So those of us who want to advance, what I would say, in ADC and NextGen chemo, that’s how I think about it, have to think about a way to combine it with PD-1 in a way that is not just effective, but substantially effective over KEYNOTE-189. We are very interested in advancing our TROP2 ADC in relationship to that and that combination, like all chemotherapy based treatments, whether it’s chemotherapy or whether it’s chemotherapy on a payload with ADC, one has to think about adverse effects and combinatorial adverse effects and the ability to keep patients on the medicines. The data that we have shown with our partner, our valued partner Kelun is that we think that there is room to be able to advance MK-2870 and PD-1 in a variety of tumors and that they are combinable, tolerable and will be effective, but those are the trials that we are starting to do in Phase 3 in the ex-China regulatory arena.
Rob Davis: Thank you, Carter. Next question please, Julie.
Operator: Thank you. Our next question comes from Seamus Fernandez with Guggenheim. Your line is open.
Seamus Fernandez: Well, thanks so much for the question. So just wanted to talk about margins and some of the margin targets that you have offered, I think historically, you called out 2024 margin target of better than 42%, just trying to get a better sense of how we are tracking towards that target, particularly in the context of the substantial reduction in your royalty burden both for KEYTRUDA and GARDASIL. And if you wouldn’t mind, would you perhaps disclose what that cumulative royalty burden was in the third quarter of this year, just so that we can provide some context for the upside case or at least what we should be anticipating there? Thanks so much.
Caroline Litchfield: Seamus, thank you for the question. We have seen really strong margin expansion in our company over the last several years, and as we look-forward, we expect continued margin expansion and that margin expansion really comes from the product mix on the revenue line, it also comes from the roll-off of royalties, as you have just noted, knowing that we have the royalty on global KEYTRUDA sales going from 6.5% to 2.5% at the start of next year and our royalty on GARDASIL going from 7% to zero percent on our global sales, again, at the start of next year will drive significant gross margin improvement. At the same time, we will be investing in our business. We will be disciplined in that investment, but we are investing in the portfolio of products that we have in the market and that we will be launching, as well as investing in our robust and growing pipeline and that obviously includes the Daiichi collaboration, where we have noticed we expect about a $0.25 impact as a result of investing predominantly in the research and development of a wide range of programs, that Dean has partially outlined, as well as this financing costs.
We also have made significant progress across our pipelines with many other collaborations, acquisition and the progress we are making with our own internal assets. So, altogether, we still do point to an operating margin of greater than 43% in the year 2025. However, we will not forgo necessary investments in our business to progress our pipeline to ensure that we have advance healthcare and drive growth, which really is our priority.
Rob Davis: Great. Thank you, Seamus. Next question please. Julie.
Operator: Thank you. Our next question comes from Terence Flynn with Morgan Stanley. Your line is open.
Terence Flynn: Great. Thanks so much for taking the question. I guess, another one for Dean on the TROP2 landscape. I know you guys talked over the weekend about your first Phase 3 trial in lung cancer here. Maybe just any more context on the decision to pursue the EGFR mutant population, given what you are seeing from the landscape out there, including some of the Astra data and then what that means for the front-line setting as you try to craft a trial in that broader population? Thank you.
Dr. Dean Li: Yeah. So I just want to make sure that whether we are talking about our wonderful partnership with Kelun or with Daiichi Sankyo, we sort of lay out certainly indications that become public, but I want to be very clear that those are not the only indications that we would be interested. So that’s number one. Number two, in relationship to MK-2870 and advancing it more broadly and it relates to the other question, there is — we still have small numbers, but what’s really interesting for us for 2870, there are differences in the construct in terms of payload, in terms of the linker, in terms of the dart for that. And one of the things that’s interesting to us is at least to-date, we do not see serious IOD and that allows us to think broadly and thoughtfully about its combined ability in relationship to broader indications.
So we are very interested in advancing. In terms of 2870 and the specific first trial that’s been revealed, it’s — I will just tell you, it was driven, because of the data that we have and the data that we have we think is quite good and should be advanced. We are going to advance other ones, but the advancement in the EGFR new population is based on data that our partners Kelun and us have generated and we are very confident in advancing in that specific indication.
Rob Davis: Thanks, Terrence. Next question please, Julie.
Operator: Thank you. Our next question comes from Andrew Baum with Citi. Your line is open.
Andrew Baum: Hi. Thank you. Question in relation to trastuzumab and your KEYNOTE-003 trial. I am assuming that you are using a similar type clinical trial design and template for the stats from KEYNOTE-42, where you have a hierarchy. Given this is a PD-L1 enriched trial and with the hierarchy in place, we are expecting an interim potentially the very end of next year, beginning of the following year. Any comments on either design or timing of entrants? Thank you.
Dr. Dean Li: I would just say that in general principle, your observations of how we develop drugs, especially in the IO has been something that we are known for and the structure was laid out by great leaders from Merck, who laid the basis for that. In relationship to timing of interim analysis, we have generally not commented on interim analysis and we let those interim analysis do what they need to do, which is come and if they are significant, we make that publicly known. If there is significance in relationship to public disclosure, that’s when we do that, but we generally do not lay out the timing of our interim analysis prior to them happening.
Rob Davis: Thanks, Andrew. Next question please, Julie.
Operator: Thank you. Our next question comes from Louise Chen with Cantor. Your line is open.
Louise Chen: Hi. Thank you for taking my question. I wanted to ask you about sotatercept, how you are preparing for that launch, what’s your go-to-market strategy and how quickly you expect uptake to be? Thank you.
Rob Davis: Yeah. Louise, this is Rob. I will maybe jump-in and Caroline can add if I miss anything. I would tell you that we feel well-prepared. So, obviously, we have been working to ensure we have supply to be able to supply the market upon launch. But as we sit here today, given what is happening in the marketplace. So you are seeing warehousing of patients in anticipation of the launch of sotatercept in the United States. And from feedback from key opinion leaders and what we are hearing from the market, the demand for this will be quite high. So our expectation, as you will see a strong launch with this drug and I can tell you we have been invested and built an organization, we actually have a very focused group now in our U.S. — within our U.S. business whose sole job is to manage this launch.
