• Author / Uploaded
• Nipnaz

Citation preview

Risk Management & Finance GM0415

Merck & Company: The Drug Licensing Opportunity

Group 1 Emilia Milojkovic 19960712 Hampus Samuelsson 19960709 Ebba Hällin Olsson 19950311 Johanna Thiringer 19940721 Balsa Medojevic 19940810

Table of Content 1. How Merck has been able to achieve substantial returns to capital

3

2. The strategic importance of the project, the initial asset in which future success is expected, and why people are putting money to the project

3

3. How to evaluate the attractiveness of this opportunity

5

4. Information asymmetry problems

6

5. Risks

7

6. Factors mitigating the risks

9

7. Risk and return

10

8. How to improve the opportunity

11

9. Decision tree

12

10. If Merck should bid to license Davanrik and how much they should pay

12

11. Expected value of the licensing arrangement to Lab

13

12. Conclusions

13

References

15

Appendix

17

Appendix 1 - List of risks (Q5) Appendix 2 - Decision tree Davanrik (Q9) Appendix 3 - Decision tree Davanrik from Merck’s perspective (Q10) Appendix 4 - Tornado analysis, changes in eNPV with changes in some factors (Q10) Appendix 5 - Decision tree and eNPV of the FDA approval process for LAB (Q11)

17 18 19 20 21

1. How Merck has been able to achieve substantial returns to capital Merck seems to have the capability of getting an FDA approval for its drugs. The resources that sum up to this capability can be argued to be strategically important since similar companies are able to make it through the FDA process. LAB is an example of a company who have tried to get an approval several times but failed, even though the ability to come up with new drugs seems to be there. Merck has succeeded with both developing and commercialization of drugs, which has given Merck exclusive access to cash flows generated from sales of the drugs during the time when the drugs have been protected by patents. It seems like Merck has tried to have a, to some extent, differentiated portfolio of patents with different times to expiry. However, all of these patents will have expired by 2002 (the current year is 2000) and therefore, Merck is currently seeking for a new strategic partner in order to prevent the company from running out of patent-protected drugs. Merck seems to manage a combination of developing new drugs through internal research and through initiatives with other biotechnology companies. Collaboration is an important aspect for this kind of companies to consider in order to be able to innovate, but also to profit from the invention. If a pharmaceutical company can manage to use and take advantage of different partnership models and R&D financing models at the same time, the company is able to make more investments with less risk and less work required (David, Mehta, Norris, Singh & Tramontin, 2010). According to Deloitte (2018), hubs for R&D in the biopharma industry is also a way to achieve returns, although costs are high and timelines long. Merck has structured all their R&D activities around four hubs to facilitate external collaboration and strengthen internal networks (Merck Group, 2019). Merck may also have used currently available technology in a sufficient way. By using technology to increase automation of repetitive tasks, valuable employees and other resources can be used to work with other activities that adds more value (Deloitte, 2018). 2. The strategic importance of the project, the initial asset in which future success is expected, and why people are putting money to the project Strategic importance for Merck

Since most of Merck’s patents in their current portfolio is running out, the company is pressured to innovate and update its portfolio. By licensing Davanrik, Merck gets the opportunity to further diversify and refresh its portfolio. Merck aims to be on the leading edge of select therapeutic categories and the company is trying to achieve this through a combination of internal research and collaboration with other biotechnology companies. A

collaboration with LAB to develop Davanrik could help Merck ensure this leading edge since it would give the company access to knowledge, new/different technology, and the innovative product of Davanrik. Merck can also choose to in-license Davanrik for a defensive purpose since the drug might challenge what Merck has in its internal pipeline (O'Connell, Frei & Dev, 2014) This type of strategic alliance is a long-term decision which brings several implications. One of them is the need of taking qualitative aspects, as well as quantitative aspects, into consideration. One relevant question is what the alliance with LAB will mean for future collaborations. Potentially, the alliance can affect future collaborations positively (Ozmel, Robinson & Stuart, 2013). The long-term perspective also allows Merck to accept a higher level of uncertainty, both regarding the project overall, but also regarding uncertainty in calculations. Strategic importance for LAB

