Er Danmark et Attraktivt Land for Klinisk Forskning? Peter Aurup, M.D. Vice President, Global Clinical Trial Operations Merck Research Labs Merck/MSD

Er Danmark et Attraktivt Land for Klinisk Forskning? Peter Aurup, M.D. Vice President, Global Clinical Trial Operations Merck Research Labs Merck/MSD

Today s Agenda Clinical Development Challenges Cycle Times, Cost, Success Rates About Merck/MSD Global Presence Role of Global Clinical Trial Operations Clinical Research Model Clinical Studies Merck s process for allocating studies Selection of countries/sites/investigators Denmark Meeting today s clinical trial challenges Continuing our successful partnership

Challenges: The New Industry Reality Development of new medicines and vaccines has become more costly and complex Return on Investment (ROI) is negative for the pharmaceutical R&D industry The regulatory landscape is constantly transforming The bar for new drug approval and/or reimbursement is constantly being raised Investor and consumer pressures are mounting Patents are expiring at a record rate Changing disease states and aging populations call for an emphasis on new or different therapy groups Innovation is key!

Development Cycle Times are Longer R&D CT Years % Change 98-00 - 99-01 -2% NME R&D Cycle Time Composite Industry Median 00-02 14% 01-03 -8% 02-04 4% 03-05 1% 04-06 3% 98-00h 99-01h 00-02h 01-03h 11.6 11.4 11.9 13.0 05-07 5% 02-04h 12.4 06-08 -2% 07-09 1% 08-10 1% 09-11 1% 03-05h 04-06h 05-07h 06-08h 12.5 12.8 13.5 13.2 Discovery Development 07-09h 13.4 08-10h 13.6 09-11 13.7 0 5.2 10.4 15.6 Years NME R&D Composite Cycle Time: Target Identification through First Approval in a Major Market KMR Group 2012 R&D Performance

Increasing R&D Spend, Development Costs 60,0 R&D Spend (Billions) 50,0 40,0 30,0 20,0 10,0 0,0 1980 1990 2000 2004 2005 2006 2007 2008 2009 2010 2011 * Pharmaceutical Research and Manufacturers of America, PhRMA Annual Membership Survey - 2012 **Data is adjusted to 2000 dollars 1,4 1,2 1 0,8 0,6 0,4 0,2 0 Development Costs (Billions) Including cost of failures 1970s Mid-1980s Late 1990s Early 2000s

Development Success Rates Have Dwindled NME Success By Phase 2007-2011 Industry Portrait, Pure Only 12% of molecules that enter Phase 2 will reach market. Preclinical Phase 1 Phase 2 Phase 3 Registration 1.9 1.2 Success Rate For Each Phase 8.6 64% 44% 22% 65% 83% Percent Calculated To Achieve 1 Approval 30.4 19.4 3% 5% 12% 54% 83% KMR Group, Inc. 2012 R&D Performance

Merck & Co., Inc. A global healthcare leader Mission is to discover, develop and provide innovative products and services that save and improve lives around the world Small molecules Vaccines Biologic therapies Consumer care products Animal health products Known as MSD outside the U.S. and Canada Approximately 84,000 employees worldwide Roughly $8 billion annual investment in research and development

How MRL Conducts Clinical Studies MRL-sponsored clinical trials are conducted worldwide by Global Clinical Trial Operations (GCTO) Global staff of 3,000+ individuals Covers the execution of all clinical trials Phase I through IV/V Scope of responsibility ensures consistency and quality in conducting end-to-end trials IND Submission to WMA/NDA Generic/OTC Pre-Clinical Phase I Phase II Phase III Phase IV / V Life Cycle Management GCTO Scope

GCTO Global Country Footprint Latin America: Argentina Brazil Chile Colombia Costa Rica Guatemala México Peru Puerto Rico Venezuela North America: Canada United States EMEA: Israel South Africa Russia Turkey Ukraine Europe: Austria, Belgium Czech Republic, Denmark Finland, France, Germany, Greece, Hungary, Baltics [Lithuania, Estonia, Latvia] Italy, Netherlands Norway, Poland Portugal, Spain Sweden Switzerland UK/Ireland Asia Pacific: Australia/New Zealand China/Hong Kong India, Korea, Malaysia Philippines, Taiwan Thailand, Vietnam (Japan) GCTO has offices in more than 48 countries and partnerships with CROs worldwide, so we meet patient requirements while optimizing resource utilization..

Merck s Clinical Trial Execution Model Internally-Managed Study Programs MRL both sponsors and conducts the clinical trials Typically novel compounds to protect MSD s intellectual capital Uses both internal and external staff to perform specific functions/activities Programmatic-Outsourced Study Programs MSD sponsors the study Clinical trials run end-to-end by an external partner (CRO) Typically studies where broad industry knowledge exists; compounds already approved or regulatory path well established As the study sponsor, MRL retains responsibility for the study regardless of who executes it or where it is conducted.

