germany and 60% or so in the U.K
So we're seeing PD-L1 testing pick up around the world, frankly
