strategic-management

EXHIBIT 1 Merck’s Recent Acquisitions and Divestitures
Year Event
CASE 26 • MERCK & COMPANY INC. — 2009 253
2000 Provantage Health Services Inc. for $12.25 per share.
2001 Acquired Rosetta Inpharmatics, Inc. for $635.0 million.
2003 Completed the spinoff of Medco Health Solutions Inc. Co. Distributed 270,000,000 shares to its shareholders.
2004 (1) Acquired all the remaining interest in Banyu Pharmaceutical Company, Ltd. that it did not already own.
(2) Acquired Aton Pharma, Inc.
(3) Sold its 50% equity stake in Johnson & Johnson MSD Europe to Johnson & Johnson.
2006 (1) Launched the mercksource Doctor’s Bag, a new online search tool available only on mercksource.com.
(2) Acquired Sirna Therapeutics, Inc. for $954,100,000 in cash.
2007 Completed the acquisition of Novacardia, Inc. for $366.4 million.
2009 Acquired Insmed Inc.’s INS-19 and INS-20 products and related intellectual property for $130,000,000 in cash.
Schering-Plough acquisition pending.
Source: Based on information at www.merck.com.
AB, Schering-Plough, and many more. Exhibit 1 provides a summary of Merck’s recent
acquisitions and spinoffs.
In 2004, Merck withdrew their well-known drug Vioxx after a company-sponsored test
found there could be an increased risk of heart attack and stroke for those who took the medication
after 18 months of daily usage. From 2004 to 2007, as a result of a class-action lawsuit,
the company appeared in several courts and hearings. Finally, in late 2007, Merck entered into
a settlement agreement with the plaintiff’s Steering Committee and paid the claimants $500
million in August 2008 and an additional $250 million in October 2008.
A primary measure for the success of a drug manufacturing company is the number
of new products introduced and approved by the U.S. Food and Drug Administration
(FDA). Exhibit 2 reveals Merck’s organizational structure before the Schering-Plough
EXHIBIT 2 Merck & Company: Organizational Structure
President
Global
Pharmaceuticals
President
Global Vaccines
& Infectious
Diseases
EVP
Global Services
& CIO
Chairman,
President
& CEO
VP &
CCO
EVP & CFO
VP & Treasurer
EVP
Global Human
Resources
EVP
President
Merck Mfg