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Products: Merck & Co., Inc. (MRK)

Mature Drugs & Other(Mature Drugs & Other)
Anti-Infective Drugs(Anti-Infective Drugs)
Oncology Drugs(Oncology Drugs)
Alimentary & Metabolism Drugs(Alimentary & Metabolism Drugs)
Musculoskeletal Drugs(Musculoskeletal Drugs)
Contraceptives(Contraceptives)
Cardiovascular Drugs(Cardiovascular Drugs)
Respiratory Drugs(Respiratory Drugs)

Mature Drugs & Other

What is being offered?

Revenues that are reported in this division consist of those related to the legacy products of Merck and Schering-Plough.

It also includes revenues from other non-reportable segments, including Animal Health and Consumer Care, and revenue from the company’s relationship with Astra Zeneca (AZLP) primarily relating to sales of Nexium, as well as Prilosec. However, Merck has sold its consumer care segment to Bayer and its partnership with AstraZeneca has ended.

Other revenues are primarily comprised of miscellaneous corporate revenues, third-party manufacturing sales, sales related to divested products or businesses, and other supply sales not included in segment results.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

All pharmaceutical companies including branded & generic manufacturers

What buyers care about?

  1. Price of drugs
  2. Side effects
  3. Subsidies available in the form of reimbursements
  4. Availability of drugs

Merck's strengths

  1. Successful business acquisition model
  2. Novel drug delivery systems
  3. Established presence in the market by virtue of big branded drugs
  4. Relentless focus on R&D

Merck's Mature Drugs & Other Sales

This represents the revenues generated by legacy products of Merck & Schering-Plough, revenues from various alliances and diversified revenues which includes animal health and other OTC products.

Other revenues are primarily comprised of miscellaneous corporate revenues, third-party manufacturing sales, sales related to divested products or businesses and other supply sales not included in pharmaceutical results.

Merck's Mature Drugs & Other Sales have declined over the last few years amounting to $10.3 billion in 2017. This can be attributed to competition from generics, Merck's sale of consumer division and termination of venture with AstraZeneca.

Chart: Merck's Mature Drugs & Other Sales

Anti-Infective Drugs

What is being offered?

Anti-infectives are substances that counteract infection and include anti-septics, disinfectants, anti-biotics, anti-fungal, and virucidal agents.

We considered antivirals, cephalosporins (antibacterial), and vaccines to be a part of this segment for the purpose of this report.

Merck has a dominant position in this segment with well-known brands including Isentress, Gardasil, Proquad, and Cubicin.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Gilead, Glaxo SmithKline, Bristol Myers-Squibb, Roche, Novartis, Astra Zeneca, Johnson & Johnson, Pfizer, Sanofi-Aventis, and Abbott Labs.

What buyers care about?

  1. Price of drugs
  2. Subsidies available in the form of reimbursements
  3. Availability of drugs

Merck's strengths

  1. Successful acquisition business model
  2. Creating novel drug delivery systems
  3. Established presence in the market by virtue of big branded drugs
  4. Relentless focus on R&D

Merck's Anti-Infectives Sales

This represents the revenues generated worldwide by Merck’s anti-infectives drugs. We collated historical revenues from some of Merck's key anti-infective drugs including Pegintron, Victrelis, Isentress, Cubicin, Cancidas, Invanz, Noxafil, Primaxin, Gardasil, Proquad/MMR II/Varivax, Zostavax, RotaTeq and Pneumovax. Additionally, we also include probablity adjusted future estimated revenues from anti-infective drugs currently in phase 3 trials.

Merck's Anti-Infectives Sales increased from $7.11 billion in 2010 to $11.3 billion in 2017 driven by growth in vaccines and the acquisition of Cubist.

Chart: Merck's Anti-Infectives Sales

Oncology Drugs

What is being offered?

Oncology is a branch of medicine that deals with tumors. It is concerned with the diagnosis, therapy (surgery, chemotherapy, radiotherapy and other modalities), palliative care of patients with terminal cancers, screening efforts of populations (for hereditary cancers like breast cancer), and follow-up care for successful cancer treatments.

Roche, a Swiss global healthcare company along with its American subsidiary Genentech, is the biggest player in this therapeutic class. It owns some of the top selling brands including Avastin, Rituxan, and Herceptin.

