Patrick Ryan Investor Contacts: Peter Dannenbaum (973) 275-7075 (908) 740-1037 Melissa Moody Raychel Kruper (215) 407-3536 (908) 740-2107 Merck Announces Third-Quarter 2021 Financial

FOR IMMEDIATE RELEASE

Merck Announces Third-Quarter 2021 Financial Results

KENILWORTH, N.J., Oct. 28, 2021 - Merck (NYSE: MRK), known as MSD outside the United States and Canada, today announced financial results for the third quarter of 2021.

"Merck delivered another strong quarter with positive momentum across our business and meaningful progress across our pipeline. Our teams continued to excel as we focus on evolving our operations, while driving innovations in our labs that exemplify the best of Merck science," said Robert M. Davis, chief executive officer and president, Merck. "We achieved notable clinical milestones in the key areas of oncology and COVID-19, including positive Phase 3 results for molnupiravir. We recently announced our proposed acquisition of Acceleron, which will strengthen our cardiovascular portfolio with complementary, cutting-edge science and an exciting late-stage candidate. Looking ahead, we remain focused on building more momentum, delivering on our mission of saving and improving lives and continuing to expand our portfolio and pipeline for long-term success and sustainable value creation."

Financial Summary - Continuing Operations

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.

*Refer to table on page 13.

GAAP (generally accepted accounting principles) earnings per share assuming dilution (EPS) was $1.80 for the third quarter of 2021. Non-GAAP EPS of $1.75 for the third quarter of 2021 excludes acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items. Year-to-date results can be found in the attached tables.

Strong Performance Across the Business

Merck achieved strong performance across its key pillars of Oncology, Vaccines, and Animal Health, led by highly innovative products, including KEYTRUDA (pembrolizumab), Lynparza (olaparib), Lenvima (lenvatinib), GARDASIL [Human Papillomavirus Quadrivalent (Types 6, 11, 16, and 18) Vaccine, Recombinant], GARDASIL 9 (Human Papillomavirus 9-valent Vaccine, Recombinant) and the BRAVECTO (fluralaner) line of products. In addition, BRIDION (sugammadex) injection 100 mg/mL saw strong growth in the quarter. The company continues to benefit from strong underlying demand for its products, as well as broad commercial scale and improved patient access to its innovative medicines across the globe.

1 Net income from continuing operations attributable to Merck & Co., Inc.

2 Merck is providing certain 2021 and 2020 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 and permits investors to understand how management assesses performance. Management uses these 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 non-GAAP pretax income. 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.

Merck Reported Positive Phase 3 Results for Molnupiravir, an Investigational Oral Antiviral COVID-19 Treatment

Merck and Ridgeback Biotherapeutics announced positive results from the interim analysis of the Phase 3 MOVe-OUT trial of investigational oral antiviral therapeutic molnupiravir (MK-4482/EIDD-2801) in at-risk, non-hospitalized adult patients with mild-to-moderate COVID-19. The company announced on Oct. 11, 2021, the submission of an application for Emergency Use Authorization (EUA) to the U.S. Food and Drug Administration (FDA) based on these findings and plans to submit marketing applications to other regulatory bodies worldwide. If authorized or approved, Merck anticipates that molnupiravir can become an important treatment as part of the global effort to fight the COVID-19 pandemic. On Oct. 14, 2021, the FDA announced a Nov. 30, 2021, meeting of its Antimicrobial Drugs Advisory Committee to discuss the available data supporting the use of molnupiravir to treat at-risk adults with mild-to-moderate COVID-19. On Oct. 25, 2021, the European Medicines Agency (EMA) initiated a rolling review for molnupiravir for the treatment of COVID-19 in adults. Merck plans to work with the EMA's Committee for Medicinal Products for Human Use (CHMP) to complete the rolling review process to facilitate initiating the formal review of the Marketing Authorization Application.

Merck is committed to providing timely access to molnupiravir globally, if it is authorized or approved, and plans to implement a tiered pricing approach based on World Bank country income criteria to reflect countries' relative ability to finance their pandemic response and health systems. Merck has entered into non-exclusive voluntary licensing agreements with established generic manufacturers in India for molnupiravir. Additionally, Merck and the Medicines Patent Pool (MPP) jointly announced the signing of a voluntary licensing agreement to facilitate access to generic molnupiravir, upon local regulatory authorization. These agreements will help expand access to molnupiravir in more than 100 low- and middle-income countries.

Merck has entered into supply and purchase commitments for molnupiravir with several governments worldwide, including Australia, New Zealand, South Korea, the U.K. and the U.S., pending regulatory authorization, and is currently in discussions with other governments. The company expects to produce 10 million courses of treatment by the end of 2021, with at least 20 million additional courses expected to be produced in 2022.

