Merck and Forest Labs: Comparing Apples and Oranges?
Centuries old Merck & Co., Inc., one of the top 10 pharmaceutical companies in the world, has built its reputation for developing and manufacturing a wide range of drugs - both prescription and over-the-counter - in its own labs and factories. In contrast, only 55 years old, fast-growing Forest Laboratories has risen largely through forming licensing agreements with small specialty drug companies. In this case, students analyze the two companies' R&D/Sales and Sales/Intangibles ratios in the context of their different business models to determine what these ratios reveal about the companies' future profit potential.
Case id: 120101
Supplemental Materials: Teaching Slides, Excel Spreadsheets