 So with that said it's a real distinct pleasure to now move us into our first of two plenary sessions And we really have an amazing leader an icon And I know that firsthand because I had the chance to work in Ken's organization for many many years We'll really look forward to hearing what's on your mind Ken and with that I'll hand it over to you Stelios to introduce the the fireside chat. Thank you Welcome everybody. This is Incredibly important meeting for many of us in biofarm right here in and here out where we all gather Exchange news and ideas on the current state of affairs. It's usually a very diverse set of topics that we cover From finance to R&D innovation drugs marketing I'm sure this year without in fact appropriate planning The COVID conversation is going to dominate pretty much every discussions I had a pleasure to Listen to the earlier panel today And I did hear many of the things that Ken and I will probably be talking about Going forward in this panel and in fact if I could also put a little bit of a commercial here If anybody has the chance to go back and listen and replay the prior panel Please listen carefully to the to the plea the passionate and inside the play by George Yankopoulos on the need To reprioritize and understand what it's like to deal with the upcoming disease burden and the only way out of that would be to invest multiple amounts Others of magnitude more than we have to research and development and basic science So with that behind us, I'll come to the subject today It's Ken and I have not rehearsed this the questions are Unanticipated they are coming as as we have the conversation, but I'll begin with something That's in everybody's mind and that's to do with the current state of affairs and there are two sort of things I would like to ask Ken about one is to give us a sense of how Merck is dealing with Covid from the point of view of what R&D programs Merck has in place Regarding The pandemic and the second point I'd like to hear about is his views on how we could shoot disseminate information from the scientific work we're doing and The social responsibility we have to appropriately inform the public with the right message at the right time Not too soon not too late and just be balanced and fair So that can please So good morning, and thank you for having me. It's my pleasure to be in such distinguished company including you Stelios Merck currently has three announced programs one antiviral and two vaccine programs, but let me start with the antiviral Program if I could so we have a drug that we call now MK 44 82 It is a potent rival nucleoside analog that inhibits multiple RNA viruses Including SARS-CoV-2 We have two vaccines in early development hoping to be in humans very soon 1v590 is a vaccine that is based on Are of the stickular somatitis virus a virus that we employed as a platform successfully in our most recent FDA approved vaccine Which is for Ebola virus which has been highly effective and you know in field tests It was nearly a hundred percent effective and a very difficult context in Sub-Saharan Africa The second one the five five nine one is based on a modified measles virus vector So we have had a lot of experience obviously measles vaccine has been used in billions of people around the world So if I could just go back and talk about how we thought about this and I would say that you haven't heard a lot about Merck's programs And that is by design Not by happenstance So the first thing is that my scientific colleagues at Merck felt it was really important for us to invest time Understanding this novel virus. So we wanted to spend some time Understanding the underlying biology how the virus affects the human body and with that information We then looked around and said what are the best? Vaccine platforms that we could look for we have a lot of experience at Merck with With viral vectors that are you know attenuated viruses I mentioned the Ebola vaccine in the measles vaccine And so we decided to go with those because we think having those kind of Replicating virus that a vector platforms are likely to provide the kind of virus that has certain characteristics First of all, we wanted a vaccine that could be administered with a single dose We thought that was very important when we think about Vaccinating the entire world all seven billion plus people in the planet second we wanted the kinds of vaccines that could be deployed globally and You know, obviously this is an issue that we worry about in the west a lot in the United States We talked about it every day because of the impact the pandemic has had on this country Including the economic free fall that is cause But you have to realize that as this virus has proven Oceans are no barrier Country borders are no barrier. So we have to think about Being able to vaccinate the whole world. So deploying it easily Globally is important and in order to do that has to be administered easy So we were looking for that product profile and going after the two vaccines that we have The good news for us is that first patient in will happen momentarily for the measles vaccine Very soon thereafter for the bsv vaccine and so we are moving forward I will concede that a lot of other Companies are ahead of us here But but I think it's important to realize as I said earlier that this is a novel virus And many of those companies are employing Platforms that themselves are novel platforms that we haven't had a lot of experience certainly not approved vaccines Shifting over to uh the antiviral But