Team 5 Merck Final - 2

Overview and
Analysis
Vishaal Patil
Jonathan Florez
Saisarath Buddhavarapu
Harsh Rohan Sistla
Introduction & History
Originally Angel Pharmacy, Merck & Co., Inc. has built a good
reputation through over a century of activity
1668 - Acquired by apothecary Jacob Fredrick Merck
d.b.a.Merck Sharp & Dohme(MSD) outside the United States and Canada,
Headquarters Kenilworth, NJ
Established in 1891 as a subsidiary of the German country

As a result of US government intervention shortly after, Merck became an
independent company
1816 - Emanuel Merck (descendant of the founder) took over the company
7th largest pharmaceutical company in the world according to

market cap and total revenue

An Early Timeline: Its all in the family
1891
George Merck emigrated to the United States and established Merck & Co.
partner E. Merck (nowMerck KGaA)
1917
US government intervention forced the company to cease & desist in
accordance with a confiscation due to wartime policy
1945
End of WWII the year that George W. Merck concluded his company leadership
Today
Merck & Co. hold the rights to the name in North America, while its former
parent company retains the rights in the rest of the world.
Approximately 70,000 employees across 120 countries

along with a global total of 31 factories as of 3/31/2015
Philanthropy (Merck Foundation, est. 1957)

Over $480 million to educational and non-profit organizations
$740 million in overall charitable distributions)
Financial Issues & Actions

10/2013
Downsized company size by 8,500 employees
Shares rose 2.35%
Acquisitions
6/2014: Acquisition of Idenix Pharma
12/2014
$8.4 billion acquisition of buy Cubist Pharma announced
Swiss Biotech OncoEthix acquistion
Accomplishments & Knowledge
Preventative healthcare products
Vitamin B1 discovery
Measles vaccine creation
Cold remedies
Antacids
Cholesterol treatments
Animal health items
In line with their core values, for humans who eventually consume
meat from these animals, Merck provides farms the opportunity to
ensure quality animal products
This is also aligned with general life improvement and scientific
excellence in diverse fields
Merck Manuals
A series of reference books for various medical professionals
Merck Manual of Diagnosis and Therapy is the world's best-selling medical
reference
2012 - Highly respected and competent complications lead to acquisition of The
Merck Index by theRoyal Society of Chemistry
Vision & Mission

We aspire to improve the health and wellness of the people around the
world by expanding the access to our Medicines and Vaccines
Core Values
Dedication to Life Improvement and scientific excellence

Superior integrity
Product access expansion
Workforce diversification to foster collaborative values
Our ability to excel depends on the integrity,

knowledge, imagination, skill, diversity and teamwork
of our people
Competitive Intelligence, Strategic Advantages and Responses
Monsato Vioxx
Mercks disadvantage and late response led to a loss
Marketing
Unique marketing through cross-functional teams allows for early
development processes
Early entrance & innovation

Merck is leading in the market as it provides the patents for the
patients in order to access the medicines which cannot be
attained by any other pharma company
Ideal IT infrastructure updates concurrent with industry changes
Organizational culture allows for constant improvements and
innovation
Competitive Intelligence, Strategic Advantages and Responses
Alliances
Timely R&D investment
Brand Name Reputation
Strong and leading financial position as a top firm in the
industry
Diversification
Market expansion
Mercks management is really strong with its idea of
investing a large sum of money on research with its idea
that in the coming years it would benefit them a lot with
the ease of taking stand in the market has proved to be
more than beneficial.
Merck SWOT Analysis

Strengths
Strengths
Weaknesses
Weaknesses
Opportunities
Opportunities
Threats
Threats
A strong brand
name in the
pharmaceutical
industry
Huge products
portfolio in
pharmaceutical
industry
Provides medical
help to
underprivileged
people
Excellent R&D
and innovations
Has international
presence
Brand visibility
Problems of fake
imitations affects
the company
Hasnt been able
to aggressively
enter emerging
economies
Broad-based
medical
innovation
Venture into
health needs in
underdeveloped
countries
Leverage its core
business
expertise and
resources to
create
sustainable
solutions in
countries around
the world.
Increase
obsolesce of
technology
Competition from
peers
Vioxx (Rofecoxib, Ceoxx)
NSAID (Non-Steroid
Anti-Inflammatory
Drug.
FDA Approved for
chronic and acute pain
associated with
Arthritis and similar
conditions.
Withdrawn 5 years
after approved.
Vioxx Timeline (1999 2004)
1999: Vioxx was

approved by FDA.
Cardiovascular Risk
2000: 8% increase
2001: 35% increase
2002: 39% increase
2004: 43% increase
Vioxx Timeline (1999 2004)
Merck spent $136

billion on advertising
for Vioxx in 2001.
Pfizer spent almost as
much at $130 billion on
their pain product.
In 2004, advertising
spending was less than
one third for both
companies.
Merck Profits (2002 2004)
Profits declined
after withdrawal
of Vioxx.
Competitor
profits largely
unaffected.
Code of Conduct
Integrity
Respect
Transparency
Courage
Achievement
Responsibility
Code of Conduct
The Details
Office of Ethics
Method of Operations is aligned with the importance of their

