1

Message Delivery to Merck:Practical Guidance to Conveying the Value

in your Drug Delivery Technology

Partnership Opportunities in Drug Delivery ConferenceOctober 4, 2011

Fernando Salles, Ph.D., CLPTM

Senior Director, Franchise Licensing Integrator Drug Delivery, Neuroscience and Ophthalmology

2

Forward-Looking Statement

This presentation contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the statements. The forward-looking statements may include statements regarding product development, product potential or financial performance. No forward-looking statement can be guaranteed and actual results may differ materially from those projected. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this presentation should be evaluated together with the many uncertainties that affect Merck's business, particularly those mentioned in the risk factors and cautionary statements in Item 1A of Merck's Form 10-K for the year ended Dec. 31, 2010, and in any risk factors or cautionary statements contained in the Company's periodic reports on Form 10-Q or current reports on Form 8-K, which the Company incorporates by reference.

3

Key Company Facts for Today’s Merck

In 2010, 46 significant licensing and partnership deals were executed.

LICENSING

Whitehouse Station, New Jersey, U.S.A.HEADQUARTERS

In 2009, Merck and Schering-Plough merged to become a stronger, more dynamic healthcare leader. We are known as Merck in the US and Canada and everywhere else as MSD.

MERGER

EMPLOYEES

GLOBAL OPERATIONS

Approximately 94,000

Merck operates in more than 140 countries

3

Pharmaceuticals, Vaccines, Biologics, Consumer Health Care and Animal HealthBUSINESSES

Revenue: $46 billionR&D Expense: $11 billion

2010 FINANCIALS

4

Licensed Products or Patents: 64% of total sales

Approximately 64% of Merck’s 2010 revenue* is attributable to alliance products and patents

* Includes 50% of full year JV revenue (Sanofi-Pasteur MSD and Johnson&JohnsonoMerck)

Partnerships are Key to Our Success

• COZAAR / HYZAAR• FOSAMAX• GARDASIL • REMICADE• CLARINEX• NEXIUM• VARIVAX • ZOSTAVAX • ROTATEQ

5

CV andDiabetes

Infectious Diseases

Respiratory/ Bone/

Imm/Derm

Women’s Health

Neuro/ Ophthalmology

Oncology

Vaccines

Mature/ Diversified

Brands

Positioned to Offer Customers a Portfolio of Options in Key Therapeutic Areas

5

6

Our Pipeline Makes the Case for Partnering

Fertility, corifollitropin alfa(SCH 900962) (US)

SarcomaRidaforolimus (MK-8669)

Cervical Cancer, V503HPV vaccine (9 valent)

Psoriasis SCH 900222

Diabetes Mellitus MK-3102

ThrombosisVorapaxar (SCH 530348)

Contraception, NOMAC/E2 (SCH 900121) (US)

Staph InfectionV710

Hepatitis CVaniprevir, (MK-7009)

Herpes ZosterInactivated VZV vaccine

V212Diabetes sitagliptin/pioglitazone

(MK-0431C)Thrombosis, betrixaban

(MK-4448)

Osteoporosis, odanacatib(MK-0822)

AtherosclerosisMK-0524B

Pneumoconjugate vaccineV114

Contraception, Medicated IUS, SCH 900342

Parkinson’s DiseasePreladenant, (SCH 420814)

AtherosclerosisAnacetrapib, (MK-0859)

ProgeriaLonafarnib, (SCH 066336)

COPDNavarixin, SCH 527123

Pediatric VaccineV419

OsteoporosisMK-5442

InsomniaMK-6096

InsomniaMK-3697

Phase II

Neuromuscular blockade reversal, BRIDION (SCH 900616) (US)

AtherosclerosisMK-0524A (US)

Clostridium difficile InfectionMK-3415A

Migraine, telcagepant(MK-0974)

Asthma, ZENHALE (SCH 418131) (EU)

Cancer, dinaciclib(SCH 727965)

Insomnia, suvorexantMK-4305

Allergy, Ragweed 1SCH 039641

Cancer, dalotuzumab (MK-0646)

Glaucoma, SAFLUTAN(MK-2452) (US)

Allergy, Grass Pollen 1SCH 697243

Allergy, Immunotherapy 1SCH 900237

Phase III Phase III Phase II

6

= Licensed Product or Patent

Pipeline as ofFeb 16, 2011

1 North American rights only

7

Merck Pipeline (cont.)

Hepatitis Cboceprevir

(SCH 503034)

Bipolar DisorderSYCREST

(SCH 900274)2

(EU) 9/2010

Atrial FibrillationBRINAVESS (MK-6621)1

(EU) 9/2010

AsthmaDULERA

(SCH 418131) (US) 6/2010

Approvals4

Atherosclerosisezetimibe + atorvastatin

(MK-0653C)

Combination Products in Development

Diabetessitagliptin + simvastatin

(MK-0431D)

Diabetessitagliptin + extended release

metformin (MK-0431A XR) (US)

Staph Infectiondaptomycin for injection

(MK-3009)3

ContraceptionNOMAC/E2

(SCH 900121) (EU)