what we wanted from a product profile was something that could be orally by available Something that could be orally administered So we have this and we're very optimistic based on the preclinical data that we have in the early Phase two data that we have that this is Perhaps something that would be useful in an outpatient context for people Obviously, it's important with any antiviral to treat the virus as early as possible So we're looking forward to seeing those pivotal studies which are starting This month or early next month at the latest We have two large pivotal studies one of which will be in an outpatient context and the other one will be in a hospital context Shifting to your second question. Stelios. I think your second question is an important one You know, I I've been involved in this industry an awful long time at least for me going back to the 1970s And it used to be that the public learned of scientific information through peer-reviewed journals Uh, it is obviously understandable that given the impact that this pandemic has had on the entire world and particularly on our economy That every development is something that gets trumpeted To some degree in the media But I worry a little bit about the public's ability to understand the data that's being talked about So you'll see almost every day Some phase one data being discussed at length On on network television And you can tell that people don't understand for example the difference between something that is Having an immunogenic effect versus being able to confer protection And even if you confer protection The question is do you confer substantial protection? And if you have substantial protection a question is how durable is that substantial protection? So people I think misunderstand what they're hearing I know that because a lot of very intelligent friends of mine call me up when they see this data And I have to explain to them that something that stimulates the immune system Doesn't necessarily produce the kind of antibody response that will actually protect people In a significant way from infection. So maybe I've taken too long with your first question Not at all. Not at all. In fact, it isn't just Regular people lay people having a difficult time Assessing the success or progress of those trials even scientists have a difficult time simply because There's no standard way by which people are measuring what they do if incubate Something for an hour you have one effect the same incubation for 10 hours a different binding Yes result When you compare two antibody titers or convalescent plasma samples Given the huge variability of convalescent plasma titers You know, you could easily have you know an inappropriate benchmark against which to compare so this this is It's a very difficult time and I certainly share with you the need That we need to temper our enthusiasm And the public information that we disseminate to the world But let me let me move to another subject Which is equally important that is access We've seen something disturbing which is the wealthy nations Are moving aggressively to secure supplies the WHO and others have In partnership with others have attempted to create a way a fund a mechanism to secure Vaccine supplies for developing countries. What is your view on this subject? Well, you know, I have to say that merc has a long history in this area I mentioned that our most recent vaccine is our ebola virus vaccine You don't undertake a program like that for profit reasons you undertake it because Frankly, the values of the company are that we want to Do things that affect grievous illness around the world And we felt our vaccine capabilities were ones that we could employ against the ebola virus and so we were willing to do that and recognizing that that's Clearly something that you make no profit on But it's the kind of thing that you want to do because frankly it allows you to vindicate what you say you're about as a company And you know, I fundamentally if I could take a step back I don't believe our companies exist to be vehicles for wealth creation primarily I think they become vehicles for wealth creation If we do what we're here to do which is To employ science against unmet medical need around the world And I do stress under Around the world the fact of the matter as you know, is there many Unappreciated diseases that affect people Outside the west outside wealthy nations and in this case This is a truly truly global pandemic and so to get more directly to your question I think that we as an industry have an obligation to make these products whether they're therapeutics or vaccines broadly And that means affordable around the world and I think the challenge around distribution as you just alluded to is a major one We're as we interact with with countries. I will say our own country the u.s. As well as countries in europe The challenge is that people want us to secure the first doses for their population And when you begin to say well, how would you think about this and in a more In a more objective way, you would say, okay Who needs it most in the world, right? So maybe frontline health care workers are the first Group that gets them and then you would start stratifying risk based on people's age Their co-morbidities their vulnerability to this disease And so I think it's a big challenge when the wealthy nations who can afford them the vaccine a one at first and b uh Maybe to some extent are not willing to fund those organizations like goppy That will ensure that these vaccines get