Good afternoon. I'm Chris Schott at JPMorgan, it's my pleasure to be wrapping up day one of the JPMorgan conference, with a presentation from Merck. From the company, we have the company's Chairman and CEO, Rob Davis, as well as Dean Li, who is President of Merck Research Labs. After a very, very successful 2022 for the company, looking forward to Rob's presentation and comments on 2023 and beyond. After the presentation, we'll go to some fireside chat Q&A on the stage here. With that, turn it over to Rob.
Thanks a lot.
Thanks so much.
Appreciate it. Thank you. Good afternoon, everybody. Obviously, we will be making forward-looking statements, and I'd refer you to our statement here on the screen. If you look at 2022, it was truly an exceptional year for Merck. I can tell you, I couldn't be more proud of what the team has delivered scientifically, commercially, and operationally. You know, as we look at it, our science-led strategy is working. We're focusing on what matters, we're putting the patient at the center, we're acting together as one team, and we're doing it with urgency and speed. I think you're now starting to see those results. It's reflecting not only in our commercial and financial results, but most importantly, it's coming across in what we're seeing in how we're advancing our pipeline.
You're gonna hear more about that from Dean here in a minute, but I can tell you, I feel very good about where we are, the progress we're making. We're starting to see some important programs mature and really starting to see some real good visibility as we look to growth long term. As we look at what we're doing externally, we're continuing to augment that pipeline through important business development. I'll spend a little bit of time talking to you about that and how we see the progress we're making, really starting to set ourselves up for a pipeline that is positioned to grow as we look well into the next decade.
Obviously, beyond the idea of how we can do commercially or scientifically, we always focus on what we do from a sustainability perspective, making sure that we act in a way with objectives tied to sustainability. I think if we bring it all together, it's why we're so confident in our ability to drive value for the patient and in turn, for the shareholders. Nope. Go back one slide if I could. If you look at the business from a commercial and operational perspective, we're really delivering across all of our growth pillars. In 2022, we delivered 15% growth if you exclude the impact of LAGEVRIO, and we were able to leverage that to important operating margin expansion. The business is performing extremely well. As we look forward, the underlying growth drivers are there.
As we think about 2023, I can tell you we have confidence that you're gonna see the momentum we've had and those underlying growth drivers continue. Part of what gives us that confidence is the track record. If you look across all of the growth drivers, what you see in 2022 is a continuation of sustained growth over the last four years. Importantly, that growth is in de-risked assets, and it's growth that we feel is quite sound, robust, and will continue. That's why as we look forward, we continue to feel so good about the business. Obviously, while we're very excited about what we've been able to do in the short term, we recognize value creation is about the long term and do you have a sustainable engine? Increasingly, we focus on that.
We ask that question, do we have the sustainable engine? I can tell you today, my confidence sitting here now, given the progress we've made in the last 15 months, couldn't be higher that we are making meaningful progress to have that sustainable engine. Really, we're doing it through 4 levers. We raised these last year to you all, and we've made a lot of good progress. It's focusing on our important durable growth drivers in the Animal Health business, in the vaccines business. It's deploying cash flow to business development. It's understanding the position we have in oncology today and leveraging that leadership well into the next decade. It's not stopping with oncology. It's advancing our broad pipeline, whether it's in cardiometabolic, in vaccines, in neuroscience, and in our infectious disease and immunology space.
As we look at it, we're making progress across all four. You'll hear me speak a little bit about the first two. I'm gonna ask Dean to talk about the second two, but the message is, the progress is there. We have more to do, but the path is in front of us and we are delivering. As you look at the durable growth drivers, what's important as you think about our vaccines business and our Animal Health business, these are very much annuity-like businesses with stable growth. In both cases, we have a growing pipeline. As you see, what we show to be nice and robust growth across both, we expect that to continue into the long term. We've talked about starting with the vaccines business, which is really anchored in our product, GARDASIL, that product will continue to grow meaningfully.
In fact, we expect it to more than double off of 2021 sales. If you look forward, what that means is growth in excess of $11 billion by 2030. We're excited about what we have with our pneumococcal conjugate vaccine suite of products and portfolios. We're gonna continue to make advancements there. Our VAXNEUVANCE product is now approved in both adults and peds. Importantly, V116, which is the next generation adult product we have, will have its phase III data readout in 2023, and we're very excited about that. In addition, we have late-stage programs in RSV, and recently we had some important data readouts in progress with dengue, which we're very excited about.
