Premium Essay

Merck Decision Tree

In: Business and Management

Submitted By carribgurl
Words 354
Pages 2
Effective
#NAME? -$200,000,000.00 #NAME?

85.0% -250,000,000

#NAME? #NAME?

Test

Not Effective
10.0% 0 Phase III: Long Term Efficacy Testing #NAME?

15.0% 0

#NAME? #NAME?

Depression

Don't Test
#NAME? -$40,000,000.00 Indications #NAME?

#NAME? 0

#NAME? #NAME?

Test

Effective #NAME? -$150,000,000.00 #NAME?

75.0% -100,000,000

#NAME? #NAME?

Test

Merck Decision Tree Although a decision analysis would recommend that Merck not commit to the proposal, the company's balance sheet shows that it has significant assets to support a loss. The projected values of earning for depression and dual indications seem to be worth the risk. Weightloss does not.

Not Effective
15.0% 0 Phase III: Long Term Efficacy Testing #NAME?

25.0% 0

#NAME? #NAME?

Obesity

Don't Test

#NAME? 0

#NAME? #NAME?

Dual Indications

50.0% -400,000,000

#NAME? #NAME? #NAME? #NAME?

Depression: effective
#NAME? 0 Indications #NAME?

15.0% -250,000,000

Conduct

Depression: not effective

10.0% 0

#NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?

Obesity: effective

5.0% -100,000,000

Obesiity: not effective

10.0% 0

Complete Failure
70.0% -$500,000,000.00 Phase 4: Additional Trials #NAME?

10.0% 0

Effective

Do not conduct
#NAME? 0 #NAME?

#NAME? 0

#NAME? #NAME?

Test

Not Effective
5.0% 0 Phase III: Long Term Efficacy Testing #NAME?

30.0% 0

#NAME? #NAME?

Both

Don't Test
70.0% 0 #NAME? #NAME?

#NAME? 0

#NAME? #NAME?

Neither
60.0% 0 Phase II Efficacy Testing #NAME? Don't Test #NAME? -$30,000,000.00 Phase 1: Efficacy testing #NAME? #NAME? 0 #NAME? #NAME?

Pass

Test

Fail
Preclinical Analysis Test #NAME?

40.0% 0

#NAME? #NAME?

Davanrik Licensing Decision Tree

Cost Testing costs Launch Costs Total Projected value Net Gain

Depression only $520,000,000

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