to all the people around the world You know the reality of the world is it's this virus has already shown that it's a global virus As I said before and to some degree Until all of us are safe. None of us are safe. It will be out there circulating around the world You know, we live in a world where there's mass transportation across borders And that's not going to change and that's the perfect breeding and spreading ground for a virus like SARS-CoV-2 Absolutely my um, my concern is That assuming we have successful vaccines sometime in the next several months a year or two And assuming that a wealthy nation secure the early supplies What happens to the less wealthy nations? Are we shutting down borders? Are we completely seizing global trade are we making poorer nations even poorer than than what they are already nations are shutting down borders As you know, I just came back from Greece. If you're a u.s citizen, you may not travel to peace I want to accept you because of the high instance rate of COVID in the u.s So pretty ironic In some ways Well, they they uh, the argument I made would be with the government in Greece is they need to appreciate the u.s Is as big as europe and what goes on in new york is not the same as florida or texas or wisconsin and They couldn't have sort of like Unified rules for the whole country, but thank god. I also agree passports so I can get in and out But actually on on the issue of access i'm not sure if Dr. Serene is is available. He had posed the question earlier that he'd like an answer to and I wonder if the moderators can Uh, have dr. Serene join the call to ask the question uh, well I don't think he's available, but Dr. Vijay Raghavan with the principle scientific advice to the indian government might have A related question to this or and I can see him on the screen. So I'll invite him to pose a question I can uh, it's really um very interesting and valuable listening to your conversation Um, you know, what has happened over the last decade or so of the world over is regularly three processes have become More and more difficult for two kinds of reasons one because of genuine stringent scientific requirement But also sometimes because of the perception and the harder it is to Uh jump over the more robust the process is that's a perception issue But the result of such uh, the lack of kind of regulation is that it curbs small Industry innovation and it allows only those with deep pockets to jump over the bar Do you think the pandemic has woken us up to a situation where regulation needs to Reboot into a more realistic manner without compromising speed or quality I certainly hope the answer is yes. Um, I think it's too early to tell But I agree with what you were saying in the main thrust of your question I think the world needs much more harmonization of regulatory standards You know, obviously we want to do global trials, you know We for example have a medicine at murk called ketruder, which is useful And a number of different kinds of Indications and in tumor types across malignant disease And it's important for us to study it just as it is with this COVID-19 vaccine We need to study it across borders. We need to study it with different people We need to understand different ethnic differences in those kinds of things And the challenge is that when you have Systems that are not harmonized that are to some degree opaque That are to some degree Not necessarily Focused on what's important to demonstrate fundamentally safety and efficacy You end up with the situation that you described and you know You know, we were very fortunate with our Ebola vaccine to have a lot of cooperation from regulatory bodies around the world Because if they hadn't moved at hyper speed and if they hadn't cooperated around the standards We would never have gotten that vaccine approved and by the way To the question of how quickly we can develop a vaccine that was a fast Program, but it took five years from start to finish and we needed a huge amount of regulatory cooperation across countries So I agree with your the premise of your question. I hope we are going to see a change based on this global pandemic can it's uh It's a good thing you mentioned ketruder because I do I do see dr. Serena on the screen In his scrubs. He must have just come out of the or and he does want to talk about ketruder and Uh, what could happen in india? So please dr. Serena Thank you stilias and the first admiration and compliments to karun for continuing this battle over years to connect india and the us and to ken I bring greetings from the institute of liver and biliary sciences, which is a global university for liver and salutations to you for the achievements that you have in your tenure in murk and earlier I have two related questions and the first is that Will you and how soon drugs like Pamroly zoomab Shall be made affordable for millions in the low-income countries in line with the murk's motto medicine is for the people not for profit So that is an excellent question and I will say that You know as the CEO of murk that that expression that medicine is for the people not for the profit Is something that our people do believe in there are challenges. Obviously we have so thinking about a medicine like ketruder I know that we have tried to launch it in india for non small cell lung cancer As well as melanoma and we have been working with health Systems and stakeholders in india to try to make it affordable. We've tried to structure patient access programs in india to make it available