Trial Allocation: Where Studies are Conducted MRL Clinical Trial Allocation Committee (CTAC) Cross-functional, senior-level decision-making body Includes representation from different functions: GCTO Global Medical Affairs Global Clinical Supply Emerging Markets Data Management Input into the decision-making process is obtained from both HQ and local personnel Solicit information directly from the local country Familiar with distinct capabilities of the country Denmark: local GCTO (MSD)

Country Selection: A Data-Driven Process Many factors serve as input into the country selection process: Benchmark studies Key clinical site recommendations Regulatory requirements Study-specific operational criteria Product registration requirements Ability to source drug comparators. And more! Conduct validations Use data from validations to determine final study allocations Select the countries of choice

Country Selection: Criteria Evaluated Access to patients for enrollment Patient population and demographics Standard of care Disease prevalence Access to qualified investigators Proven quality in: Site activations Trial oversight and monitoring capabilities Regulatory environment Regulatory Authorities and Ethical Committees (EC/IRB) Overall cost We look for countries with access to patients, research-experienced sites and investigators, quality patient care and reasonable cost.

Investigators/Sites: Selection Criteria Investigators must: Be well-qualified healthcare professionals with research experience Understand clinical trials, ICH / GCP Have IRB/EC oversight Understand local regulatory requirements Understand local healthcare environment Have a commitment to advancing patient care Sites must have: High quality care provided to patients Sufficiently trained staff to manage study procedures Adequate facility for evaluating patients / performing procedures Access to and proper storage conditions for clinical supplies Proper storage conditions for study documents

MRL 2012 Clinical Study Allocation Targets In 2012, targets for conducting MRL clinical studies are divided in thirds between North America, Europe and the rest of the world. * Included in totals for regions

Mid-Year 2012 MRL Study Data* Includes number of Studies, Sites and Patients for HQ-managed, sponsored studies active in 2012** Data Studies Sites Patients Global 705 13,427 270,058 Europe 234 4,960 88,228 Nordic Region 69 540 26,977 Denmark 33 151 11,493 10% total patients! * As of August 2012 ** Includes all phases ** Local studies excluded ** All Patients and initiated sites are counted for all active studies ** Active studies defined as studies that have started (FSR or FPE Actual present) and Studies that have not reached database lock, or that locked in 2012

Why Denmark? Strong health care institutions that meet site and Investigator criteria State-of-the-art health care facilities Pioneers in employing Good Clinical Practices (GCP) Access to high-technology equipment Strong medical foundation at both universities and hospital-based research centers Relevant infrastructure for conducting research Skilled Investigators Qualified, reliable and experienced doctors and nurses Good understanding of clinical research Good patient/doctor relationships

Why Denmark? In-country, national health care registries provide high-quality patient data Tradition for thorough monitoring and registration of patients who are in contact with health services System is unique to Denmark and other Nordic countries Very valuable resource in long-running clinical trials No patient lost to follow-up Patients easily monitored and traced Follow-up patient data can be pulled very readily Provides measurable results over time Ability to link data across a number of unique registers and databases National Patient Registry. Birth Registry, National Health Insurance Registry. Some 50 national clinical quality databases based on: Diagnostic groups, medical specialty or procedures

Why Denmark? Typically rapid review/approval of drug trial applications by: Danish Health and Medicines Authority Health research ethics committees (EC) Newly-established single-point-of-entry (SPOE) system Streamlines processing of applications to conduct clinical trials Facilitates access to preparing and planning clinical trials and recruiting trial subjects countrywide More standardized, consistent clinical trial agreements makes it easier to start up trials

Why Denmark? Educated patient population makes subject recruitment and enrollment easier People are positive and compliant about participating in clinical research No language barriers in following trial instructions Low drop-out rates Nordic countries lead in using social media tools to increase subject recruitment / retention Facebook, Twitter, YouTube Denmark, Norway and Sweden pioneered use of Facebook to advertise for patients Sweden/Denmark very successfully used Facebook for a recent MRL HPV vaccine study

Global Challenge: Increasing Demand for Additional and Long-Term Data Working in much more complex environment Must demonstrate clinical effectiveness, not just traditional efficacy and safety Added value is necessary to secure adequate prices and reimbursement Executing clinical trials is more difficult than ever Protocols increasingly complex Western European market increasingly costly Regulators require data from increasingly diverse populations Growing competition for resources Includes access to qualified investigators, vendor partnerships and patient populations Speed and quality are critical

Denmark Challenges: Cost and Diversity More and more clinical trials are being conducted across the globe Increased trial capabilities, experienced investigators and quality sites in lower-cost countries Need diversified populations participating in clinical trials to fully reflect demographics of disease under study In a highly competitive research environment, a driver for retaining investment in clinical research is the willingness to adopt new, innovative therapies once they are available in the marketplace Economies of emerging markets are growing more than twice as fast as the developed world Industry focus is heavily on emerging market countries This focus can be at the expense of more mature economies

Denmark: Continuing the Success Partner in planning, managing and executing global clinical trials Continue expedited regulatory and ethics review in particular for early phase studies Provide well-trained, experienced and motivated investigators Maintain high-performing clinical sites Initiate on time With drug on hand With EDC ready to go Find the right patients to fit study profiles Use innovative means to reach potential patient base Ensure patient commitment to finishing a study Capitalize on benefits of National Registry program Continue to advocate for clinical research Maintain high-quality clinical excellence in research conduct