FIN-516 – WEEK 2 – MINI – CASE
Merck & Co., Inc. by M. Luisa Ribeiro 1. Merck & Co., Inc. is a company in the Pharmaceutical Sector.
The headquarters are in Whitehouse Station, NJ but it has global presence providing prescription pharmaceuticals, animal health, and consumer care, which include animal health, consumer care products and pharmaceutical medicines which include vaccines, biologic therapies. Merck’s products are marketed directly and through joint ventures. 2. Merck’s operating risks:
Merck’s operating risks include recently expired and expiring patented medications which are and soon will be facing market competition from generics, and fewer that optimal products in the development stage to be brought to market. Additionally, some European countries, in an effort to reduce and curtail costs as they are coping with the effects of austerity measures, are imposing a mandatory switch to generic drugs.
Some disappointing results of new products in the development stage are posing a risk to the company that needs to stay in compliance, particularly in the face of law suits for past and current medications under Merck’s patent.
With changing environment in the health care field in the US, Merck’s efforts to expand operations and distribution to developing countries, also posed a challenge to the company, as developing regions, such as Africa and developing countries such as India, China, Russia and Brazil, that may not offer a stable political, regulatory or free market environment conducive to the desired expansion. The payment terms for developing countries tend to be longer than the terms granted to buyers in the US, which could translate in increased accounts receivable, and Days Sale Outstanding, which could result in higher required Working Capital. 3. Merck’s financial risk (the debt to total capitalization ratio):
As of Dec 31,