Merck's presence in the oncology space is getting a boost with the launch of Keytruda.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions and mail order pharmacies.

Competitors

Roche(Genentech), Novartis, Pfizer, Lilly, and Takeda

What buyers care about?

  1. Price is the single biggest factor as some cancer treatment prescriptions cost upwards of $50,000 per year
  2. Subsidies available in the form of Medicare & Medicaid reimbursements
  3. Availability of drugs

Merck's strengths

  1. Strong brand name
  2. Creating novel drug delivery systems with emerging developers to enhance product value and efficacy
  3. Focus on R&D
  4. Successful acquisition business model

Merck's Oncology Drugs Sales

This represents the revenues generated worldwide by Merck’s drugs within the oncology segment including Keytruda, Emend, and Temodar. Additionally, this also includes probability adjusted future revenues from oncology drugs in Merck's phase 3 pipeline.

Merck's Oncology Drugs Sales have increased substantially from $505 million in 2009 to $4.6 billion in 2017 primarily due to the success of its immensely promising immuno-oncology drug - Keytruda.

Chart: Merck's Oncology Drugs Sales

Alimentary & Metabolism Drugs

What is being offered?

Alimentary means pertaining to, or caused by, food or nutritive material. The alimentary canal is the portion of the digestive system consisting of the organs making up the route taken by food as it passes through the body from the mouth to the anus; including the esophagus, stomach, and small and large intestines.

Metabolism is the set of chemical reactions that happen in living organisms to sustain life.

Merck has a growing presence in this segment with blockbuster drugs like Januvia and Janumet.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Novo Nordisk, Pfizer, Eli Lilly, Novartis, Johnson & Johnson, GlaxoSmithKline, and Abbott Labs.

What buyers care about?

  1. Price of drugs
  2. Side effects
  3. Subsidies available in the form of reimbursements
  4. Availability of drugs

Merck's strengths

  1. Successful acquisition business model
  2. Creating novel drug delivery systems with emerging developers to enhance product value and efficacy
  3. Relentless focus on R&D

Merck's Alimentary & Metabolism Drugs Sales

This represents the revenues generated worldwide by Merck's drugs within the alimentary & metabolism therapeutic class, specifically, Januvia and Janumet. This also includes probability adjusted future revenues from phase 3 pipeline drugs.

Merck's Alimentary & Metabolism Drugs Sales has increased steadily from under $3.3 billion in 2010 to $5.9 billion in 2017 on the back of substantial sales growth from Januvia and Janumet.

Chart: Merck's Alimentary & Metabolism Drugs Sales

Musculoskeletal Drugs

What is being offered?

The musculoskeletal system is also known as the Locomotor system. It is an organ system that provides animals and human beings the ability to move.It consists of the body’s bones, muscles, cartilage, tendons, ligaments, joints, and other connective tissues.

Merck is the market leader in this segment with well-known brands such as Remicade, a treatment for inflammatory diseases, Fosamax for treatment and prevention of osteoporosis, and Arcoxia for treatment of arthritis and pain, among others.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMO, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Astra Zeneca, Pfizer, Schering-Plough, Bristol-Myers Squibb, Sanofi-Aventis, Glaxo SmithKline, Ranbaxy, Teva, and others.

What buyers care about?

  1. Price of drugs
  2. Subsidies available in the form of reimbursements
  3. Availability of drugs

Merck's strengths

  1. Established presence in the market by virtue of big branded drugs
  2. Creating novel drug delivery systems
  3. Relentless focus on R&D
  4. Successful acquisition business model

Merck's Musculoskeletal Drugs Sales

This represents the revenues generated worldwide by Merck’s musculoskeletal drugs including Remicade, Simponi, Arcoxia and Fosamax. This also includes probability adjusted future revenues from musculoskeletal drugs currently in phase 3 pipeline.

Merck's Musculoskeletal Drugs Sales stood at $4.22 billion in 2011 but declined to $3.54 billion in 2012 due to loss of marketing rights for Remicade. The sales recovered slightly in the subsequent years amounting to $4.05 billion in 2014. However, 2015 onwards sales again saw a sharp decline as Remicade lost its patent protection in Europe where Merck has marketing rights. The figure stood at $2.3 billion in 2017.

