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Merck Takeover

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For what? Our shitty pipeline? You have to have value to be a takeover target - take it from a legacy SP person.

Although that would make me freaking HOWL! I would love to see Pfizer dismantle the arrogant leadership at this company.
 




These mergers that develop no net value are smoke and mirrors and if you are truly inside Pfizer or Merck, especially if you arrived there via former Wyeth or S-P, you would realize that poignantly. Correcting the institutional stupidity would have been more beneficial and profitable than merger. Likely it was meekly attempted prior to the mergers but failed because it would point the finger of blame directly at where it belongs. Do you see any evidence of change towards a more intelligent organization after the merger? Exactly. Wall Street realizes this and the mega-merger get-out-of-jail-free card can be played exactly once. It buys some time but if the problems are not corrected within 5 years, the failure, although delayed, becomes merely a bigger failure. No mega-mergers on top of mega-mergers. A mega-buy-out by Indian or Chinese mega-money holding the intent to move the name Merck to China or India is much more likely. Even that is still improbable until the market cap gets below USD 60-80 billion present value. The mega-rich in India and China might possibly like to flaunt their wealth and acquiring an iconic company that some under-informed pundits feel still stands for global quality might be just the thing.
 




Anonymous said:
These mergers that develop no net value are smoke and mirrors and if you are truly inside Pfizer or Merck, especially if you arrived there via former Wyeth or S-P, you would realize that poignantly. Correcting the institutional stupidity would have been more beneficial and profitable than merger. Likely it was meekly attempted prior to the mergers but failed because it would point the finger of blame directly at where it belongs. Do you see any evidence of change towards a more intelligent organization after the merger? Exactly. Wall Street realizes this and the mega-merger get-out-of-jail-free card can be played exactly once. It buys some time but if the problems are not corrected within 5 years, the failure, although delayed, becomes merely a bigger failure. No mega-mergers on top of mega-mergers. A mega-buy-out by Indian or Chinese mega-money holding the intent to move the name Merck to China or India is much more likely. Even that is still improbable until the market cap gets below USD 60-80 billion present value. The mega-rich in India and China might possibly like to flaunt their wealth and acquiring an iconic company that some under-informed pundits feel still stands for global quality might be just the thing.
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You are making perfect sense although two points are to be presented here:
On the subject of mega-merger following mega-merger, you have the European example of Sanofi, created by the mega-merger of Sanofi-Synthelabo and Aventis where Aventis was created few years earlier from the merger of Hoechst-Marion-Roussel and Rhone-Poulenc-Rorer, each of those was the result of older smaller mergers. Then you have Glaxo: first Glaxo-Smithkline merger before which you had the Smithkline-Beecham merger and the Glaxo-Wellcome merger. Europeans... Then you have the story of Pfizer: first buying out Parke-Davis then Wyeth.

Second point regarding a "new world" company acquiring Merck for whatever prestige-vestige the name might still hold in Emergestan: I've seen enough to strongly suspect you are bang on the buck although the Indians and the Chinese are not dumb enough to waste cash on some old western name (well, one could debate that especially on the Chinese side: I mean, they bought Hummer, right?) - my prediction is Teva.
 




Teva is way too smart to fall for buying one of their victims. Only in Sci-Fi do parasites want to evolve to be their victims. They are happy just to have lunch delivered by the majors.. In most of their western operations Teva is already very lean and would need to sell, not trim, a lot of capital from any major they would acquire - at a loss. They already control a big % of FDA-monitored manufacturing in the US so they do not need to prove their excellence to anyone. Their bit of arrogance might come from trying to go too deep into R&D. China is buying Volvo, India is buying Jaguar - name brands that no desperate soul in the west would touch when offered. China bought IBM's PC business at a time just before that industry went flat (permanently probably). China is the best bet but they would only buy to control 100% and to be free to manufacture wherever they want and export to any country they want.
 