Planned Acquisition of Acceleron Bolsters Innovation and Broadens Cardiovascular Pipeline

Merck announced a definitive agreement and tender offer to acquire Acceleron Pharma Inc. (Acceleron). The planned acquisition complements and strengthens Merck's cardiovascular pipeline with Acceleron's lead therapeutic candidate, sotatercept, a potentially first-in-class therapy in Phase 3 clinical trials for the treatment of pulmonary arterial hypertension. Merck commenced a tender offer on Oct. 12, 2021, and upon successful completion of the tender offer and receipt of necessary regulatory approvals, Merck, through a subsidiary, will acquire Acceleron for $180 per share in cash for an approximate total equity value of $11.5 billion. The transaction is expected to close in the fourth quarter of 2021.

Oncology Program Highlights

Merck continued to advance development programs across its oncology portfolio, anticipating more than 90 potential new indications by 2028, including notable progress for KEYTRUDA, the company's anti-PD-1 therapy; Lynparza, an oral poly (ADP-ribose) polymerase (PARP) inhibitor being co-developed and co-commercialized with AstraZeneca; Lenvima, an orally available tyrosine kinase inhibitor (TKI) being co-developed and co-commercialized with Eisai Co., Ltd. (Eisai); and WELIREG (belzutifan), an oral hypoxia-inducible factor-2 alpha inhibitor (HIF-2 ).

Other Highlights

Infectious Diseases

Third-Quarter Revenue Performance

The following table reflects sales of the company's top pharmaceutical products, as well as sales of Animal Health products.

*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. Other revenues in the third quarter of 2021 include $135 million

related to the receipt of a milestone payment for an out-licensed product.

Pharmaceutical Revenue

Third-quarter pharmaceutical sales increased 18% to $11.5 billion, compared to the third quarter of 2020. Excluding the favorable effect of foreign exchange, sales grew by 17%, reflecting strength in the company's oncology and vaccine businesses.

Growth in oncology was largely driven by higher sales of KEYTRUDA, which rose 22% to $4.5 billion in the quarter. Global sales growth of KEYTRUDA reflects continued strong momentum from the non-small-cell lung cancer indications as well as uptake in other indications, including RCC, head and neck squamous cell carcinoma, TNBC and MSI-H cancers. Also contributing to higher sales in oncology was a 25% increase in Lynparza alliance revenue, primarily reflecting continued uptake in the United States and Europe, as well as a 32% increase in Lenvima alliance revenue, driven primarily by higher demand in the United States and China.

Growth in vaccines for the third quarter was primarily driven by higher combined sales of GARDASIL and GARDASIL 9, vaccines to prevent certain cancers and other diseases caused by HPV. Third-quarter 2021 GARDASIL/GARDASIL 9 sales grew 68% to $2.0 billion, primarily driven by strong global demand, particularly in China, which also benefitted from increased supply, as well as in the United States, which also benefitted from the timing of public sector purchases.

Combined sales of pediatric vaccines VARIVAX (Varicella Virus Vaccine Live), a vaccine to help prevent chickenpox; PROQUAD (Measles, Mumps, Rubella and Varicella Virus Vaccine Live), a combination vaccine to help protect against measles, mumps, rubella and varicella; and M-M-R II (Measles, Mumps and Rubella Virus Vaccine Live), a vaccine to help prevent measles, mumps and rubella, also contributed to higher sales in vaccines, increasing by 15% to $661 million primarily driven by the ongoing recovery of wellness visits in the United States.

Vaccine performance was negatively affected by lower sales of PNEUMOVAX 23, a vaccine to help prevent pneumococcal disease, which declined 26% to $277 million primarily driven by lower demand in the United States reflecting prioritization of the COVID-19 vaccine.

Performance in hospital acute care reflects the suspension of sales of ZERBAXA for injection, a combination cephalosporin antibacterial and beta-lactamase inhibitor for the treatment of adults with certain bacterial infections, following a product recall in the fourth quarter of 2020. This unfavorability was partially offset by higher demand globally for BRIDION 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, which increased 16% to $369 million due in part to the ongoing COVID-19 pandemic recovery, and growth in DIFICID (fidaxomicin), a macrolide antibacterial drug for treatment of Clostridioides difficile -associated diarrhea in adults and pediatric patients aged 6 months and older, in the United States.

Animal Health Revenue

Animal Health sales totaled $1.4 billion for the third quarter of 2021, an increase of 16% compared with the third quarter of 2020. Excluding the favorable effect from foreign exchange, Animal Health sales increased 14%, reflecting growth across geographies and species, including the biopharmaceutical portfolio and the Animal Health Intelligence portfolio. Sales growth in livestock was primarily driven by higher demand globally for ruminant products, including Animal Health Intelligence products. Sales growth in companion animal was primarily driven by the BRAVECTO parasiticide line of products, as well as vaccines.