On the Animal Health business, it's continued growth well above what the Animal Health business market can do, driven by the companion animal business, by what we have in livestock, and importantly, in a growing way, on what we're doing to invest in technologies. As we look at this and we think about what the business is doing, it's generating revenue growth, it's generating margin expansion, it's generating strong cash flow. We're gonna leverage that cash flow to continue to build the pipeline. That continues to be an important priority. It's about the science. It's about focusing on how can we find the best opportunity where there's an unmet need, a scientific opportunity to address that need that fits strategically with us where we see value. Where science and value align, we will act. What's also important is that we're not desperate.
We're disciplined, we're focused, I can tell you, we have a lot of confidence given the track record of the BD we've done over the last few years, and growing and broadening pipeline that Dean's gonna talk to you about. We're in a position where we can be selective. We can look for the best science, but when we see it, we will move, and I'm confident we will do so in a value-creating way. If you look at 2022, you can see an example of what we've been doing. During this year, and a lot of this actually happened and almost all of it in the, in the last half of the year in 2022, we made a lot of important deals. Importantly, it's beyond just looking at acquisitions. It's looking at licensing deals at collaborations.
Whether it's moving forward with next-generation approaches in vaccines, for instance, what we've done with Orna in circular RNA, with our personalized cancer vaccine collaboration with Moderna. Programs in oncology, in Imago, which is in hematology. Kelun with a portfolio of ADC products, and also what we're doing with Orion in prostate cancer. If you look across those top 4 programs alone, Imago, Kelun, Moderna, and Orion, those 4 deals will bring assets all starting phase III studies in 2023. All programs we didn't have 6, 9 months ago. In just 1 year, we've brought four new programs into phase III, and some of those, for instance, the personalized cancer vaccine, all we think can be very meaningful. I feel very good about the progress we're making. We're gonna continue to focus on this.
We've deployed $36.5 billion t o business development over the last five years. To give you context of that's about 90 deals a year. What we're achieving from that currently is 16 mid to late stage active clinical programs, in addition to early and discovery stage programs as well coming from those deals. There's a lot going on, and I'm confident that we will continue to drive the same kind of progress as we look forward. If we can do that, I'm quite confident that as we think about the engine, not only through R&D, but how we will augment it through business development, building on the commercial execution we've shown we can deliver, we're in a very good position to continue to drive the business.
With that, I'll turn it over to Dean to give you a little bit more insights into the portfolio of R&D before I come back up and close. Dean?
Thank you. It's great to be in person here at JP Morgan. We aspire to be the premier research-intensive biopharmaceutical company, and in 2022, we've made significant advances towards that aspiration. In oncology, we have continuing approvals in KEYTRUDA and in Lynparza that are reshaping how oncology treatment is happening today. We, with our partners, Moderna, announced phase II-B results of a personalized cancer vaccine that really, I think, is going to be an important area of investment both for us and for Moderna. In cardiometabolic, we announced the top line data for the phase III STELLAR trial in PAH. In vaccines, we are advancing a population-specific strategy. The right vaccine to the right patient at the right time.
As Rob also noted, we with our partners, Institut Pasteur, had important data at the end of the year in relationship to dengue. We're excited about resuming our islatravir HIV program as well. What do we wanna achieve in oncology? We wanna achieve the fact that over the last 10 years, we have had the privileged position and the honor to reshape cancer care throughout the world. What we intend to do for the next 10 years and beyond is to do more of the same. We have KEYTRUDA, Lenvima, Lynparza, and WELIREG. They continue to provide important readouts that lead to filings that we will be having from now over the next 5 years. Not only that, I think a critical important point is that we are moving from late stage to early stage.
The early stage is especially exciting to us because that's a place where the tumor burden is much less. If we can truly affect in early stage, we begin to open up the prospect that in some patients, we could actually cure them. What is our strategy? Our strategy is we have built a strong immuno-oncology pipeline. We have also built an increasing precision targeted or molecular targeted series of assets that ranges from VEGF, which RTK inhibitors that we've done with ESI. It deals with the PARP class of inhibitors that we have collaboration with AstraZeneca. Includes LSD-1 that we've just done with Imago, RAS, BTK, and importantly, WELIREG with HIF-2α. Not only do we have precision-targeted ones, but increasingly, we've revealed what we've done into the tissue-targeted space.
