Engagement update with Merck & co on animal testing and packaging. By Ffion Spencer * Share * April 27/04/2026, 12:00 AM As part of its ongoing efforts to improve performance across key environmental, social, transparency and governance (E.S.T.) metrics, Castlefield Partners Limited recently engaged with US pharmaceutical company Merck & co., held in the castlefield thoughtful World Equity Fund, to discuss its approach to animal testing, the use of animal-derived ingredients, and packaging practices. At a recent External Advisory Committee meeting, the committee highlighted increasing numbers of animals being used in animal testing across the pharmaceutical sector. Around the same time, Castlefield Partners Limited also received a client query relating to the use of animal derived ingredients in pharmaceutical products. This engagement therefore focused on three material topics for the pharmaceutical industry: animal testing, the use of animal derived ingredients in products, and plastic use. In its initial response, Merck explained that it makes extensive use of non animal research methods, including in vitro techniques, computer modelling and advanced imaging, prior to or instead of animal studies. The company shared that approximately 96% of its research animals are rodents and confirmed that it maintains detailed records on animal use across species, purpose and site, including research carried out by third party organisations on Merck's behalf. As Merck has confirmed that it maintains this data internally, Castlefield Partners Limited has encouraged greater transparency through public disclosure. Castlefield Partners Limited also encouraged the company to consider setting reduction targets on this topic. While this response suggests a baseline level of governance and oversight, Castlefield Partners Limited believe there is scope for further progress. Castlefield Partners Limited has followed up and are awaiting further written responses.Castlefield Partners Limited note that some peers, including French pharmaceutical company Sanofi, which is also held in the World Equity Fund, publish the total number of animals used for scientific research on an annual basis. As Merck has confirmed that it maintains this data internally, Castlefield Partners Limited has encouraged greater transparency through public disclosure. Castlefield Partners Limited also encouraged the company to consider setting reduction targets on this topic. On animal derived ingredients, Merck highlighted the use of specialised tools to identify potential non animal alternatives, indicating consideration of reduction and substitution where scientifically feasible. On plastics, the company shared that it has developed a long term roadmap aimed at reducing the environmental impact of its packaging, suggesting an acknowledgement of plastics as a material environmental issue within its operations. Overall, while Merck provided high level information across all three topics, the most detailed discussion related to animal testing, reflecting its materiality to the sector. Outcome: Its engagement confirmed that Merck has a level of baseline governance on these topics. However, further engagement with the company is required, particularly in relation to transparency and disclosure on the number of animals used in scientific testing. Information is accurate as at 20.04.2026. Opinions constitute the fund manager's judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.

Merck's cancer drug Keytruda has become a pricing flashpoint in US healthcare, with a single 400mg dose billed at $162,567 at a California clinic, despite Merck's list price of $24,000. The drug generated $31.7 billion in worldwide sales in 2025, representing nearly half of Merck's revenue. A joint investigation by the International Consortium of Investigative Journalists and USA TODAY found Merck employs multiple tactics to maintain high prices, including building patent walls against generic competition, lobbying against Medicare price negotiations, and maintaining higher dosing despite studies suggesting weight-based dosing would be effective and cheaper. Whilst Merck CEO Robert Davis pledged support for President Trump's drug pricing initiatives in December, he made no commitments regarding Keytruda. Merck attributes US price inflation to pharmacy benefit managers and insurers who add fees and rebates.

Merck has announced a collaboration with Infinimmune, a California-based biotech founded in 2022, worth up to $838 million to discover new antibody drug candidates. The deal targets multiple undisclosed targets selected by Merck, though upfront payment details were not disclosed. Infinimmune's platform identifies promising antibodies by studying memory B cells from the human immune system. The company claims it can identify antibodies binding to a target within one week and prepare candidates for animal studies in roughly three months. Chief executive Wyatt McDonnell described the approach as building a massive database of immune cell information that can be searched for matching antibodies. The 10-person startup is also developing IFX-101, its lead candidate for moderate-to-severe atopic dermatitis, designed for quarterly or twice-yearly dosing.