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ACC - Merck Co Paper Case




Question;1. How has Merck been able to achieve substantial returns to capital given the large costs and lengthy time to develop drugs?2. Build a decision tree that shows the cash flows and probabilities at all stages of the FDA approval process.3. Should Merck bid to license Davanrik? How much should they pay?4. How would your analysis change if the costs of launching Davanrik for weight loss were $225 million instead of $100 million?5. 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.


Paper#40291 | Written in 18-Jul-2015

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