Chart: Merck's Musculoskeletal Drugs Sales

Contraceptives

What is being offered?

Contraception refers to various techniques and methods used to prevent fertilization or to interrupt pregnancy at various stages. Contraception includes barrier methods, such as condoms or diaphragms, hormonal contraception (also known as oral contraception), and injectable contraceptives.

Merck has a strong position within this segment with some well known brands such as NuvaRing, Implanon, and Follistim.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Astra Zeneca, Pfizer, Bristol-Myers Squibb, Sanofi-Aventis, Glaxo SmithKline, Ranbaxy, Teva.

What buyers care about?

  1. Effectiveness of drugs
  2. Price of drugs
  3. Subsidies available in the form of reimbursements
  4. Availability of drugs

Merck's strengths

  1. Established presence in the market by virtue of big branded drugs
  2. Successful acquisition business model
  3. Strong R&D focus

Merck's Contraceptives Sales

This represents the revenues generated worldwide by Merck within the contraceptives segment from products including NuvaRing, Implanon and Follistim AQ. This also includes probability adjusted future revenues from contraceptive products currently in phase 3 pipeline.

Merck's Contraceptives Sales increased from $1.32 billion in 2010 to $1.75 billion in 2017, mainly due to growth in NuvaRing and Implanon.

Chart: Merck's Contraceptives Sales

Cardiovascular Drugs

What is being offered?

Cardiology is a medical specialty dealing with disorders of the heart. The field includes diagnosis and treatment of congenital heart defects, coronary artery diseases, heart failure, and other types of heart diseases. Cardiovascular diseases are diseases that affect the heart or blood vessels.

Merck has a strong position within the segment by virtue of well known drugs like Zetia, Vytorin, Cozaar/Hyzaar, Zocor, etc.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Astra Zeneca, Pfizer, Bristol-Myers Squibb, Sanofi-Aventis, Glaxo SmithKline, Ranbaxy, and Teva.

What buyers care about?

  1. Price of drugs
  2. Subsidies available in the form of reimbursements
  3. Availability of drugs

Merck's strengths

  1. Creating novel drug delivery systems to ensure product value and efficacy
  2. Established presence in the market by virtue of big branded drugs
  3. Relentless focus on R&D

Merck's Cardiovascular Drugs Sales

This represents the revenues generated worldwide by Merck’s drugs within the cardiovascular space including Zetia, Vytorin, Cozaar/Hyzaar, and Zocor. This also includes the probability adjusted future revenues from cardiovascular drugs in the phase 3 pipeline.

Merck's Cardiovascular Drugs Sales have declined over the last few years amounting to $2.6 billion in 2017 primarily due to all key drugs losing patent exclusivity.

Chart: Merck's Cardiovascular Drugs Sales

Respiratory Drugs

What is being offered?

The respiratory system is the anatomical system of an organism that introduces respiratory gases to the interior and performs gas exchange. In humans and other mammals, the anatomical features of the respiratory system include airways, lungs, and the respiratory muscles.

Who is buying?

Chain stores (Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMOs, federal facilities, non-federal institutions, and mail order pharmacies.

Competitors

Gilead, Glaxo SmithKline, Bristol Myers-Squibb, Roche, Novartis, Astra Zeneca, Johnson & Johnson, Pfizer, Sanofi-Aventis, and Abbott Labs.

What buyers care about?

  1. Price of drugs
  2. Subsidies available in the form of reimbursements
  3. Availability of drugs

Merck's strengths

  1. Successful acquisition business model
  2. Creating novel drug delivery systems
  3. Established presence in the market by virtue of big branded drugs
  4. Relentless focus on R&D

Merck's Respiratory Drugs Sales

This represents the revenues generated worldwide by Merck's drugs within the respiratory therapeutic class including Dulera, Singulair, Nasonex and Clarinex. This also includes probability adjusted future revenues from respiratory drugs in phase 3 pipeline.

Merck's Respiratory Drugs Sales have declined significantly in the last few years amounting to $1.4 billion in 2017, primarily due to loss of patent exclusivity for Singulair.

Chart: Merck's Respiratory Drugs Sales