There is very little lipstick left on this particular pig, one that Fred Hassan, and Carrie Cox, and Bob Bertolini, and Raul Kohan, and Brett Saunders. . . and Tom Sabatino all tricked Merck into kissing -- to the tune of $49 billion, about a year and a quarter ago -- take a look -- let me know if I missed any others:
| Key Image | Drug | Counter Party | Start Date | End Date | Field | Reason |
 | Vorapaxar (SCH 530348) | Internal (Legacy Schering-Plough) | Jan. 2004 | Ongoing, but cur- tailed, in Jan. 2011 (A DSMB Stop) | Cardio/Clots (Thinner) | Safety Board discontinued dosing in stroke patients; in two Phase III studies, due to bleed-through prob- lems(?) Unknown. |
 | Various (Biosciences) | Internal (Legacy Schering-Plough) Organon BioSciences | Oct. 2008 | Nov. 2009 | Bioscience R&D | Allegedly didn't follow Dutch labor laws |
 | Saphris®/Sycrest® | Lundbeck (All Markets, Except US, Japan and China) | Dev. 1996 | Oct. 2010 | Anti-psychotics | Disappointing "Me Too" Sales; Side effects |
 | Schering- Plough Con- sumer Health (Dr. Scholls, etc.) | Internal (Legacy Schering-Plough) | Pre-2000 | In 2011(?) | OTC Health Care | Too much ad- vertising spend required, to sus- tain mature branded items (like Dr. Scholl's), for only $275M in annual sales. |
 | AN-2690 | Anacor Pharma | Feb. 2007 | May 2010 | Anti-Fungal | Non-Core to Merck |
 | Vicriviroc | Internal (Legacy Schering-Plough) | Mid 2005 | Jan. 2010 | HIV | Clanked two separate Phase III trials |
 | Acadasine | Internal (Legacy Schering-Plough) | April 2004 | Aug. 2010 | Cardio | Clinical Futility |
 | AV-299 | AVEO Pharma | April 2007 | Sept. 2010 | Oncology | Non-Core To New Merck |
 | Ampakine® | Cortex Pharma | Jan. 1999 | Oct. 2010 | Anti-Psychotic | Non-Core To New Merck |
 | Remicade®/ Simponi®? | J&J/Centocor | Q1 2004 | Q1 2011(?) | Auto-Immune | Lost Arbitration(?); or settled, unfavorably(?) |
Again, an entirely separate category would be the litigation blunders/hangovers, but that table would take several pages:
So all in, this table likely represents more than $20 billion of "lost" opportunities [if we were to believe, at face value, the prior "puffing" statements of the various Schering-Plough senior executives -- Hassan, Cox, Bertolini, Kohan, Saunders and Sabatino]. Sheesh. Truly unfortunate.
4 comments:
your table should be a lot longer because there are more compounds that got snuffed, but any table will only have a real impact in case the estimated value is shown for each compound imho. Merck's strategy may have been to buy S-P just for a few interesting compounds, and chuck the ones that were kept in the pipeline for window dressing.
Pharma remains to be a high risk investment.
Oh -- I agree with you, Anon.
This table would be pages long, if I included all the R&D drop-outs since Merck began busting up Schering-Plough.
I have endeavored to only mention truly material candidates/deals.
By that, I mean ones that CEO Hassan, Peter Kim, Bob Bertolini or Raul Kohan touted as being one of the "Five Stars" in 2008/2009, "important" or a "potential blockbuster".
The trick is to guess at actual sales potential. I don't have statements from Hassan & Co., for each of these -- but it is known that at one time or another, some senior executive at legacy Schering-Plough called for sales of more than $1 billion per year -- on each of these candidates.
In each case, now, that. will. never. happen. [Ooh! that reminds me -- I should add the legacy S/P Consumer Health (@ ~ $275 million annual sales, on the waifish side, for New Merck) to the table -- as New Merck CEO Ken Frazier has said he is looking at spinning it, or selling it off. Thanks!]
Finally, and importantly, Remicade Simponi is known -- and it is probably $10 billion over the next three years alone -- and New Merck may well lose it, due to some unduly cute-lawyering by Schering-Plough's internal legal team.
So all in, this table likely represents more than $20 billion of "lost" opportunities [if we were to believe, at face value, the prior "puffing" statements of Schering-Plough executives].
Namaste -- and look for the S/P Consumer Health addition in a moment.
you are so right, but is there any investor or analyst who is looking at things this way?
EPS seems to be the single most important thing, the fact that this company seems to be eating itself from the inside and is burning money at a staggering rate is seemingly unimportant.
You may want to confirm, but I think consumer business does over $1b in sales annually.
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