Risk Analysis for Merck and Company: Product KL-798

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Case

Reference no. UVA-QA-0600

Subject category: Case Method and Specialist Management Disciplines

Authors: Samuel E Bodily (Darden School of Business, University of Virginia); John Faulk (Darden School of Business, University of Virginia)

Published by: Darden Business Publishing

Originally published in: 2003

Version: 31 May 2011

Revision date: 2-Nov-2011

Length: 8 pages

Data source: Published sources

Topics: Operations; Decision analysis; Monte Carlo simulation

Share a link: https://casecent.re/p/1690

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Abstract

This case builds on the case 'Merck & Company: Product KL-798' by providing market uncertainties for the drug (drug quality, the presence of a competitor, market growth, and the time to the drug's release). Student and faculty spreadsheets are provided for the calculation of net present values for the scenarios. There is an additional challenge of how to treat the several downstream decisions (using OptQuest, for example) and how to value the license opportunity. A teaching note is also available to registered faculty members.

Industry:

Pharmaceuticals, biotechnology, health care