Merck: What we Look for in a Licensing Partner

1. Merck: What we Look forin a Licensing Partner Susan Rohrer, PhD Senior Director Licensing & External Research Merck Research Laboratories ASENT Annual Meeting Bethesda, MD March 5, 2010

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, 2008, 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. 2

3. Agenda Merck: Background & Partnering Strategy Criteria for Licensing Neuroscience Research and Licensing The Licensing Process at Merck

4. Merck is a Global Health Care Leader with Diversified Portfolio Therapeutic Area Schering-Plough Products Merck Products Cardio / Metabolic Infectious Disease Respiratory Women’s Health Arthritis / Immunology Oncology

5. Merck’s R&D Strategy: Science-Based Diversification of our Portfolio Patient Population Approaches Modalities Merck’s R&D Strategy:Science-Based Diversification of Merck’s Portfolio • Primary Care • Specialty Care • Hospital Setting • Novel • Best in Class • Lifecycle Management • Small Molecules • Vaccines • Biologics • Peptides • RNAi

6. Atherosclerosis and Cardiovascular Diseases Lipids / Metabolic Syndrome Hypertension / Cardiovascular Other Areas Biologics Follow-on Biologics Novel Biologics Biologic Technologies Bone, Respiratory, Immunology, and Endocrine Arthritis and Immune-Based Diseases Asthma / COPD Bone Sarcopenia Urology and Women's Health Diabetes and Obesity Infectious Diseases and Vaccines Antibacterials Antifungals Antivirals – HIV Antivirals – HCV Antivirals – Other Interests Antiviral and Anti-infective Technologies Vaccines General Areas of Interest for Licensing & Partnership Neurosciences and Ophthalmology Alzheimer’s Disease Circadian Disorders Migraine Ophthalmology Pain Parkinson’s Disease Psychiatric Diseases Oncology Research Technologies RNA Therapeutics Enabling Technologies Target Identification / Validation Biomarkers Lead Identification and Screening Assays Biologics Production Methods Synthesis and Purification Modeling Tools Universal Platforms Automated Workflows Information Technology / Software Analytical Technology • We have aligned our areas of interest with our franchises, plus new technologies and biologics. • Additionally, Merck will continue to pursue external licensing opportunities in other disease areas where clinical proof of concept exists. • Merck will also pursue niche acquisitions and partnerships in diagnostics and devices where it complements our pipeline, and not as a stand-alone business. Updated October 2009 6

7. Select transactions: 2007-2009/2010 Licensing Aligns with Franchises and New Technologies Anti-Infectives/ Antivirals/Vaccines Cubist DNDi Idera MBL/Medarex OrchidPfenex Ranbaxy UT, San AntonioWellcome Trust Oncology AriadAstraZeneca Celera Dana Farber Piramal Life Sciences Diabetes/Obesity AmbrxEnvoy GalapagosMarcadia Bone/Respiratory/Inflammation/Endocrine GalapagosGTx (Endocrine) Harvard University (Osteoporosis) Japan Tobacco (Osteoporosis) CNS/Ophthalmology Addex (PD & Schiz) Gladstone Institutes Santen TechnologiesAdimabAvecia Biologics* DepomedInsmed* MicroDoseNuevolution Cardiovascular CardiomeGalapagos KineMed PortolaXenon 1pre-merger *acquisition 7

8. External Discovery and Preclinical Science:Current Collaborations

9. Agenda Merck: Background & Partnering Strategy Criteria for Licensing Neuroscience Research and Licensing The Licensing Process at Merck

10. For Academic Collaborations, Merck’s Approach is Driven by Strategy • Defining goals and delivering against a work plan are the keys to a successful collaboration. • Well defined goals are critical • Funding is based on the scientific work plan, not for general lab support • Milestones / Renewal based on delivering on objectives • Intellectual property is important, but not the whole story • License to pre-existing IP sometimes, but not always • An exclusive option period to license new IP arising from the Collaboration • Merck is mindful of the university’s mission and obligations • Create a structure that is consistent with university policy 10