work
Strong management oversight promoting first-class ethical

standards
Office of ethics Mission

Actively supports commitment to the highest standards of
ethics that promotes the prevention, detection and
resolution of potential misconduct.
Protects companys ethical standards to prevent illegal,

unethical and improper behavior related to companys
business.
Ethics
Safeguards to protect privacy of personal information
Honest and transparent in communicating about the products
Reduces potential conflicts of interest
Reminds internal reporting of potential violations of code of conduct and

policies
Insists on equivalent standards dorm suppliers
Employees are loyal in accounting
Ethics constantly in action
12/7/2012 Merck foundation ended donations to theBoy Scouts of Americabecause of "its policy that
excludes members on the basis of sexual orientation", which "directly conflicts with the Merck Foundation's
giving guidelines.
Economic Impact
Economic contribution to society is made through

discovery, development, manufacturing and marketing
products
Revitalizing the research caused progress with candidates

like MK-3475 and anti-PD-1 immunotherapy for oncology
The financial department of Merck caused a decline in their

sales, expenses, number of employees and number of
stockholders of record
Impacts
Global cancer cases continue to rise, Merck tries to reduce

these cases and help them
Each year around the world, 14 million people suffer with

cancer
Mercks sales soar on measles vaccine after Disney outbreak
Sales of Merck grew 24 percent to 348 million $

Merck tested childrens blood using its own attenuated strain
of virus
As news spreads, use of Mercks vaccine rises
Merck VS Pfizer Ltd.
Pfizers current dividend yield is 3.3%, Mercks is 3.10%.
Pfizers free cash flow is a little more stable.
Pfizer peaked at $49.99 per share, Merck peaked at $91.51

per share.
Both stocks are fairly valued, at current prices.

MS-Ventures (MSV) vs. Pfizer Venture Investments (PVI)
To foster technology and innovation, building relationships

with other biotech companies is crucial
PVI Established 204

MSV Established 2012
Portfolios
PVI 25 Companies
Focused on US Companies
MSV 23 Companies

MS-Ventures (MSV) vs. Pfizer Venture Investments (PVI)
Budgets
PVI - $10M per company, $50M per year
MSV controls three separate funds
MSV Fund $108,542,500
Joint ventures, mergers, etc.
Entrpreneur Partnership Program

Spin-offs
Israel Bioncubator fund

Pre-seed and seed opportunities in Israel
Pfizer VS Merck Ltd.
References:
Timeline: The Rise and Fall of Vioxx. (2007, November 10).

Merck settles Vioxx lawsuits for $4.85 billion. (2007,
November 13).
Mercks webpage (Merck.com)
Merck & Co (By Stephanie Weiss and Bollier)
Merck Companys History (Wikipedia.com)
Innovation Ethics and Core Values (Gilmartin, 1998)
Venture Investments (Pfizer.com)
About Us, News (ms-ventures.com)

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What is the history of Merck & Co?

What is the history of Merck & Co?

How has Merck contributed to healthcare?

How has Merck contributed to healthcare?

Overview and

Introduction & History

Established in 1891 as a subsidiary of the German country

7th largest pharmaceutical company in the world according to

Introduction & History

Introduction & History

Approximately 70,000 employees across 120 countries

Philanthropy (Merck Foundation, est. 1957)

Financial Issues & Actions

Accomplishments & Knowledge

Preventative healthcare products

Vision & Mission

Dedication to Life Improvement and scientific excellence

Our ability to excel depends on the integrity,

Competitive Intelligence, Strategic Advantages and Responses

Early entrance & innovation

Competitive Intelligence, Strategic Advantages and Responses

Merck SWOT Analysis

Vioxx (Rofecoxib, Ceoxx)

Vioxx Timeline (1999 2004)

1999: Vioxx was

Vioxx Timeline (1999 2004)

Merck spent $136

Merck Profits (2002 2004)

Method of Operations is aligned with the importance of their

Strong management oversight promoting first-class ethical

Office of ethics Mission

Protects companys ethical standards to prevent illegal,

Safeguards to protect privacy of personal information

Honest and transparent in communicating about the products

Reduces potential conflicts of interest

Reminds internal reporting of potential violations of code of conduct and

Insists on equivalent standards dorm suppliers

Employees are loyal in accounting

Ethics constantly in action

Economic contribution to society is made through

Revitalizing the research caused progress with candidates

The financial department of Merck caused a decline in their

Global cancer cases continue to rise, Merck tries to reduce

Each year around the world, 14 million people suffer with

Mercks sales soar on measles vaccine after Disney outbreak

Sales of Merck grew 24 percent to 348 million $

As news spreads, use of Mercks vaccine rises

Merck VS Pfizer Ltd.

Pfizers current dividend yield is 3.3%, Mercks is 3.10%.

Pfizers free cash flow is a little more stable.

Pfizer peaked at $49.99 per share, Merck peaked at $91.51

Both stocks are fairly valued, at current prices.

Merck VS Pfizer Ltd.

To foster technology and innovation, building relationships

PVI Established 204

Merck VS Pfizer Ltd.

Entrpreneur Partnership Program

Israel Bioncubator fund