In general, LAB needs resources to make it through the FDA approval process. LAB has had several promising drugs, but all of which have failed in different phases, which, in turn, indicates a lack of capability to manage the approval process. A collaboration with Merck would not only bring capital, but also valuable knowledge and experience useful to achieve an approval. At the moment, the need for equity to finance the testing of Davanrik is particularly imminent since LAB recently has been denied an approval for another drug, which caused a price fall of the stock by 30 %. LAB could also make Davanrik reach attractive markets by access to Merck’s sales and distribution networks. A positive outcome of the joint project can be the certification it might bring. A collaboration with a large and well-known company such as Merck sends positive signals about LAB to the rest of the market. LAB might be able to take future advantage of this certification and enhance the gained bargaining power in order to establish future alliances. According to Omzel, Robinson and Stuart (2013), there is a trade-off for firms searching funding on the private equity market: a trade-off between trying to get VC-backed or search for a strategic alliance partner. Since LAB has access to the public market, VC is not an option. Increased alliance activity makes future alliances more likely. A smaller company like LAB can gain higher upfront payments if it out-licenses to a big pharma instead of SMEs (O'Connell, Frei & Dev, 2014). Strategic importance of Davanrik

If the two companies make Davanrik a joint project, they will be able enjoy yet another a drug in their pipeline with a lower level of risk to a lower cost. If Davanrik turns out to be a successful project, it can create future collaborative strategic options for Merck and LAB, and strengthen their competitive positions. A strategic alliance is a less costly alternative to M&A and tends to cause less problems connected to integration. What is the initial asset in which the future success is expected?

The initial asset of LAB is probably intangible assets such as knowledge, expertise, and know-how. The assets of Merck consist both of tangibles and intangibles. Tangibles such as cash, labs to host testing, and office-space, and intangibles such as knowledge of how to manage the FDA approval process. The initial asset of Davanrik could potentially be the drug’s ability to both prevent both depression and overweight at the same time and thereby be further profitable. Why people are putting money to this project

Merck will only enter the transaction if the company believes the NPV for its share of future sales of Davanrik (sales minus royalties paid to LAB) exceeds the investment. Big businesses like Merck have the ability to make large and risky investments in R&D, and need to do it. In the biopharma industry, the imitation-strategy or reverse engineering is only possible to apply when patents have expired, and that is not when pharmaceutical firms enjoy the greatest cash flows. It can be argued that the project Davanrik lies within applied research, which seeks to gain knowledge to something specific in order to fulfill a need, which should generate money back from the market - a reason for both Merck and LAB to put money to to this project. 3. How to evaluate the attractiveness of this opportunity In order to fully assess the attractiveness of this opportunity, we would need to undertake a variety of actions. First, we would need to identify what type of risks and information asymmetries may exist between the two partners. The risks will be grouped according to their nature (technical, business and competitive), along with the party incurring them. Once they are listed, we will aim to identify potential ways that some of them can be reduced or eliminated, making the investment safer and more attractive in the progress.

Next, we will identify the potential profits and losses each company could incur given the potential scenarios within the approval process. This is done by drawing up a decision tree, and by showing the potential cash flows and the expected net present value (eNPV). Finally, we will analyse what type of deal Merck and Lab should reach, how much Merck should pay for the acquisition of Davanrik, and how much Lab would receive in royalties should the approval be a success. 4. Information asymmetry problems Within these type of business deals, there is an innate problem of information asymmetry that needs to be addressed. Such issues are very common within join projects, and, should they not be dealt with, could potentially make or break the project. An example of failures caused by such information asymmetries can be found regarding construction projects. In order to come out with more personal gain, the contractors utilize a variety of measures to reduce costs of their construction project (such as use of inferior materials, reduction in design standards, and necessary investment in construction), leading to substandard building products. A fishing port project in the Hainan province in China fell victim to such an hazard. Its contractors did not abide by the standards and design drawings during its construction that were laid by their employer and the government, causing serious quality problems which resulted in a severe loss of state property and funds as the fishing port turned into a “discard port” (Xiang, Huo, & Shen 2015). Since the Davanrik project is developed by LAB’s researchers, yet the Merck would be the one paying for the project and evaluating its success, there are clear differences in the amount of insight in the project within the two companies, as well as a potential misalignment of interests that could exacerbate said problem. Because LAB receives its income based on the successful passage of FDA stages, the company might not want to share any potential issues or difficulties with Merck, as this could risk having its funding taken away. As such, Merck might not realize the true state of Davanrik until it is too late. Furthermore, LAB might not want to share too much of its knowledge and practices to Merck, as sharing the insight into its practices might make the company’s competitive advantage fade away. Merck, on the other hand, might also have reasons to conceal information from its partner. Namely, Merck might want to conduct its valuation and approval process on Davanrik in secret or with as little involvement of LAB as possible. The reason for such behaviour can be justified by the fear of giving away the competitive advantages that may be embedded in said processes.