11. Desirable Attributes of a Therapeutic Candidate • Satisfies an unmet medical need • Novel target • Is it validated? • Will the molecule be first in class? Best in class? • SolidIP position • On the target • Freedom to operate and methods of treatment • On the molecule • Composition, synthetic routes, polymorphs, etc • Potential for changing standard of care • Biomarker strategy is a plus

12. Demonstrable Attributes of an Attractive Therapeutic Candidate • Potency in-vitro and in-vivo • Mechanism -- evidence that agent “hits the target” in animals • Minimally a pharmacodynamic assay • Ideally, activity in a validated animal model • Selectivity vs. a large range of receptors, enzymes, ion channels • Predictable pharmacokinetics and proper dose selection • Preliminary tolerability and toxicology data • Oral bioavailability (for small molecules) • Good half-life for biologics or small molecules • Licensor understands the competitive environment and can describe strengths and potential weaknesses of the molecule • Clinical efficacy if molecule is sufficiently advanced • Understanding of the regulatory environment

13. Agenda Merck: Background & Partnering Strategy Criteria for Licensing Neuroscience Research and Licensing The Licensing Process at Merck

14. Defining the Neuroscience Strategy at Merck • Create an innovative & sustainable environment to lead in the discovery, development, and marketing of differentiated therapeutics for chronic, disabling disorders of the nervous system and eye that will be valued by patients, physicians, and payers. • Focus on therapies for: • Alzheimer’s Disease • Schizophrenia • Pain & Migraine • Also interest in: • Sleep Disorders, Parkinson’s Disease, Depression, Ophthalmology, Tobacco & Alcohol Abuse

15. Merck Neuroscience Franchise at a Glance • New approach to the treatment of migraine • Telcagepant (MK-0974): First-in-class oral antagonist of calcitonin gene-related peptide (CGRP) • Develop new approaches for the treatment of sleep disorders • Potent and selective orexin antagonists for insomnia and related disorders • Multiple novel mechanisms in preclinical and early clinical development and complemented by strong basic research portfolio across: -- Alzheimer's Disease -- Schizophrenia -- Pain -- Migraine -- Sleep -- Depression -- Parkinson's Disease -- Alcoholism -- Ophthalmology (siRNA approach)

16. Gladstone Institute – Innovative Therapies for Alzheimer’s Disease • Major collaboration with Dr. Robert Mahley of the J. David Gladstone Institute to develop drugs directed to the ApoE pathway • Apolipoprotein E4 has been linked to a variety of neurodegenerative diseases including Alzheimer’s • ApoE4 expression is a major risk factor for developing AD • Blocking ApoE4-induced neuronal damage may lead to disease modification strategies • Merck and Gladstone will conduct a joint research program to discover modulators of ApoE4 function. Gladstone will receive milestone payments and product-based royalties. • Another example of innovative early-stage partnering by Merck

17. Agenda Merck: Background & Partnering Strategy Criteria for Licensing Neuroscience Research and Licensing The Licensing Process at Merck

18. There is a highly refined licensing process OpportunityInitiation OpportunityEvaluation ManagingPartnerships Doing the Deal • 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 • Senior scientific management approval • 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

19. We Constantly Scan for Partnering Opportunities 2008 Alliances 46 6000 Licensing Opportunities 2000 Reviewed at RLC* 569 Reviewed under a CDA Key Acquisitions & Signed Agreements *Representation from IBR (Biology and Chemistry), EBR, Clinical, Marketing (inc. Commercial Group Leader and New Products Leader), Alliance Management, Portfolio Management, GCI, and other areas

20. Collaboration Creates Value Combining our Strengths Sharing our Successes Merck • Novel technology application • Development • Commercialization expertise • Subject Matterexpertise Partners • Discovery • Innovation • Subject Matter expertise 20