For patients paying out of pocket because there is no reimbursement for ketruder and in india And we have created a situation where we are able to provide free vials but you ask about millions of patients and We are not meeting the needs of millions of patients this way We've launched the program in india We're going to continue to explore alternatives to provide greater access to this medicine Because the medicine is actually not truly a breakthrough if people don't get it So I understand what you're asking and I totally agree with it I will also say that I have enormous enormous respect and admiration for what you do doctor And as we think about Researching this medicine for a catellulary cancer. We need to think about the indian population Dr. Siri, you have a second question Yes Just to continue on the first for 30 seconds is gilead made hepatitis c2 for drugs But my second question is at ilbs. We see close to 900 to 1000 new primary liver cancers And I wanted to know Will murk start collaborating with indian medical scientists and innovators such as Inner developing and mark ilbs immunotherapy program and if so, I think it's a good idea If you agree, if so, how soon Okay, well, so again, you're asking the CEO of murk about something that I wasn't prepared to answer this morning but I can say generally that I agree with you that scientific exchange and medical collaborations are the type that you were just talking about are critical If we're going to allow ourselves to have impact globally And we have to have the right kind of partnerships across early stage disease To later stage disease and it obviously has to go from early stage science to clinical stage research And so I would say to you All our teams are active around the world including in india We've just got to do a better job of having those kinds of collaborations I'm sorry. I can't be more specific I will tell you that I want the answer to very much to be yes And we're just going to have to find the best ways to create these partnerships Thank you. Thank you You spoke before ken about murk's philosophy about drug discovery drug development access The history of murk the cultural murk I'm just going to put a little message here from a time I'm and who is Having a similar conversation later today with Roy evangelist He should ask him about the ivermectin story because there was a defining moment For biopharma for me personally. He was what convinced me I should get into this business and Roy again who's speaking later has been You know the role model for most of us. Certainly the greeks in the industry and I certainly for that I'm not great Exactly Tell me a little bit. I've got many more questions, but One thing that may come to the surface for good in this Pandemic is the fact that we've completely ignored for a variety of reasons novel antibiotic researches and industry What are your thoughts on the matter? so, you know murk tends to be a company Where we say our heritage is our future so for a very very long period for decades and decades we have been involved in antibiotic research But the fact of the matter is as you just alluded to There isn't much in terms of market-based incentives for companies to do that research In fact, it's a terrible market to be in if you discover a new antibiotic It's generally speaking going to be held in reserve For those patients who really need it the hospital reimbursement codes are such that they discourage the hospitals even for those patients We're using it because of the bundling etc So right now we have a situation where There isn't much of a market incentive to do this and and I think people tend not to focus on the long term. We're really now focused on SARS-CoV-2 But for years we've been trying to urge society to really put in place the kinds of incentives so that we can deal with these antibiotic These resistant forms of antibiotics in 2050 more people will die from antibiotic It resisted antibiotic Diseases then will die from other things like climate change, which we talked about a whole lot So I think it's really important for us as the society to provide the kinds of incentives For companies to go after those targets. And by the way, as you know for SARS-CoV-2 A very substantial number of people who die from that die from opportunistic Bacterial infections. So the two are linked together even in SARS-CoV-2 in terms of what causes death here I think it's really really important for us to look forward to realize that the next pandemic could be bacterial in nature And that we need to have this kind of research done and and not have these small antibiotic companies going bankrupt like we're seeing right now Well, since you mentioned the issue of lack of market incentives essentially through pricing and and amount of consumption That brings up You know the hugely important question that we've been grappling with for Really two decades, I would say right now, which is, you know, the cost of drugs attempts by government politicians to effect change Many of us would like to some change as well. There's no doubt about that What of your, you know, we We're not being political in these conversations But at least we can assess the environment around us and venture a guess as to what is likely to happen whether the most favorite nation approaches executive orders congressional legislation congressional decisions will anything happen or if something happens What would that be in in the whole world of drug pricing? Well, I think first of all if I could just make a comment I