5. Risks For a list of the risks that Merck and LAB are taking, respectively, as well as those shared by both companies, please see Appendix 1. Whether Merck or LAB is taking the higher risk by entering the licensing agreement is highly dependent on the basis on which you rank their different risks. In order to be able to appropriately determine this basis, there first needs to be a clear definition of what we actually mean by risk (Fischhoff & Kadvany, 2011). By definition, risk threatens things we value. In this case, this thing would be money, considering the incentive for both companies to enter the agreement is ultimately to make a profit. Thus, the definition of risk here is the possibility of an outcome resulting in the loss of money. In turn, this means that the basis on which we rank the risks identified above is the amount of money potentially being lost. By entering the agreement, Merck will be responsible for financing the testing, manufacturing and marketing of the drug. In contrast, from the moment the contract is signed, LAB will not have to take any more money out of its own pocket. Clearly, this means Merck is running the risk of losing the largest amount of money if the project in any way fails. The amount of money lost will depend on how far into the testing and launching process Merck has come before failure strikes. If, for example, the drug fails in the third phase of the approval process, money will already have been spent on the initial two phases. During this time, Merck will not have made any profit, while LAB will have made a total of $7.5 million in licensing fees. Thus, from this perspective, Merck takes the higher risk. However, what is important not to forget is that by entering the agreement, LAB faces considerable opportunity costs. If the drug turns out to be successful, LAB could have made a significantly higher profit by issuing additional equity and taking care of the entire process of testing the drug and getting it out on the market itself. However, opportunity costs do not imply losing money per se, and Merck is clearly facing opportunity costs by entering the agreement as well. Sticking to our definition of risk and the basis on which we rank risks thus means Merck still should be considered the company taking the higher risk. You can also choose to look at risk on a more fundamental level. At the end of the day, what matters the most for every company is not losing $1 million here or gaining $1 million there, but ensuring the company’s survival. Thus, it can also be relevant to rank risks based on the degree to which they threaten the company’s existence. Because LAB is in a poor position already from the outset, the company is in desperate need of Davanrik being successful. If Davanrik fails, LAB will have spent money

on developing a drug that does not generate any revenues, and may not be able to get back from yet another major setback. In contrast, based on the figures presented in Exhibit 1 and 2, Merck is clearly not in the same delicate financial situation. Failure will result in the company losing a lot of money, but not to the extent that it will threaten its survival. Thus, from this perspective, it can be argued that LAB is taking the higher risk. However, it should be noted that the risk of going bankrupt is a risk that LAB faces regardless of whether the company enters the agreement or not. In other words, it is not a risk specifically associated with allowing Merck to license Davanrik. This implies that almost regardless of the conditions under which the agreement is entered, LAB will take the higher risk, at least when ranking the risks based on their potential to force the company out of business. Clearly, ranking the risks on this basis can be misleading, which is why we would recommend going back to our initial ranking, thus making Merck the company that is ultimately taking the higher risk. As an example, Embraer is a Brazilian manufacturer of aircrafts which focuses heavily on developing risk-sharing partnerships with its core suppliers (Figueiredo, Silveira & Sbragia, 2008). After Embraer was privatized, the company experienced difficulties in receiving government funding, and felt the need to start developing close partnerships with its suppliers to share the risks associated with product development. In these risk-sharing partnerships, the suppliers invest in Embraers projects and thus take on the projects’ related financial risks. In return, they usually get rights to future sales income. Companies that Embraer has collaborated with in this way include General Electric, Honeywell, Gamesa, and Hamilton Sundstrand. In some of these risk-sharing partnerships, Embraer’s partners are actively involved in the product development process, and together with Embraer they add value by exchanging knowledge and technology (Figueiredo et al., 2008). Although sharing resources has its benefits, it also comes with risks. For example, through these partnerships, Embraer’s partners may acquire know-how that may help them in the future when competing with Embraer in areas where this know-how is applicable. Thus, the risk-sharing partnerships between Embraer and its core suppliers entail different risks for the different parties. 6. Factors mitigating the risks Mitigating the risks that are associated with Merck making estimations, such as the estimated costs, revenues, length of the approval process, and probability that Davanrik will be approved, is the fact that the company has experienced many successful launches of other