Third-Quarter Expense, EPS and Related Information

The tables below present selected expense information.

GAAP Expense, EPS and Related Information

Gross margin was 73.8% for the third quarter of 2021 compared to 72.4% for the third quarter of 2020. The increase primarily reflects the favorable effects of product mix and lower acquisition- and divestiture-related costs, partially offset by higher manufacturing costs.

Selling, general and administrative expenses were $2.3 billion in the third quarter of 2021, an increase of 13% compared to the third quarter of 2020. The increase primarily reflects higher administrative costs, increased promotional expenses in support of the company's growth pillars, higher acquisition- and divestiture-related costs, as well as the unfavorable effects of foreign exchange.

Research and development expenses were $2.4 billion in the third quarter of 2021 compared with $3.3 billion in the third quarter of 2020. The decrease was primarily driven by lower upfront payments related to collaborations and license agreements, partially offset by higher oncology and COVID-19 clinical development spending, as well as increased investment in discovery research and early drug development.

3 Includes expenses for the amortization of intangible assets and purchase accounting adjustments to inventories, 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.

Other (income) expense, net, was $450 million of income in the third quarter of 2021 compared to $312 million of income in the third quarter of 2020, primarily reflecting higher income from investments in equity securities, net, partially offset by higher pension settlement costs.

The effective income tax rate was 13.2% for the third quarter of 2021, reflecting the beneficial impact of the settlement of a foreign tax matter.

GAAP EPS was $1.80 for the third quarter of 2021 compared with $0.92 for the third quarter of 2020.

Non-GAAP Expense, EPS and Related Information

Non-GAAP gross margin was 76.8% for the third quarter of 2021 compared to 76.5% for the third quarter of 2020. The increase in non-GAAP gross margin primarily reflects the favorable effect of product mix, partially offset by higher manufacturing costs.

Non-GAAP selling, general and administrative expenses were $2.3 billion in the third quarter of 2021, an increase of 12% compared to the third quarter of 2020. The increase primarily reflects higher administrative costs, increased promotional expenses in support of the company's growth pillars, as well as the unfavorable effects of foreign exchange.

Non-GAAP R&D expenses were $2.5 billion in the third quarter of 2021, an 11% increase compared to the third quarter of 2020. The increase primarily reflects higher oncology and COVID-19 clinical development spending, as well as increased investment in discovery research and early drug development.

Non-GAAP other (income) expense, net, was $244 million of expense in the third quarter of 2021 compared to $35 million of expense in the third quarter of 2020, primarily reflecting higher pension settlement costs.

The non-GAAP effective income tax rate was 13.0% for the third quarter of 2021, reflecting the beneficial impact of the settlement of a foreign tax matter.

Non-GAAP EPS was $1.75 for the third quarter of 2021 compared with $1.37 for the third quarter of 2020.

A reconciliation of GAAP to non-GAAP net income and EPS is provided in the table that follows.

Financial Outlook

Merck continues to experience strong global underlying demand across its business. Consequently, Merck is raising and narrowing its full-year estimated ranges for revenue and EPS. At mid-October 2021 exchange ranges, Merck now expects sales growth of 14% to 15% in 2021, with full-year 2021 revenue estimated to be between $47.4 billion and $47.9 billion, including a positive impact from foreign exchange of approximately 1.5%.

Merck continues to believe that the global health systems and patients have largely adapted to the impacts of the COVID-19 pandemic, and, that while certain negative effects will persist, the trend will continue to improve. Merck continues to estimate that the pandemic will have a net unfavorable impact to 2021 revenues of less than 3%, all of which relates to the pharmaceutical segment.

4 2020 includes $832 million related to the Seagen collaborations.

5 Includes the estimated tax impact on the reconciling items. In addition, the amount for 2020 includes a tax cost of $67 million, representing an adjustment to the tax benefits recorded in conjunction with the 2015 acquisition of Cubist Pharmaceuticals, Inc.

Merck is raising and narrowing its full-year 2021 GAAP EPS range to be between $4.71 and $4.76.

Merck is raising and narrowing its non-GAAP EPS range and now expects full-year 2021 to be between $5.65 and $5.70, including a positive impact from foreign exchange of approximately 2%. The non-GAAP range excludes acquisition- and divestiture-related costs, costs related to restructuring programs, income and losses from investments in equity securities, and certain other items. Neither the sales nor the EPS ranges provided above include the impact of the potential launch of Merck's COVID-19 antiviral drug candidate, molnupiravir.

The following table summarizes the company's full-year 2021 financial guidance.

*The company does not have any non-GAAP adjustments to revenue.