We have had ongoing collaborations with Daiichi Sankyo, Seagen, and Gilead. More recently, we've announced what our partnership with Kelun has provided us. Over this next year, we will be providing that data of the phase II readouts that will launch a large series of phase III studies. The modalities that we go from small molecules to antibody-drug conjugates, to immune engagers, to biologics, to cell therapy, and more recently, to RNA. The collaboration Moderna leverages their undisputed expertise in mRNA and matches it up with our deep experience in cancer and especially immuno-oncology. What are we trying to do? KEYTRUDA reveals the preexisting immunity to cancer. What we're hoping to do with the personalized cancer vaccine is to tickle the immune system.
The data that we have received in the positive phase II-B results have been the results of a 6-year partnership. In that phase II trials, we showed that in adjuvant treatment of patients with stage III and IV melanoma, following resection, there was a demonstrated statistically significant and clinically meaningful improvement with the vaccine on top of KEYTRUDA. How big of that reduction? It's 44%. The vaccine on top of KEYTRUDA was an additional 44%. I need to remind everyone what KEYTRUDA does by itself in adjuvant. That was a high bar to beat, and it was very clear signal that we had with a positive phase II-B. We have a lot of work. We have a lot of work ahead of us following this phase II-B result. We must advance this to phase III trials in melanoma.
We must ask the question of how early can we go, how late can we go, we must examine not just melanoma, but signals that we have looked for in other immune sensitive, immune sensitive cancers such as non-small cell lung cancer and other cancers, especially, that have been susceptible to KEYTRUDA. We plan to discuss these phase II with regulatory authorities, we will be initiating these phase IIIs this year. We have advanced throughout the therapeutic areas in cardiometabolic. We'll talk about sotatercept, it's not just sotatercept. We have other agents in pulmonary arterial hypertension, and we're excited about our MK-0616, our oral PCSK9 inhibitor, as well as our Factor XI inhibitor. In the vaccine field, again, it's this population-specific strategy that we're advancing with VAXNEUVANCE and with the readouts that Rob talked about in terms of our V116 investigational adult pneumococcal vaccine.
We have important readouts in terms of schizophrenia, treatment-resistant depression, and Alzheimer's. As I've spoken before, we're excited about resuming our HIV programs with islatravir in collaboration with Gilead and also in assets that are wholly owned by Merck. Sotatercept has the potential to transform the treatment of patients with PAH. I have treated patients with PAH. This is a rapidly progressing and fatal disease. The positive results for the phase III STELLAR trial demonstrated a profound impact in the six-minute walk distance. Equally important is that it met eight of the nine secondary endpoints, such as time to clinical worsening. We target filing for this with regulatory agencies in the first quarter of 2023. We will host an event at ACC because we will be presenting the full data of the STELLAR data at ACC, the American College of Cardiology, in March.
At that time, we will also present the PCSK9 phase II studies as well. We have much to do. We are advancing sotatercept in multiple phase III trials as we want to really transform the treatment of PAH. I've talked about this population-specific approach to pneumococcal disease. Why do we wanna do this? Just look at this incidence curve. It is bimodal. You have a pediatric incidence, and you have an adult incidence. It's not just bimodal in terms of the timing. The serotypes, the combination of serotypes responsible for pediatric pneumococcal disease is different than that from adult. What are we doing with VAXNEUVANCE? We're expanding coverage while importantly maintaining production against the historically invasive disease-causing serotypes.
From this graph, what you will see is how important it is to give protection within the first year of life, where much of the invasive pneumococcal disease occurs. In V116, we're advancing our phase III investigational candidate, and it specifically targets adult disease. It's covering serotypes that account for 85% of all invasive pneumococcal disease. We are excited at advancing a strategy that is the right vaccine to the right patient population at the right time. We have an extensive discovery efforts. They are throughout all therapeutic areas. We are investing in multiple modalities.
We are here because we are looking for partners that we have been successful at working with, and we encourage all these partners to come see us because we're open for business, and we're interested in advancing our pipeline with you. One of the major advantages that our discovery organization has is that we have an excellent global clinical development organization that knows how to reveal the unambiguous promotable advantage of the innovative medicines and vaccines that we move forward. With that, let me turn it back over to Rob.