drugs in the past. Thus, it is fair to assume that Merck’s familiarity with going through this process increases its ability to produce relatively accurate estimations. A factor mitigating the risks specifically associated with information asymmetry is the companies’ mutual interest in the project being successful. Keeping information from each other that might cause the project to fail does not seem to be of interest for either company. However, because Merck is in a considerably better financial position than LAB, it could be so that the company might want to risk the success of the project by trying to tip the scale in its favor. This could also be of interest to LAB, albeit much riskier considering the company’s vulnerable situation. This problem of not acting in line with what would result in the best collective outcome is called the prisoner’s dilemma (Metrick & Yasuda, 2010). In addition to the factors that inherently mitigate some of the risks identified in Appendix 1, there are things the two companies can actively do themselves in order to reduce the magnitude of both their individual and shared risks. Because technical risks are mainly associated with the drug not making it through the approval process or actually treating the conditions it is supposed to, one way to mitigate these is for Merck to carefully examine the way in which LAB has developed the drug. The problems causing all of LAB’s previous attempts to fail can probably be attributed to the development process, at least to some extent. Thus, confirming that the drug has been developed in a legitimate way is a good idea before putting any money into testing it on a larger scale. The category of business risks is relatively wide, although mainly concerned with the behavior of the market and the consumers. Some of these can be mitigated by interacting with the targeted customer segment to learn not only what potential customers want from the drug, but also in what way it can offer a solution to the issues they experience on a more fundamental level. In this way, Merck can make sure Davanrik will be valued by the customers. Another way is to incorporate stipulations in the contract which require both parties to share all relevant information, and which prohibit them from taking advantage of any kind of information asymmetry in a way that might hurt the other party. This will make it easier for Merck and LAB to trust each other, facilitating a close collaboration aimed at achieving the best possible collective outcome. Finally, competitive risks are connected to how competitors might react to a new drug being launched which could threaten the sales of their own drugs. Many of these risks are difficult to mitigate because there is no easy way to stop competitors from lowering the prices or increasing the sales efforts of their own products. However, by closely monitoring

them and looking into how they previously have reacted when other companies have introduced new drugs on the market, Merck and LAB can at least get an idea of which response to expect if Davanrik is approved and launched. Additionally, regarding the risk of competitors filing lawsuits, claiming infringement of their intellectual property, Merck and LAB would benefit from ensuring that Davanrik does not intrude on any of their competitors’ IPRs, and also from protecting themselves from patent infringements by their competitors. 7. Risk and return Generally speaking, it is fair to assume that taking a higher risk would imply the possibility of gaining a higher return. If this was not the case, then there would not be any reason for someone to take a higher risk. However, because some risks are diversifiable and thus possible to lower without affecting the expected return, a higher risk might not always equal a higher return. Risks that are diversifiable are called idiosyncratic, and have no correlation with the overall market (Metrick & Yasuda, 2010). Instead, they are strictly related to the specific project. In contrast, systematic risks are those associated to the overall economy and are thus not possible to diversify away. This is because every investment or project undertaken by the company will be affected by this kind of risk. According to the concept of CAPM, the higher the systematic risk (or the higher the β in the CAPM formula), the higher the expected return. Thus, only systematic risks are able to affect the expected return. Technical risks are uncorrelated across different projects, and can thus be mitigated through diversification. This means they fall into the category of idiosyncratic risks. By investing in the development and testing of additional drugs, Merck can create a portfolio of projects that is basically risk free. Because of this, the technical risks of Davanrik are expected to generate the same return as the risk-free interest rate, and are thus not associated with higher expected returns. Business risks can in some aspects be considered systematic, while in others seen as idiosyncratic. On the one hand, a downturn in the overall economy would most likely cause the sales of drugs in general to drop, implying that investing in a portfolio of projects would not help Merck avoid this risk. On the other hand, some factors that might cause the demand of Davanrik to drop are specific to Merck, such as the pricing and marketing strategy. These factors do not directly affect any of Merck’s other projects, thus implying that the risks they represent can be diversified away. Therefore, depending on how you look at it, a higher business risk is in some cases associated with a higher expected return, while in others not.