think it's highly ironic That we are talking about a most favorite nation executive order in the middle of a pandemic The simple fact of the matter is Like many companies, Merck and others have looked at this with the urgency to invest aggressively and at risk with respect to programs with the goal of having a positive impact on a raging pandemic which according to NPR yesterday is going to cost the united states four trillion dollars this year Right the pandemic and so we're putting up huge cost including financial and human capital Investments as well as opportunity costs and it's clear if you look at 200 vaccine programs across the industry Most of these companies will never recoup their investment here So it is to me. It's highly ironic that at this time we're talking about removing all reasonable market-based incentives for r&d And it's in in this industry. I understand the argument the potent political argument I've been on the hill many times People don't like the fact that in the u.s. We pay more for drugs than people around the world I think people look at companies countries like germany and france and say You know, they are in essence free riding on the r&d that the us is is supporting I think people miss a couple of other points I mean if you look at how much r&d gets located in the u.s If you look at the quality of the jobs and the wealth creation in the u.s. Because of this environment I think people miss that point, but ultimately Ultimately, I think that the u.s. Market is going to Be a less robust Free pricing market than it is today. I think the trends will continue the pressure on our pricing will continue and I worry about How long the capital markets will continue to put substantial amounts of capital at risk for long periods of time to do r&d If they think that the risks are skewed Asymmetrically to the negative in the united states and I think it's coming to be that way And I think what the thing that I say to politicians about this Is that you can do what you want in the short run to make this generation of products more affordable But we have an obligation not just to today's patients, but to tomorrow's patients whose hopes rest on our ability To develop things for Alzheimer's and those kinds of things And the and a politician who's only running for office every two years four or six years They never will know for certain all the cures that won't be developed because of bad policy in the short run That's an excellent point and it brings The discussion to another extremely important challenge of any CEO of a pharma company small or large and that is Yes, we all I'd say all with with caution, but conviction as well We all are noble minded. We do want to do right. We want to Improve the condition of humankind But at the same time in running murk you have another Concentration and in fact, it's a very important one and it's called shareholders And in fact within shareholders There are those with a relatively short term outlook and those with a relatively long term outlook So how do you balance? The mission of a humane company on one hand With return to shareholders and within that short term versus long term Well, I would say that I've tried not to see the obligation to shareholders and the obligation to our primary constituency which to me is patience patience have to come first And if a company doesn't put patience first It may make money in a short run, but it won't make money in the long run So I've always tried to find a way to optimize What's good for patients and what's good for shareholders? I do think the short term long term thing is a big issue when I first became CEO at the beginning of 2011 It was a really bad time to be a pharma CEO In one one respect and that is that a lot of thoughtful people allegedly thoughtful people on wild street Had reached a conclusion and a lot of influential pieces were out at that time saying if you want to create shareholder value You ought to cut r&d substantially Um, and there were people in the industry who did that and in fact, you'll remember There were a few companies that basically were anti r&d and their stocks were flying high at that time We don't need to mention them, but we all know who those characters were All right, uh, and so it was a very hard decision for me when I first became CEO But I think you know, you mentioned roi vacillus I'll just put a footnote here. I came to work for roi when I was 38 years old I was his head of communications And it was my first two years in the industry were his valedictory two years as he was leaving murk And everything that I know about murk and everything I know about the role of pharmaceutical companies Is what I learned from roi vacillus And so I decided very early on that although there was pressure on murk and we had a five year Road map for earnings growth that I was going to withdraw that Much to the chagrin of my board and much to the chagrin of my shareholder base my stock plummeted Uh, especially since you know, frankly, I started at about the same time as uh, the new CEO Pfizer did And they took a slightly different approach Bottom line is let me tell you something that I learned and I wasn't smart enough to know at the time It hurt a lot to watch the stock price decline in the short run But what was interesting is that my shareholder base turned over stellius And I ended up getting the kinds of shareholders who wanted to invest in the long term In fact, I got really the right shareholders for murk coming in albeit at a lower price And they gave us the