Well, hopefully, as you can see, we've made meaningful progress in 2022. Importantly, we have increasing confidence that we do have that sustainable engine to drive this company and to drive growth well into the next decade. To give you just two proof points of this, we've been talking about the cardiometabolic space. We have the potential, as we've talked about over the last year, for 8 approvals coming in the latter part of this decade that will allow us to have an excess of $10 billion of revenue by mid-2030s. That's important. Equally important is the benefit we're getting from the business development we've been doing in the oncology space.
As we've been talking about, it's about broadening our space and broadening our reach in oncology to take the strength we have in KEYTRUDA, but go into new targeted areas, into new therapies, into new modalities. I'm happy to say that as we look at just what we've done in the last couple of years, we see the potential for greater than $10 billion in revenue coming from our suite of ADCs and our suite of small molecules. It's important to know this excludes all of what we're doing to expand, deepen, and extend KEYTRUDA, Lynparza, Lenvima, and WELIREG for the benefit of patients into the future. It excludes what we have in our early-stage development, it excludes further business development, and it excludes the personalized cancer vaccine we just talked about.
As we sit here today, our ability to drive the type of leadership we want to have in oncology is there. We're confident about it. We're gonna continue to do more. I can tell you, I couldn't be more energized by the value we're bringing, by the patients we're helping, but we have more to do. The progress is there, the confidence is there, but we're gonna stay on task, and we're gonna deliver. With that, I'll turn it over to Chris, and we'll open it up for Q&A. Chris?
Thanks for those comments, Rob. Maybe just to kick off the Q&A, right or wrong, I think the Merck narrative has, you know, this KEYTRUDA concentration has kinda dominated the narrative for a few years now, and it feels like we're maybe finally starting to shift away from that with the pipeline progress that we've seen. How are you thinking about the company's ability to manage through that LOE? I know you've talked about some of those pieces...
Yeah, yeah.
in the presentation here, but just your confidence today versus, let's say, 16 or 18 months ago when you took the CEO seat.
Yeah. Well, hopefully you're getting the sense my confidence is quite high.
Yeah.
No, you know, as I sit here today, do I think we're done? I don't. I don't want anyone to believe that we're taking our eye off the ball or we're not focused. We are. As I was saying in the prepared comments, if you look at the progress we've made in 15 months, that's why I wanted to give the brief point around the cardiometabolic space. We weren't talking about cardiometabolic 15 months ago.
Mm-hmm.
We weren't talking about the ability to bring this many new targeted therapies outside of KEYTRUDA, as well as in ADCs, and the small molecules you saw us talk about. Those didn't exist 12, 24 months ago, we're making progress. As I sit here today, we continue to aspire to grow through the LOE of KEYTRUDA. You know, we'll see whether we're able to do that. We've got more work to do. At a minimum, I'm quite confident that we are making meaningful progress in both lessening the impact and shortening the time before we will definitely be back to strong growth into the next decade. That's where our focus is.
You know, as I think about it and what I've been talking with the folks inside of Merck, and I've been talking with some folks here today, increasingly, we're starting to talk less about 2028.
Mm-hmm.
It's not 2028. you know, we're talking about, do we have a sustainable engine? If you have a sustainable engine, you know, 2028 will take care of itself.
Sure.
We are starting to really build that engine. I have a ton of confidence in what Dean and his team are doing, the progress they're making. So as we sit here today, I'm feeling good. I'm feeling good.
Good to hear. Good to hear. Maybe first starting on business development, I know it's a big topic for the story. Just elaborate a little bit more on your priorities and how you're thinking about kind of size and stage and what's really the sweet spot for Merck at this point as you think about capital deployment.
Yeah. You know, as we sit here today and as we just commented a moment ago, it starts with the science.
Yeah.
We always start with, is there a scientific opportunity that we see to an unmet need? Once we see that, we ask, how does it inform the portfolio? Does it fit in the portfolio? What's the strategic fit, and we can drive value? As we drive that strategy, I can tell you, we tend to see more of that, and our focus is in smaller bolt-on acquisitions.
Mm-hmm.
