Analysing the business of Merck and Davanrik

The recommendation is that, Merck should license the new drug Davanrik. The company is facing serious situation that most of their drug patents are going to expire soon. For maintaining company’s value and profit, it is vital to invest into new drug development. In the other part of the report, a preamble of Merck and Davanrik, decision support data and the answers of important questions are provided in detail.

Merck

The Company is discovering new innovative products and developing new indications for existing products – the result of its continuing commitment to research (Annual Report, 2000). Several products face expiration of product patents in the near term. U.S. product patents expired in 2000 for Vasotec and Pepcid and will expire in 2001 for Prilosec, which is supplied

What Citation Styles Can You Use for My Essay?

Students often ask, “Can you write my essay in APA or MLA?”—and the answer’s a big yes! Our writers are experts in every style imaginable: APA, MLA, Chicago, Harvard, you name it. Just tell us what you need, and we’ll deliver a perfectly formatted paper that matches your requirements, hassle-free.

exclusively to AZLP, Prinivil and Prinzide, for which co-marketing rights have been licensed to a third party, Mevacor and Vaseretic. In the aggregate, domestic sales of these products represented 19% of Merck human health sales for 2000 (Annual Report, 2000). The patent expiration can cause deeper drop in overall sales. (Merck’s Consolidate Balance Sheet: See Appendix A)

Davanrik

Davanrik originally developed by Lab Pharmaceutical Company to treat depression. Lab Pharmaceutical offered Merck to license her new developing drug. Lab Pharmaceutical is only 15 years old company. FDA has recently denied to approval one of their drug which completed all three phases. In response to this decision, Lab lost 30% of her overall sales. As a result, LAB was hesitant to issue additional equity to finance the testing of Davanrik and was seeking a larger pharmaceutical company to license the drug and provided the following facilities:

Needed Cash

Fund for clinical testing

Is It Legal to Use Your Writing Service?

Absolutely, it’s 100% legal! Our service provides sample essays and papers to guide your own work—think of it as a study tool. Used responsibly, it’s a legit way to improve your skills, understand tough topics, and boost your grades, all while staying within academic rules.

Manufacturing and Marketing

Royalty on the eventual sales of Davanrik

Decision Support Data

Merck

The patent of Merck’s most popular drug is going to expire by 2002

How Much Does It Cost to Get a Paper Written?

Our pricing starts at $10 per page for undergrad work, $16 for bachelor-level, and $21 for advanced stuff. Urgency and extras like top writers or plagiarism reports tweak the cost—deadlines range from 14 days to 3 hours. Order early for the best rates, and enjoy discounts on big orders: 5% off over $500, 10% over $1,000!

Expiration of Patent can cause a deeper drop in overall sales.

Merck needs new drug development to maintain its values and refresh portfolio.

The company sales reflect continuous growth in earnings.

The success of Davanrik would keep Merck &Company in the black for the following seven years, while the failure of Davanrik would ultimately force Merck &Company to quickly develop other profit producing drugs.

Will My Use of This Service Stay Private?

Yes, totally! We lock down your info with top-notch encryption—your school, friends, no one will know. Every paper’s custom-made to blend with your style, and we check it for originality, so it’s all yours, all discreet.

Davanrik and Merck

Davanrik is drug compound for treatment of depression and neurological disorders.

Its need 7 years or more to approve form FDA in three phases.

Phase I would take 2 years. It was expected to cost $30 million, including an initial $5 million fee to Lab for licensing the drug.

There was 60% chance that Davanrik would successfully complete Phase I

Do You Use AI to Write Papers?

No way—our papers are 100% human-crafted. Our writers are real pros with degrees, bringing creativity and expertise AI can’t match. Every piece is original, checked for plagiarism, and tailored to your needs by a skilled human, not a machine.

Phase II would take 2 years. It was expected to cost $40 million, including $2.5 million fee to Lab.

Phase III trial would cost $200 million including a $20 million payment to lab.

Merck & Co. should analyze the following different types of factors to make a decision to license Davanrik:

Expected revenue

Why Choose You for Research Papers?

We’re the best because our writers are degree-holding experts—Bachelor’s to Ph.D.—who nail any topic. We obsess over quality, using tools to ensure perfection, and offer free revisions to guarantee you’re thrilled with the result, even on tight deadlines.

Expect royalty fees to lab

License fees for each phase

Success probability at each phase

Marketing cost

Who’s Writing My College Essays?

Our writers are top-tier—university grads, many with Master’s degrees, who’ve passed tough tests to join us. They’re ready for any essay, working with you to hit your deadlines and grading standards with ease and professionalism.

Merck responsibility at each phase

Phase I

Testing would cost $30 million including $5 million to lab

Total duration of phase 2 years

Probability of Success 60%

Are Your Papers Original?

