AstraZeneca and Merck Establish Strategic Oncology Collaboration $2.4 Bln Upfront to ~$8.5Bln w/Milestones JULY 27, 2017 Collaboration Aims to Maximize the Potential of PARP and MEK Inhibitors in Combination with PD-L1/PD-1 Medicines, Based on Growing Scientific Evidence That These Combinations Offer New Potential for the Treatment of a Range of Tumor Types AstraZeneca and Merck Will Independently Develop and Commercialize LYNPARZA and Potential Medicine Selumetinib in Combinations with Companies’ Respective PD-L1/PD-1 Immuno-Oncology Medicines IMFINZI and KEYTRUDA Collaboration Will Significantly Expand the Potential of LYNPARZA, the World’s First and Leading PARP Inhibitor, as a Monotherapy and as a Backbone of Combination Treatments for Multiple Cancer Types; Agreement Also Includes AstraZeneca’s Selumetinib, a MEK inhibitor The Companies Will Share Development and Marketing Costs Equally, as well as Gross Profits from LYNPARZA and Selumetinib Financial considerations Under the terms of the agreement, AstraZeneca and Merck will share the development and commercialization costs for LYNPARZA and selumetinib monotherapy and non-PD-L1/PD-1 combination therapy opportunities. Gross profits from LYNPARZA and selumetinib product sales generated through monotherapies or combination therapies will be shared equally. Merck will fund all development and commercialization costs of KEYTRUDA in combination with LYNPARZA or selumetinib. AstraZeneca will fund all development and commercialization costs of IMFINZI in combination with LYNPARZA or selumetinib. AstraZeneca will continue to manufacture LYNPARZA and selumetinib. As part of the agreement, Merck will pay AstraZeneca up to $8.5 billion in total consideration, including $1.6 billion upfront, $750 million for certain license options and up to an additional $6.15 billion contingent upon successful achievement of future regulatory and sales milestones. Merck expects to book its share of product sales of LYNPARZA and selumetinib, net of commercialization costs, as Alliance Revenue and its share of development costs associated with the collaboration as part of its Research & Development expense. http://investors.merck.com/news/press-release-details/2017/AstraZeneca-and-Merck-Establish-Strategic-Oncology-Collaboration/default.aspx DIFFERENT STROKES FOR DIFFERENT FOLKS