Increasingly, in more recent time, it's been through collaborations, licenses, and partnerships. That's why I wanted to highlight in the prepared remarks, because I think people often wanna talk about the acquisition. They forget that every one of these collaborations we're doing, we're accessing great science, and we're usually doing it through relationships that are 3, 4, or 5 years in the making, so we know these assets, we know the people behind them. We have a lot of confidence in them. That strategy is gonna continue, focusing more on that bolt-on. We're obviously opportunistic and willing to consider anything that fits that framework, but it always starts science. Does it meet value? If it does, and obviously, we wanna make sure we're not disruptive to what we have in-house.
That's the way we think about it, and you're gonna see us continue to do more as we move forward into 2023, as what we've been doing in the past. I can tell you, as we sit here today, we have several opportunities we're looking at, as we speak, so hopefully we'll have more to bring forward as we move later into the year.
In that context, can I just when I think about if the deals are skewing maybe towards smaller acquisitions or collaborations, the company generates a tremendous amount of cash. Balance sheet's healthy. How do you think about whether it's share repo or further interest, the dividends? Like how do you think about where that the cash flow goes going forward?
Yeah. Well, the capital allocation strategy we follow first and foremost is we're gonna invest in the business.
Mm-hmm.
We're gonna invest first in R&D. We're gonna invest in ensuring we have the capacity to drive commercially the products once the demand is there. We're committed to the dividend. We're gonna continue to drive and grow the dividend. Beyond that, as I look at how we think about the remaining free cash flow that's there, I think the best path to long-term value creation is about reinvestment back into the business. There's plenty of opportunities and great science for us to invest in. I think we're showing that, we're demonstrating that. That is first and foremost where we will go. To your point, we've been very clear, we will not sit on excess cash if we don't see the opportunity. Over time, if we don't see that opportunity, we will return it to the shareholders.
Right now, based on the portfolio of what we see out there, I wanna see those things play themselves out.
Okay.
before I give up that dry powder, because I think everyone out here wants us to invest for sustainable long-term growth, and that's what we're gonna do.
Yeah, absolutely. And maybe just one last question on this. When you think about the landscape for acquisitions, it seems like on one hand, biotech valuations have been depressed. On the other hand, it seems like if you're going for kind of really well-positioned science, et cetera, those may not be the assets that are seeing the pressures that some others are. How do you think about the landscape right now in terms of accessibility of assets?
Yeah. You know, and I think you almost hit upon it in your comment, which is, to me, it is more of a have and a have not. I mean, obviously, we have seen from a macro perspective, biotech valuations have come down. For those assets in those companies that are showing promise, they're still able to get capital.
Mm-hmm.
Frankly, in what we've seen recently, when people have had positive data readouts, the prices are still rising and performing quite well, and the premiums they're expecting are still there. As we see it, you know, with the type of assets we're looking at, I haven't seen a fundamental shift. That being said, you know, I believe either through ability to have asymmetric view of information or of the science and/or synergies we bring, we can still find deals that make sense and create value, even if you don't see that repricing. Acceleron is the best example of that. You know, our scientists came forward, they had conviction based on the work we were already doing in the space, and said, "This is real. This is important.
You need to move." We met, I put a lot of confidence in the team. We got ahead of the phase III data, it paid off. You know, that's the way we're going to continue to pursue that. I think on the oncology side, you've seen a lot of opportunities or examples where those synergies we bring through the leverage we now have, people wanna work with us, and that... That's what's driving our business development. I think that'll bring forward progress, even if we don't see a valuation change in the marketplace.
Great. Great. Question for Dean? If you think about the mRNA personalized cancer vaccine that you're working on with Moderna, can you just help put this program and data into context, both, I guess, in melanoma and kind of directionally where this could go? Like, it seems like you're pretty excited about the data from what I was hearing there.
Yeah. I got asked this at a different forum, so I just wanna make sure that we emphasize. When we talk about GARDASIL, we're talking about essentially a cancer vaccine. It's a preventative cancer vaccine. When we're talking about this personalized cancer vaccine, it's essentially a therapy, right? It's taking a bunch of neoantigens, personalized neoantigen and trying to tickle the immune system. I think it's very important that we understand that this is a therapy. In some sense, people talk about immuno-oncology plus immuno-oncology. They talk about the two different checkpoint inhibitors. This is a checkpoint inhibitor plus another I-O agent.
Mm-hmm.
When we look at the data, you know, the bar is high for adjuvant melanoma when you have KEYTRUDA. I mean, that bar itself, when you saw the approval just for that, was high. For the ability for a personalized cancer vaccine that's being used as a therapy on top of that to have a 44% reduction in melanoma, it catches your attention.
