potential side effects relating to obesity. LAB approaches Merck & Co., Inc. (Merck) and asks the company to license Davanrik, as well as funding the clinical testing. Merck must decide whether or not to bid to license Davanrik and if so, at what price. Discussion Merck is facing patent expiration problem because most of its popular drugs are going to expire by 2002. Patent expiration will lead to a substantial loss of sales. Therefore, Merck must develop new compounds quickly to refresh its portfolio
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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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Problem Definition Should Rich 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
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Table of Content | |Page | |1. Executive Summary…………………………………………………………… |1 | |2. Main Report…………………………………………………………………….. |2 | |3. Bibliography……………………………………………………………………..
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Should Rich 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
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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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Royalty Fee. In Phase 1, Merck has to pay LAB 5 million initial investment no matter whether Davanrik will get approved by FDA in future. In Phase 2, Merck has to pay LAB 2.5 million Milestone payment if Davanrik successfully complete Phase 1 with a probability of 60%. In Phase 3, the amount of milestone payment Merck has to pay depends on the result of Phase 2. If Davanrik successfully complete phase 2 and was effective only for depression with the probability of 10%, then Merck has to pay 20 million
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Case 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
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CHAPTER 8 Managing Capacity PROBLEMS Additional homework problems are available at www.prenhall.com/bozarth. These problems use Excel to generate customized problems for different class sections or even different students. (* = easy; ** = moderate; *** = advanced) 1. (*) The Shelly Group has leased a new copier that costs $700 per month plus $0.10 for each copy. What is the total cost if Shelly makes 5,000 copies a month? 10,000 copies? What is the per-copy cost at 5,000 copies
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rich belittle them. He hopes to get rich someday and have big birthday parties with the kids. He also wants a big tree house for the kids too. The family seems very intimidated by their rich
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