INTRODUCTION Merck & Company : Evaluating the Licensing Opportunity Various recently-born biotech companies sell their technologies in either finished or early stage to bigger companies in need of financing capital to preceed business, while those bigger companies acquire technologies to scout for promising profitable business. This sort of process needs numbers of decision makings and agreements from both parties on the valuation methods is crucial here. The valuation method being used has
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|2 | |3. Bibliography…………………………………………………………………….. |6 | 1. Executive Summary In 2002 the patents for the most popular drugs which generated $5.7 billion in worldwide sales would be expired. In order to anticipate the loss of sales, it is recommended to update the product portfolio by investing in the development of patented new products. LAB proposed 17 years exclusivity
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Kender recommend licensing Davanrik, making Merck & Company responsible for its manufacture and its marketing? In order to provide Rich Kender with a good and thorough analysis and recommendation on the Davanrik licensing project, we need to answer the following guidance questions: I. How has Merck been able to achieve substantial returns to capital given the large costs and lengthy time to develop drugs? II. How much should they pay? III. What is the expected value of the licensing arrangement to
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CK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached Merck with
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RUBACK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached Merck with
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RICHARD S. RUBACK Merck & Company: Evaluating a Drug Licensing Opportunity Rich Kender, Vice President of Financial Evaluation & Analysis at Merck, was working with his team to decide whether his company should license Davanrik, a new drug with the potential to treat both depression and obesity. The small pharmaceutical concern that developed the drug, LAB Pharmaceuticals, lacked the resources to complete the lengthy approval process, manufacture the compound, and market the drug. LAB had approached
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Evaluating a Drug Licensing Opportunity Statement of the problem- Merck must determine whether or not to bid to license Davanrik My recommendation is that Merck must definitely make a competitive bid for Davanrik. The total expected value from the deal based numbers given in the Merck article is a healthy $14million so keeping a 20% incentive, Merck should bid no more than $11million for Davanrik as the initial licensing fee. Looking at the background of Merck, it is clear that it is a
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Merck & Company: Evaluating a Drug Licensing Opportunity Case Summary Merck & Company (Merck) a large pharmaceutical company was approached by LAB Pharmaceuticals in 2000 for the purchase option to license and provide funding for a newly developed drug compound called Davanrik. If Merck, the licensee purchased the compound it would be responsible for the design, administration, and funding of the clinical testing of the compound, as well as take care of its manufacturing and marketing
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TEACHING NOTE – Adapted From Harvard Business School MERCK & COMPANY: Evaluating a Drug Licensing Opportunity Substantive Issues The case explores the valuation of an opportunity to license a compound before it enters clinical trials and describes Merck’s decision tree evaluation process. It also provides information to evaluate a specific licensing opportunity, including the costs of the three phases of the review process, the present value of the revenues associated with successful
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report Merck&Co: Evaluating a drug licensing opportunity Background The case is set in the year 2000. Merck&Co. is a global, research-driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human as well as animal health products. It operates directly or through established joint ventures and provides pharmaceutical management services (PBM). During the last 5 years the company has launched 15 new successful products; the most popular drugs generated
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