Mm-hmm.
It feels a little bit like the 2012, 2013 sort of inflection when we were first getting the initial readouts of KEYTRUDA in melanoma in the first place.
Mm-hmm.
Now, this is phase II data. We have a lot of work to do. The question that arises is: Is this limited to melanoma? Are there other immune-sensitive cancers? The track record of the immune-sensitive cancers is where KEYTRUDA works. How broad is this among different tumors, and how early and how late can it go? We have a lot of work to do, but we are excited because this has been a holy grail for the field for 20 years to make a personalized cancer vaccine that can work as a therapy. We have a hint that it can work, and we have a lot of work to do it, and we're gonna move very fast with Moderna, who we are very lucky to have had a six-year partnership on this program.
When I look at your I-O kind of opportunities you're developing, how would you rank this one versus whether it's TIGIT or other...
Which kid do I like better than which?
Yes, exactly.
Is that right? So they're all different.
Mm-hmm.
We'll have to see how they play out. The personalized cancer vaccine clearly has to be something important when you see a phase II readout with a 44% improvement over KEYTRUDA that already has, what? A substantial improvement.
Mm-hmm.
In terms of the checkpoint inhibitors, we are very interested in the checkpoint inhibitors. I know people I was asking about TIGIT. We have a very good molecule. It's very specific. It's very potent. We have eight clinical trials. I think five are registrational. Not only are we expanding our partnership with Moderna in terms of personalized cancer vaccine, we listed a 5th registrational trial, KEYVIBE-010, just over December. I've tried to advance in both of them.
Okay. It's not an either/or necessarily approach. Maybe just last one on, as I think about the KEYTRUDA franchise, just the role of subcu and how we think about the programs you have there and the timelines for those to move forward.
Let me just sort of reset because there are different contexts of how people talk about subcu KEYTRUDA. I can tell you how I think about it.
Mm-hmm.
I think about it as scientific innovation that drives access to life-saving medicine. If you have, especially in the early stage, you have patients, they don't wanna be tethered. They can't be tethered to an infusion center. If you can remove that for them. You will increase access, not just in the cities, but in the world, throughout the United States, but in other countries. This is important innovation. We think that that's a huge place. When you have KEYTRUDA working with an oral agent, and you can remove the infusion center, that's a huge place. I think there's some debate, and not everyone agrees with me, but I actually worked in a healthcare system. I believe that even when you have an infusion medicine plus infusion KEYTRUDA, if I change it to subcu, I can really, really limit the time that you spend in an infusion center and also stage it in the quite correct sequence, depending on the sequencing of other drugs.
We're very excited to move to a different route of administration because we think it's a way to use scientific innovation to produce access to life-saving medicine. We have a series of programs in relationship to subcu. Some of them are in phase III, some of them are moving to phase III quickly. They're all gonna read out before the 2028 sort of LOE. We're interested in advancing them. Some of them will be 2023, 2024, 2025. That would be the timing that we're looking at.
Will you kind of wait for one of them to kind of pick up?
I can just tell you that at least for me, the one that I really think is important is the one that allows me to give both Q3 weeks and Q6 weeks is going to be really important.
Okay.
That one is the pembro with the hyaluronidase. That gives you the most optionality for patients, for health systems, and for that concept that we want, which is advancing scientific innovation to make sure that there is access to life-saving medicine.
Great. Rob, on GARDASIL, this product clearly has exceeded expectations for you consistently here. I know you talked about $11 billion-plus in 2030 sales. What do we need to do to bridge from where we are today to get to that peak sales level? The second piece of that would be, is that peak or is that just, you know, can this actually get even much larger than that?
Yeah
... given.
Well, you know, if you look at where we are in the journey, obviously it starts with a growing recognition, which I think is now really taking hold, that, as Dean said, this is a cancer vaccine, which is important. We're gonna continue to drive it. If you look across the global population, there still is huge unmet need and it's pretty under-penetrated. The focus areas, how can we drive geographically to drive for greater reach? Continue to drive for gender neutral. There still is a situation, an underappreciation that it's not only protecting the female, you need to get the male protected because that brings protection for the female. Increasingly, people are recognizing there are a lot of cancers that affect the males as well, head and neck and others, that it's important that you bring both.
