More Merck Merger Update FAQs, Tonight. . . .

Nothing very momentous here, but here it is -- just filed with the SEC, this evening:

. . . .Published in the [Merck] Daily on August 3, 2009

Q. Will we still close in the fourth quarter of 2009? How long does the full integration process take after we close?

A: Integration planning is going very well, and we are still on track to close in the fourth quarter of this year. As for how long the integration process will take after the close of the merger, it varies from a few weeks to a few months to even a few years, depending on what is being integrated, the country involved, structural and legal considerations, and a variety of other factors. For example, to meet commercial goals, a company typically would consider moving swiftly post merger to align its sales teams. Yet a company that is integrating multiple manufacturing sites might take much longer and go through a detailed process due to quality, production and environmental issues.

Q. What happens if the vote is "no" at the August 7th special shareholders' meetings, when shareholders of each company vote on whether to merge Merck and Schering-Plough?

A. We fully anticipate that the shareholders of both companies will approve the merger.

Q. What is the emerging market strategy for the newly combined company?

A. In December 2008, Merck outlined a goal to be in the top 5 in key emerging markets (China, India, Korea, Russia, Poland, Turkey and Brazil). Given the anticipated growth rates of these markets over the next 5 years, it is essential that we win in this space.

The merger with Schering-Plough will accelerate our efforts in these critical markets by broadening our product portfolio and providing an opportunity to expand our commercial infrastructure.

Q. What's happening with Remicade and J&J now?

A. We are not able to comment about the Remicade arbitration with Johnson & Johnson.

Q. What are our plans for the Schering-Plough Consumer Health unit?

A. It will be integrated into the new Merck as of Day 1. [Ed. Note: No mention of what happens after Day 1, though.]

Q. How is the merger with Schering-Plough going to help us with our pipeline, and help bring more Phase III drugs to market?

A: Schering-Plough is an innovation-driven, science-centered global health care company. Over the last 6 years, Schering-Plough has transformed into a strong competitor in the global pharmaceutical industry, including the successful move of drugs from pipeline to the marketplace. Among the many benefits of combining the R&D expertise and scientific leadership from both companies are:

⌂ A significant increase in the number of potential medicines in Phase III development

⌂ A reinforcement of Merck's commitment to the cardiovascular therapeutic area, including the addition of Schering-Plough's thrombin receptor antagonist, a potential first-in-class antiplatelet therapy

⌂ Scientific strength in the treatment of HIV and HCV, including Schering-Plough's strong portfolio of HCV candidates, such as bocepravir

⌂ Numerous complementary products and pipeline candidates, in respiratory, oncology, neuroscience, and women's health among other key therapeutic areas

Q: I recall hearing that Schering-Plough has 60 manufacturing sites. Why are we initiating a facility construction in Arecibo? Aren't there existing facilities or resources that can be used?

A: Once the merger is complete, our manufacturing network will expand from 24 to 92 sites because of the additional 68 Schering-Plough sites. Despite this pending expansion, we are building in Arecibo because we need a unique facility for the preparation of new pharmaceutical products in the intermediate development phase -- that is, still in clinical testing and at a point where the company is working on determining how best to scale up and manufacture them. Investing in Arecibo provides the right solution at the right time, independent of the merger.

Q. Many people are fearful that sites will close or their jobs will move to other locations. Why can't you tell us anything about the facilities decisions that are being made for the new Merck?

A. We appreciate the questions and concerns employees have. The Facilities Integration Team is moving as quickly as possible to identify and evaluate each of the Merck and Schering-Plough sites. Next, the team will develop a plan to best serve the needs of the combined company. The evaluation of these facilities and their future roles is a complicated process and will occur over time and in consultation with key stakeholders. Absolutely no actions on facilities will take place on or before Day 1. As soon as we are able to share any facilities decisions, we will do so.

Q: There could be different practices and interpretations between Merck’s and Schering-Plough’s compliance programs. How will we handle issues of compliance from Day 1 forward?

A. We believe that both Merck and Schering-Plough share a common vision on issues of compliance and ethics. Of course, there will be certain areas that will need increased planning and focus because of the merger. The Integration Management Office, along with the Office of General Counsel and our business practices and compliance leadership, will provide appropriate guidance for compliance and ethics by Day 1.

Q: When will the new organization be announced? Can you tell us what it might look like?

A. Over the coming weeks, Dick Clark will be finalizing his views on the structure of the new Merck and the major organizations that will make up the new company, as represented on the Executive Committee. He will then in turn identify his leadership team. Once he has determined who that team is, those individuals will work on designing the high-level division and function structures for the company, and begin the process of selecting the next level of leaders. These levels are commonly referred to as EC+1. We expect to announce these leaders by late August. . . .

Things may get busy, on the news front, with the shareholders' merger votes (at both companies), looming. . . .