Always! We start from scratch—no copying, no AI—just pure, human-written work with solid research and citations. You can even get a plagiarism report to confirm it’s 95%+ unique, ready for worry-free submission.

Phase II

Testing would cost $40 million including $2.5 million to lab

Total duration 2 years

Probability of success for depression only 10%, for weight loss 15% and for both 5%

Can You Match Any Citation Style?

You bet! From APA to IEEE, our writers nail every style with precision. Give us your guidelines, and we’ll craft a paper that fits your academic standards perfectly, no sweat.

Phase III

Cost and success probability are depend on the result of phase II

Testing would cost for depression only $200 million including $20 million to Lab and probability is 85%

Testing would cost for weight loss only $150 million including $10 million to Lab and probability is 75%

Can I Update Instructions Mid-Order?

Yep! Use our chat feature to tweak instructions or add details anytime—even after your writer’s started. They’ll adjust on the fly to keep your essay on point.

Testing would cost for both (Depression and Weight loss) $500 million including $40 million to Lab and probability is 70%

Depression only cost $250 million to launch with a PV of $1.2 billion

Weight loss only cost $100 million to launch with a PV of $345 million

Both depression and weight loss would cost $400 million to launch with a PV of $2.25 billion

How Do I Get an Essay Written?

Easy—place your order online, and your writer dives in. Check drafts or updates as you go, then download the final paper from your account. Pay only when you’re happy—simple and affordable!

Overall Failure Risk

Questions and Answers

Should Merck bid to license Davanrik? How much should they pay? 

There is an extreme risk of failure in taking Davanrik. However, pharmaceutical drug producing industry does have to be risk seeking, because no any drug can get an approval. It is recommended that Merck & Co. should accept Lab pharmaceutical offer for Davanrik. The expected value of Davanrik is around $14 millions.

What is the expected value of the licensing arrangement to LAB? Assume a 5% royalty fee on any cash flows that Merck receives from Davanrik after a successful launch. 

LAB would also receive a 5% royalty fee on any from future sales of Davanrik separate from the milestone payments and regardless of the costs associated with getting the drug to market.

How Fast Can You Handle Urgent Deadlines?

Super fast! Our writers can deliver a quality essay in 24 hours if you’re in a pinch. Pick your deadline—standard is 10 days, but we’ll hustle for rush jobs without skimping.

Expected value of the licensing arrangement to Lab:

Phase I (100% chance of success): $5 million

Phase II (60%): 2.5 million

Phase III depression (10%): $20 million

Phase III weight loss (15%): $10 million

Can You Tackle Complex Essay Topics?

Definitely! From astrophysics to literary theory, our advanced-degree writers thrive on tough topics. They’ll research deeply and deliver a clear, sharp paper that meets your level—high school to Ph.D.

Phase III both (5%): $40 million

Depression Success (85%): $1.2 billion * 0.05

Weight Loss Success (75%): $345 million * 0.05

Depression Success [Lower path] (15%): $1.2 billion * 0.05

Weight Loss Success [Lower path] (5%): $345 million * 0.05

How Do You Meet My Professor’s Standards?

We tailor your paper to your rubric—structure, tone, everything. Our writers decode academic expectations, and editors polish it to perfection, ensuring it’s grade-ready.

Both Success (70%): $2.25 million * 0.05

How would your analysis change if the costs of launching Davanrik for weight loss were $225 million instead of $100 million as given in the case? 

Analysis is depending on the success probabilities and failure risks. At phase III, there is only 5% chance of success on weight loss. BY using decision tools the values will be calculating again.

What other issues should Merck consider in taking this decision? 

What’s Your Editing Process?

Upload your draft, tell us your goals, and our editors will refine it—boosting arguments, fixing errors, and keeping your voice. You’ll get a polished paper that’s ready to shine.

Merck & Co. should consider the cost of marketing, administration and overall sensitivity of each testing phase. The royalty, cost and overall failure risk is also vital factors to be considered for the decision. Merck should also consider that their drugs’ patents are going to expire and their many other drugs are not approved by the FDA.

How has Merck been able to achieve substantial returns on capital given the large costs and lengthy time to develop a drug? 

Merck & Co. is a big and economically stable company which can afford large costs and lengthy time to develop a drug. In other hand Lab pharmaceutical is a small company which is not very flexible to handle such type of task. Research and Development is the strength of Merck. Once the drug approve, Merck can produce it for long time period.

Appendix A

Source: Merck’s Annual Report 2000

Appendix B

Source: Unknown

Tags: #1 Dissertation Writing, Best assignment help, Cheap Essay Writing, Dissertation Writing and Write My Essay Solutions