lo que impide la pérdida de ventas de medicamentos que van fuera del tiempo de la patente. Los nuevos fármacos son bien desarrollados por la investigación interna (la mayoría) mediante la colaboración con empresas de biotecnología. El producto: Davanrik Davarnik fue desarrollado por los productos farmacéuticos LAB, un producto farmacéutico pequeño y relativamente joven especializada con compuestos para el tratamiento de trastornos neurológicos. Originalmente estaba destinada para el tratamiento
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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 the expected
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Merck Case Study Questions Instructions: We will discuss the Merck case in class on Thursday, February 20, 2014. In preparing for our class discussion, please focus on the following questions. 1. How has Merck been able to achieve substantial returns to capital given the large costs and lengthy time to develop drugs? - New product process: Merck is real fast in marketing drugs, as it develops cross-functional teams and starts marketing early in the development process only - through
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years to become marketable. In order to offset this, Merck is considering the purchase of the licenses for Davanrik from LAB Pharmaceuticals. Davenrik has just completed pre-clinical development and is ready for the clinical approval process of 7 years. If purchased, Merck would be responsible for the clinical trial process. Merck has hired us to determine if it should buy the licenses of Davanrik from LAB Pharmaceuticals. Merck has retained us to determine the financial viability of entering into
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FINA 6092 Advanced Financial Management 2014-15 Term 1 Case questions Case #A: Butler Lumber Company Questions 1. Why does Mr. Butler have to borrow so much money to support this profitable business? 2. Do you agree with his estimate of the company’s loan requirements? How much will he need to borrow to finance his expected expansion in sales (assume a 1991 sales volume of $3.6 million)? 3. As Mr. Butler’s financial advisor, would you urge him to go ahead with, or to reconsider, his anticipated
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probabilities at all stages of the FDA approval process. 3. Should Merck bid to license Davanrik? How much should they pay? Is this the STATEMENT OF THE PROBLEM? 4. 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. 5. 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?
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Should Merck license the compound? Merck would be responsible for 1) the approval of Davanrik 2) the manufacture of Danavrik 3) marketing of Danavrik Merck would pay LAB for 1) initial fee 2) royalty on all sales 3) make additional pymts as Danavrik completed each stage of approval process (3 Phases) Additional facts: approval process should take 7 years patent will cover 17 years (7 of approval process nad 10 yr period of exclusivity beginning in yr 7) 1 Assumptions: All Cash flows
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Case #1: Butler Lumber Company Questions 1. Why does Mr. Butler have to borrow so much money to support this profitable business? 2. Do you agree with his estimate of the company’s loan requirements? How much will he need to borrow to finance his expected expansion in sales (assume a 1991 sales volume of $3.6 million)? 3. As Mr. Butler’s financial advisor, would you urge him to go ahead with, or to reconsider, his anticipated expansion and his plans for additional debt financing? As the banker, would
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#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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years to become marketable. In order to offset this, Merck is considering the purchase of the licenses for Davanrik from LAB Pharmaceuticals. Davenrik has just completed pre-clinical development and is ready for the clinical approval process of 7 years. If purchased, Merck would be responsible for the clinical trial process. Merck has hired us to determine if it should buy the licenses of Davanrik from LAB Pharmaceuticals. Merck has retained us to determine the financial viability of entering into the
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