The Stoning of Soraya M

p Launch both 400 CF -970 2250 1 ,280 .6 .05 .7 0 .021 26 .88 (Phase 1 , 2 3 success - pursue both and launch both

Launch depression only 250 CF -820 1200 380 .6 .05 .15 0 .0045 1 .71 (Phase 1 , 2 3 success - pursue both but launch only depression )Launch weight loss only 100 CF- -670 345 325 .6 .05 .05 0 .0015 -0 .4875 (Phase 1 , 2 3 success - pursue both but launch only weight loss (Phase 1 2 success 3 failure - pursue both ) CF- -570 0 570 .6 .05 .1 0 .003 -1

.71 (Phase 1 failure ) CF- -30 0 30 ) 0 .4 0 .4 -12 (phase 1 success and 2 failure

CF- -70 0 70 .6 .7 0 .42 -29 .4

NET PRESENT VA :LUE OF DAVANRIK LICENSING 13 .98 The above net present value statement provides us with the information that the NPV of the drug Davanrik is 13 .98 million for a given period The project has to be taken up due to the positive cash flows that it generates , in spite of its huge out flows in the first few years . By bidding for the drug , Merck would retain its brand position in its customers that it is a research oriented drug manufacturing company which is sensitive to the needs of the customers and identifies solutions that meets their the needs and wants

Even investors are attracted to companies that are research driven and have a vision to establish as a pioneer in research , which are values that Merck has always stood for . The day that its customers or investors find out that no significant research is happening at the company , they would be tempted to try another company that offers similar solutions and has equal brand value . Hence , Merck would suffer...