Under Review

1 Exclusive rights outside of the United States, Canada and Mexico to vernakalant (IV).

2 Lundbeck has exclusive commercial rights in all markets outside the US, China, and Japan.

3 Japanese rights only.4 Approvals obtained within the last 12 months.

Pipeline as ofFeb 16, 2011

7

= Licensed Product or Patent

8

Merck has risen to be the best perceived company when weighted across all scores

% of respondents agreeing that each core company exhibits the average criteria1

• Proportion agreeing (%)

51

48

0 20 40 60 80

• 20061

• 16• 15• 14• 13• 12

• 11• 10• 9

Median• 8• 7

Merck• 5• 4• 3• 2• 1

60

46

0 20 40 60 80

• 20081

• 16• 15• 14• 13• 12• 11• 10• 9

Median• 8• 7• 6• 5• 4

Merck• 2• 1

58

69

0 20 40 60 80

• 20101

• 14

• 13

• 12

Merck

• 11

• 10

• 9

• 8

Median

• 7

• 6

• 5

• 4

• 3

• 2

Note: Core sample declined from 16 companies to 14 due to mergers of Wyeth and Genentech

1. Calculated weighing each of the evaluated characteristics equallySource: BCG surveys

9

Connecting with You

Understanding Your Science Doing the Deal

Working Together

• Worldwide scouts build relationships and seek out opportunities

• Nonconfidential information submitted for review

• Initial nonconfidential review by Review and Licensing Committees

• Confidentiality disclosure agreement signed

• Confidential review

• Face-to-face scientific meetings

• Commercial assessment

• Term sheet negotiations conducted by Transaction Manager

• Due diligence

• Definitive agreements negotiated

• Agreements executed

• Alliance Management– Alliance managers assigned– Alliance launched– Monitor progress

throughout the agreement

• Basic Research Collaboration Implementation

– Senior scientists dedicated to successful execution of the research collaboration

Overview of Merck’s licensing process

10

Regional Contacts

Steven Xanthoudakis, PhD

Canada andPortions of Upper

Midwest United States

Eric Lund, PhD

Scandinavia, Austria, Eastern Europe, and

The Balkans

Koichi Kato, PhD

Japan

Kuchan Kimm, MD, PhD

Korea

Yael Weiss, MD, PhD

Northwest United States

Greg Wiederrecht, PhD, CLPVice President and Head, External Scientific Affairs

Jing-Shan (Jennifer) Hu, PhDChina, Hong Kong,

and Taiwan

Manfred Horst, MD, PhD, MBA

Franceand Germany

Phil Kearney, PhD, MBA

Australia,New Zealand,Malaysia, and

Singapore

Robert Pinnock, BSc, PhD

United Kingdom,Ireland, Portugal,

and Spain

Swami Subramaniam, MD, PhD

India, Philippines,Vietnam, and Indonesia

JunSuzuki, DVM, PhD

Japan

James Schaeffer, PhD

Southwest United States

Reid J. Leonard, PhD

New England andLatin America

Margaret Beer, MSc, PhDUnited Kingdom,

Italy, andSwitzerland

SusanRohrer, PhDMid-Atlantic,Southeast,

and MidwestUnited States

JeroenTonnaer, PhD

Benelux, Russia,Israel, and

South Africa

Sanjeev Munshi, PhD,

MBASoutheastern United States

11

• MSD publishes our Areas of Interest twice each year.

• For each of our therapeutic areas, we list the Mechanism of Actions that we are interested in and those that we are not.

• Late-stage clinical compounds (phase 3-ready & beyond) are of interest in any therapeutic area.

• Visit us at: www.merck.com/licensing to learn more!

New & Expanded Areas of Interest for Partnering

11

12

2010

7800 Opportunities Received

1058 Opportunities reviewed at RLC

476 Confidentiality-In agreements

46 Key Acquisitions & Alliances Signed

We Constantly Scan for Partnering Opportunities

13

Practical advice on pitching to Big Pharma I

• Recall that Merck reviews ~8000 opportunities a year – (or 40 opportunities every working day!)

• Recall that there are many players that may be involved• Recall that the business is complex

Therefore:• Direct pitch

– Be cogent – one more slide will not sell the technology if the last 50 have not– Present at least what is requested– Pharma typically tells you what they are interested in– Be real, we will have to do diligence

• Do some of the leg work for your potential client– Address some of the potential issues upfront.

14

New Drug Delivery Technology Considerations

• Technology differentiation• Sustainable competitive advantage• Cost of goods• Manufacturing process / equipment• Packaging formats and materials• Manufacturing experience / capability of supplier• Development timeline• Intellectual Property

The cost, time, resources and additional innovation needed The cost, time, resources and additional innovation needed to successfully develop and launch a new drug to successfully develop and launch a new drug

delivery technology is (almost) always underestimated!delivery technology is (almost) always underestimated!

15

Practical advice on pitching to Big Pharma II

• Partnering meetings:– Short - email pitch not elevator pitch (or business plan)– Describe your request with some details

Real requests from potential partners:• “I'd welcome the chacne (sic) to meet and update you on progress with X's

delivery platform.”• “We met at Bio and mentioned that a next step could be you meet with our

lead scientist for our program who will be at this meeting in XXX.”• “We would love to introduce the companies that we represent, that may be of

interest. Looking forward to meeting you in XXX!”

• Respect yourself!– Do not pitch something that you do not believe.

• We remember YOU not the company.

16

Thank You