We're going to continue to drive for gender neutral, and then increasingly, we're now, as we start to bring online additional capacity, we can start to drive also into the mid-adult population. We've obviously been limited to trying to do it more in the pediatric setting because we were limited in the, what we had. As we go to having an unconstrained situation, we'll be able to go more fully across all of these areas. If you look at where we are today, actually in 2023, we're bringing online 2 new bulk facilities.
Mm.
Those will be ramping up between 2023 and 2025. As we get to 2025, we will be unconstrained in our ability to drive global demand. In the meantime, we've shown we can drive productivity in our existing facilities. That's why we've been able to drive the growth we've had, and I'm confident you're gonna see us grow. We're very confident in hitting the $11 billion number. I don't wanna get into predictions beyond that, let's just say that the global need is still significant, and we're committed to trying to address it.
Great. The one on the vaccine side is the pneumococcal franchise. I know this is one that it seems like an area Merck's pretty excited about. It feels like the Street, I'll say skeptical, but is trying to still get their hands around where Merck, you know, the role Merck plays here, just given some entrenched competition. Can you just help us in terms of what you think the Street... what we're kind of missing here and that's giving you such confidence in your role?
Yeah. Maybe I'll start commercially, and then Dean can comment as well. You know, I think, one, there's a misnomer that if I just have more serotypes it's better. You know, more is better. That is not necessarily true, because what Dean showed on the slides and what we're really focused on, the serotypes that cause disease in infants is very different than the serotypes that cause disease in adults. We really are taking a more of a bespoke approach to this in how we're thinking about it. You know, what's very important as you think about in the pediatric setting, with VAXNEUVANCE, we show very good protection in the first year. We'll have to wait and see what the competition does.
Mm-hmm.
Importantly, if you can't show protection in the first year, where 45% of the pneumococcal disease happens. It's in the first year. If you think of your first 18 years of life, it's actually 45% of all disease is in your first year. It's very important that you have coverage that way, not only by the time you get the full booster in the 3 plus 1, but before you get the booster. We're gonna have to see how that plays itself out. If you look in the adults with V116, you know, as Dean talked about, we're able to cover 85% of the residual disease in what we're gonna have with V116. 30% more than even what PCV20 would have, and with serotypes that are different and driven for the adult disease.
Our approach is to make it very bespoke, specific to children, specific to adults. you know, it's going to be a commercial battle, I have no doubt. I will tell you that I have a lot of confidence in our clinical profile. As we sit here today, this is a market roughly $7 billion in 2020. It's probably gonna be $13 billion-$14 billion by 2030. This is a large and growing market, and I am quite confident we're gonna have a meaningful portion of it. How much depends on how some of these dynamics in the final clinical profile play themselves out when we see the full suite of data once all the products are in the market.
Great. Great. Maybe just in the last minute or so here, I know we're gonna probably get guidance in a few weeks here, but can you just talk about pushes and pulls for 2023 that we should be keeping in mind for the story?
Well, you know, as I made the comment, if you think about our underlying growth drivers, you're gonna continue to see good growth in our oncology portfolio, in our vaccines portfolio. You know, I would highlight, you know, LAGEVRIO was a very important product for what it did for COVID patients in 2022. Through the third quarter, we have about $4.9 billion in revenue. We're guiding to $5.2 billion-$5.4 billion for the full year of 2022. We're gonna see, you know, meaningfully less than that as we look at 2023, just given what's happening with the pandemic and the fact that there's still a lot of inventory of LAGEVRIO in the marketplace.
That is gonna be a headwind, but actually from a margin perspective, that's a tailwind.
Okay.
Because it actually our margins, it's a drag on our margin, and so our margins are going to go up as we look at that. Beyond that, the JANUVIA JANUMET situation, while we feel very good about the fact that we potentially have now proven out we can extend in the United States through 2026, we'll see. We won a court battle that gives us that. It's being appealed. As of right now, we have protection in the U.S. through 2026. For the rest of the world, namely in some of the big markets, China and Europe, we've already lost protection. We will see that LOE hit in 2023 versus 2022. The other two areas, obviously, foreign currency continues to be a headwind. Pricing is a headwind.
With all that said, we are confident you're gonna see good growth, and you're gonna see margin expansion.
Great. We're just about out of time. Really appreciate the comments. Thanks for joining us.
Great. Thank you.
Thank you. Thank you.
Thanks so much. We'll see you later on.
All righty.