Assignment task:
Title: Merck
Source:
Article: Merck & Company: Evaluating a Drug Licensing Opportunity By RICHARD S. RUBACK
Directions: Write 4 to 5 sentences for each questions
1. 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.
2. How would your analysis change if the cost of launching Davanrik for weight loss were $225 million instead of $100 million as given in the case?