opportunity the time To do what we need to do and I will quote roi vacillus here And saying that in order to be successful a company has to have three things It needs to have great scientific leadership And there are a lot of great scientific leaders. You talked about george on complice when we talked about how many Great scientific leaders or greek yourself another one So you need great scientific leadership You've got to allocate sufficient Resources and then the last thing he always said is you've got to give scientists peace and quiet Meaning you've got to allow them to go after their projects without worrying about this year's budget cuts or next year's budget cuts And we've tried to do that at murk and we haven't been totally successful But I think we created a lot of shareholder value by not giving up on our fundamental principles Outstanding and I let me add a couple things Speaking of scientific leaders. I know you've been fortunate to have all the greatest as your partner in roger poll matter Who is who's brilliant mind and a great scientist and I also want to point out something very important, which is You mentioned before that the world would not know How many of these companies that are investing lots of money today won't recoup that money Merck spent a lot of money on an AIDS vaccine program for many many And that hasn't come to fruition just because that's how science works The last point is we're any other time the last point I want to to address is The issue as part of access but the issue of price, you know was very encouraged when albert burla the co of fizer Was interviewed some months ago as fizer was embarking, you know onto the kovat vaccine Programs, they asked him whether he thought There was a good investment, you know a good business proposition His answer was we didn't even ask that question. We felt we needed to do it and we moved on and and began the program so What is your view on The pricing of vaccines antibodies and all treatments in the context of the of the of the kovat epidemic I got a view I'll save it for a moment later, but i'm just curious to hear Whether you see those as profit generators or something different Well, I think that again this gets back to the fundamental need to on the one hand Make our medicines broadly affordable and accessible But also to run our companies in a way that's economically sustainable So I will say You know for a company like Merck that is put, you know, we're running two vaccine programs and one large antiviral program We're doing that at risk and we may never recover the capital that we're investing If those products are successful I think while this is a different model, I think kovat is a different model than the normal model I still think that we have to be in a position to tell our shareholders that we can make a reasonable profit We can't go for really high prices in this context But I do think that at the end of the day We have to be able to tell shareholders That we're going to provide a fair return on their investment even in the context of kovat too So we will strive for a balanced and equitable distribution as we talked about across all economic tiers To make the medicine available, but at the same time, I think we have to have reasonable market-based incentives for kovat 19 interventions Including I would say those products that have truly differentiated product attributes. We're going to be late Stelios compared to some other companies A lot of people might say Merck if you're not going to be one of the first three or four or five vaccines Why are you investing in a vaccine? Well, the reality of the world as you know Stelios is there are different populations that are going to have different needs There will be an endemic phase after the pandemic phase And the first vaccines may not be ideal vaccines So what Merck has said is we're going to proceed trying to develop the kind of product profile that I talked about including single dose vaccine One that has very high levels of efficacy and safety And I think if we're going to continue to do that and we're going to have to put up the billions of dollars Necessary to develop that we have to be able to get a return on that But that does not mean maximizing our profit ability I couldn't agree with you more ten. I mean the the way I look at it This is a global health crisis an economic crisis a social crisis We are the first responders in this crisis And as first responders, we have added responsibility Besides what we've done to our shareholders and again, I'll say Stelios I mean if you think about What the world is going to spend in terms of the trillions of dollars That are not just on the direct medical costs But the cost of propping up their their economies The idea that you know somehow Pharmaceutical companies should do this for free Doesn't make any sense in that context if we're able to bring forward medicine That actually reduces direct medical costs and provides those broader societal benefits around economies, etc I think it's the kind of thing that there should be a reasonable return agreed We ran a couple of minutes over time, but this was a conversation. We couldn't stop. I want to thank Ken Our participants from India It's been a wonderful chat A reminder to the to the audience as we go into the next phase. There will be questions And scroll scroll scroll down to the bottom of the page To take the poll to the questions presented Again, thank you everybody and thank Arun for being with us once again in this wonderful meeting. Thank you