Positive because Merck pays a dividend so it still is a good hedge against volatility in the market. For how long? But if the pipeline suffers one or two more serious disappointments, perhaps for not much longer. Today the cash flow supporting that dividend is enhanced by reduction in force. Truth is, nobody is buying Merck as a growth stock. Lots of people were wild about Eastman Kokak in the 70's when it was bigger (and bigger for far longer) in relative terms than Merck was at its peak. It had about 40+ years as a Fortune top 50 (many of them in the teens and 20's) and even was #20 as recently as 1994. (Anyone that has been at Merck knows that a lot can happen, for good and for bad, in 20 years.) Well it is sitting around #350 today. Merck has steadily dropped from its heady peak in 1999/2000 and even with eating S-P (a middling #135) it is languishing in the 80's. Nobody will take over Merck at this point until nature takes its course. Just like Eastman Kodak couldn't get anyone to take over when the bottom fell out in the 90's. But perhaps Merck's languishing is more a reflection of the unrealistic heights it reached in the late 90's and it is just getting back to its long-term average. A little bit long for that equilibrium to occur but perhaps. If so, all those anti-Keynesian, pro Hayek (Ryan, Christie, Walker) fans that talk a bunch of crap and who just would like to see market capitalism take its course, then Merck is a good stock for you to experience a return to market equilibrium. Celebrating dampening some over-exuberance if you will. For its employees as well as its share-holders, it is a trap in more ways than one. Employees are glum because they see nothing in their day-to-day experience that suggests that this is a company going anywhere it hasn't already been for the last 10 years. Wall Street gets its dividends as hush money. And Merck is trying to convince their employees that their "dividend" is to be happy that they haven't been cut - yet. Remember that your continued employment is a function of just how well that dividend-supporting cash flow is doing.
 




Anonymous said:
Yet, I'm always amazed how often there are positive "buy" recommendations from stock market analysts with regards to Merck. Seems like only the employees think Merck is a P.O.S.
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And not all employees, only some, maybe most. Agree that the SP merger was ill-conceived and desperate. But, let's wait and see on anacetrapib and other key components of the pipeline. And look for Merck to own a big chunk of the eventual biosimilars market. Merck may yet rise again.
 




Anecetrapib will be it, I'm afraid. And should that fail, it's good night Irene. Merck is not a biotech company and they bring nothing particularly powerful to this biosimilars business. From what I can gather, the pace of activity in Merck Bioventures is snail-like. The platform that Merck was hoping to use has turned out to be less than useful. If they go to oursource for this technology, all they will do is provide an opportunity for an overseas business to establish itself (along with the scores of others that are after the same brass ring). Ironically, S-P had more biotech presence than Merck did going into the merger and even that was not very deep. The same dolts that have extinguished Merck's R&D and blundered in the merger are running the show and providing direction to new initiatives. Demoralized staff, moronic leaders. They have, for the present, a pile of cash. Fools and their money ...
 








Anonymous said:
Anecetrapib will be it, I'm afraid. And should that fail, it's good night Irene. Merck is not a biotech company and they bring nothing particularly powerful to this biosimilars business. From what I can gather, the pace of activity in Merck Bioventures is snail-like. The platform that Merck was hoping to use has turned out to be less than useful. If they go to oursource for this technology, all they will do is provide an opportunity for an overseas business to establish itself (along with the scores of others that are after the same brass ring). Ironically, S-P had more biotech presence than Merck did going into the merger and even that was not very deep. The same dolts that have extinguished Merck's R&D and blundered in the merger are running the show and providing direction to new initiatives. Demoralized staff, moronic leaders. They have, for the present, a pile of cash. Fools and their money ...
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Yes, Merck most likely lives / dies on the success / failure of Anecetrapib. Not a bet I'd choose to make.
 




Anonymous said:
PREDICTION!!!!!! ----Folks....these impending layoffs that are going to take place up to 2015, will make Merck ripe for takeover for either J&J or Pfizer.
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There is no meat on the bone for anyone to take us over right now. If we get something good in the pipeline then maybe. How bad are they going to hit R&D? If they cut too deep that will become a major issue. The only way we will survive is to populate the pipeline with some big money drugs. It will start and end with the pipeline. If we go generic, all of NJ and other high cost of living states will be sacrificed.
 




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