Merck Chairman Raymond Gilmartin Tells Stockholders That New Products Anchor Merck's Future.

WHITEHOUSE STATION, N.J.--(BUSINESS WIRE)--April 27, 1999--

"Our 14 new medicines -- along with VIOXX and other candidates in our pipeline -- will be important drivers of future growth and profitability," said Merck Chairman, President and CEO Raymond V. Gilmartin at today's annual meeting of stockholders.

Mr. Gilmartin gave an overview of the results of 1998, calling it a "banner year" in which the Company "launched a record number of new medicines with proven health benefits and significant worldwide market potential." He said that the Company looks forward "with great confidence to a prosperous 1999 and a healthy future," because of new products, the drug research pipeline, investments in marketing, and the April 20 recommendation for approval of VIOXX by the Arthritis Advisory Committee of the U.S. Food and Drug Administration (FDA).

VIOXX

VIOXX, Merck's once-a-day COX-2 specific inhibitor for osteoarthritis and pain, has been evaluated in 68 clinical studies involving more than 10,000 patients and has demonstrated single-dose relief compared to traditional NSAIDs, like ibuprofen. Traditional NSAIDs inhibit the COX-1 enzyme in the body that protects the stomach lining, as well as the COX-2 enzyme involved in pain and inflammation, and those drugs contribute to severe gastrointestinal bleeding, accounting for 10,000-20,000 deaths and 100,000 hospitalizations annually. COX-2 specific inhibitors, such as VIOXX, are being studied to determine whether the apparent differences in how they work may result in fewer serious gastrointestinal side effects compared to those traditional therapies. "The enormous worldwide market for pain and for osteoarthritis is largely unsatisfied by existing treatments," said Mr. Gilmartin. Osteoarthritis afflicts more than 20 million people in the U.S. alone.

Success around the World

In 1998, sales and net income increased 14 percent over 1997, to $26.9 billion and $5.2 billion, respectively. Earnings per share, assuming dilution, increased 15 percent to $2.15.

Merck remained number one in U.S. and in worldwide pharmaceutical sales. The Company's core pharmaceutical sales grew at 8 percent in the Americas and 15 percent in the Europe--Middle East--Africa region. The growth rate in Europe is nearly twice the industry average, making it the fastest growing pharmaceutical company there. Despite the overall downturn in the Asian pharmaceutical market, highlighted by a 7 percent decline in Japan, Asia Pacific sales increased 1 percent, to $1.6 billion.

Merck recently announced the first quarter results for 1999. Sales were up 24 percent, totaling $7.5 billion. Net income was $1.3 billion, up 12 percent, and earnings per share, assuming dilution, were $0.54, up 15 percent, compared to 1998.

New Products Drive Growth

Mr. Gilmartin said, "Our five newest products, introduced in a six-month time period last year, are improving the quality of life for millions of people around the world." SINGULAIR, Merck's once-a-day tablet for the treatment and prevention of chronic asthma in adults and children as young as six--has become the most prescribed member of the leukotriene antagonist class in the U.S. in less than one year on the market. COSOPT, the world's most successful anti-glaucoma combination product, continues to gain broad acceptance by ophthalmologists because of its effectiveness and ease of use. MAXALT, available in conventional as well as convenient, orally dissolving tablets, is the fastest growing oral migraine medication in the U.S. and other key markets. AGGRASTAT, a platelet blocker for patients with unstable angina (chest pain) and non-Q-wave myocardial infarction (small heart attacks), was recommended for approval by the European Union's Committee on Proprietary Medicinal Products in March. And more than 590,000 men worldwide have started taking PROPECIA, the first and only tablet for the treatment of male pattern hair loss, since its introduction last year.

1998 sales were increasingly driven by those five medicines as well as nine other medicines introduced since March 1995: COMVAX, COZAAR and HYZAAR, CRIXIVAN, FOSAMAX, PEPCID AC, TRUSOPT, VAQTA, and VARIVAX. Together, the 14 new medicines accounted for 22 percent of Merck's worldwide human health sales, up from just 2 percent three years earlier. For example, COZAAR and HYZAAR, the world's fastest growing anti-hypertensive medicines, achieved $1 billion in worldwide sales in 1998. FOSAMAX, the leading worldwide non-hormonal medicine for the prevention and treatment of osteoporosis in postmenopausal women, is the only such drug approved by the FDA to prevent hip and spine fractures. CRIXIVAN, available in more than 80 countries, is the world's most widely prescribed protease inhibitor for the treatment of HIV/AIDS.

With the recent introductions, Merck's research pipeline has extended the Company's marketing presence into 19 therapeutic categories in 1998, up from 11 in 1992. The older products, such as VASOTEC, MEVACOR, and PEPCID, continue to contribute, Mr. Gilmartin said, "But we are well prepared for the U.S. expirations of their patents." Patent expirations are less of an issue abroad, as their timing is staggered over several years.

Further, Merck continues to conduct landmark clinical trials to demonstrate the value of its innovative medicines to patients, providers, and payors to answer concerns about health care costs and to address competition. The results of these studies have rewarded Merck with steady growth in key franchises. For example, ZOCOR, the second-best-selling medicine in the world, was shown to have an excellent safety profile over the five-year ZOCOR survival study. It continues to save lives and prevent strokes in patients with heart disease and high cholesterol, as well as lower triglycerides and reduce LDL "bad" cholesterol -- the only drug in its class that can make all of these claims.

Merck-Medco

Merck-Medco Managed Care posted an excellent performance in 1998, managing more than 322 million prescriptions, up 11 percent from 1997 and representing more than $14 billion in drug spending.

"Merck-Medco's competitive edge lies in the excellence of its clinical programs, its commitment to client and customer service, and its effective use of information technology," said Mr. Gilmartin. In referencing Merck-Medco's use of information technology, Mr. Gilmartin described how Merck-Medco Managed Care Online provides Merck-Medco plan members fast and convenient access to prescription refills and accurate, up-to-date health information on a site that uses the strongest encryption technology on the Web to assure privacy and security. Visits to merck-medco.com rose from 600,000 per month last summer to over 5 million in March.

Looking Ahead

Merck is bringing new compounds into development at a faster pace. "We will significantly increase our investment in R&D to $2.1 billion in 1999," said Mr. Gilmartin. "We have reinvested some of our gains from manufacturing productivity in 700 additional professional representatives in the U.S. and in worldwide marketing capabilities to make sure the uniqueness and medical value of our new and established products are well understood."

Edward M. Scolnick, M.D., Executive Vice President, Science and Technology, and President, Merck Research Laboratories, gave stockholders an overview of ongoing post-marketing studies being conducted on recently introduced products. Dr. Scolnick also reviewed the progress of certain projects in the research pipeline, including VIOXX, as well as another COX-2 inhibitor, the substance P program for depression and chemotherapy-induced emesis, and other compounds for bacterial infections, asthma, several types of cancer, and infant diarrhea.

Merck & Co., Inc. is a leading, research-driven pharmaceutical products and services company. Merck discovers, develops, manufactures and markets a broad range of innovative products to improve human and animal health, directly and through its joint ventures. Merck-Medco Managed Care manages pharmacy benefits for employees, insurers and other plan sponsors, encouraging the appropriate use of medicines and providing disease management programs. Through these complementary capabilities, Merck works to improve the quality of life and contain overall health-care costs.