Finally, the competitive risks, which are related to how competitors might react when Merck introduces Davanrik on the market, are clearly specific to this particular drug and thus idiosyncratic. As such, these can be easily diversified and will not be associated with a higher expected return. 8. How to improve the opportunity To begin with, the previously mentioned risks and information asymmetries need to be addressed. Technical sides of the risks can be alleviated by ensuring that the expertise from both of the companies are fully utilized. As such, it is necessary for both companies to share all of the available information and knowledge they possess. In order to accomplish this and circumvent the issues of information asymmetry, an atmosphere of trust must be fostered. One of the ways accomplish this is by introducing a certain form of a monitoring mechanism between the two companies, either through company representatives or an autonomous third party. Doing so would alleviate the burden of companies hiding the knowledge in fear that the other partner would do the same. Business sides of the risks can be dealt with through conducting market research through surveys and interviews in order to better understand the customer needs and the potential size and profitability of the market. The key to dealing with the commercial part of the risks lies in the strength of the brand of the companies selling the drug, which is most likely Merck in this case. Therefore, by utilizing strategies such as campaigning, Merck should attempt to raise and maintain its brand value in order to minimize the consequences from this type of risk. Merck can also reduce its own risks via diversification of its portfolio by investing into other drug projects, whether from LAB specifically (which could increase the amount of trust between the companies by having them rely on each other more) or from other pharmaceutical companies. In this way, they can hedge themselves against a potential failure of Davanrik. Either way, it is rather important for both companies to understand that they both greatly benefit from a Davanrik approval and thus should strive to implement these measures in order to increase the probability of it happening. 9. Decision tree Please see the decision tree in Appendix 2. The decision tree shows all three phases of testing as well as the FDA approval process.

Assumptions

1. We assume that if Merck decides to license, then they will hold on to the project during all approved phases. 2. We assume that if the drug is successful through all phases, FDA will approve the drug. 3. We assume that the payment for each phase is made in the start of the phase, no matter if the phase is successful or not. 10. If Merck should bid to license Davanrik and how much they should pay Before taking any decision regarding risky investments, the risks associated with the project need to have been gone through thoroughly. When calculating the financial risk, Merck’s experts in the field have done the research to find expected future cash flows and probabilities of success, and these numbers have been used as a basis for calculating the expected net present value (eNPV) of the project. On Merck’s behalf, the eNPV, excluding royalties, is $13.98 million, and if including royalty payments, it is $7.10 million. We make sure to exclude royalties in our calculation in this question since we are evaluating the total value of the project. How the two companies decides to split the incomes are a later problem and not discussed in this question. Merck should make sure to make a bid not over $13.98 million. Please see Appendix 3 for calculations. Yet, it is not enough to perform only EPV-calculations since these include different uncertainties with assumptions. A sensitivity analysis (see Appendix 4) can help to understand how a change in the assumptions can affect the outcome (Investopedia, 2018). The factors that have been examined in the sensitivity analysis are: discount rate, sales (PV of project), launch costs, phase costs, and royalty rates. The parameters that Merck should be aware of are discount rate, phase cost and a decrease in sales since these are the most sensitive to changes and may lead to a negative eNPV. For example, when testing a higher discount rate (15 %), it brings an eNPV of $-19.6 million, which would indicate a bad investment. On the other hand, a decrease in discount rate would give a eNPV of $53.2 million, showing that the discount rate is the most sensitive parameter. 11. Expected value of the licensing arrangement to Lab For LAB, the expected value of the licensing agreement means the value of both royalties and the licensing fees of each phase. Furthermore, we assume that the payment to LAB in each phase is not dependent on outcome, meaning the payments are made upfront each phase and will be paid even if the phase is unsuccessful.

If adding the different payments from the phases that sums up to $6.09 million, and then add the expected royalties of $6.88 million, we have a total of $12,97 in expected value for the arrangement to LAB (see Appendix 5). 12. Conclusions Merck has a strong balance sheet with enough retained earnings to invest in Davanrik which is a positive NPV project. Merck should not bid over the amount of $13.98 million, and should make sure to take different risks into consideration. Even if the project seems positive according to the NPV analysis, it is still sensitive to changes due to LAB’s somewhat questionable track record.

References David, E., Mehta, A., Norris T., Singh N., & Tramontin T. (2010). New frontiers in pharma R&D investment (McKinsey & Company, Pharmaceuticals & Medical Products). Retrieved 2019-02-23 from https://www.mckinsey.com/industries/pharmaceuticals-and-medicalproducts/our-insights/new-frontiers-in-pharma-r-and-38d-investment Deloitte UK. (2018). Embracing the future of work to unlock R&D productivity Measuring the return from pharmaceutical innovation 2018. Retrieved 2019-02-23 from https://www2.deloitte.com/uk/en/pages/life-sciences-and-healthcare/articles/measuring -return-from-pharmaceutical-innovation.html Figueiredo, P., Silveira, G., & Sbragia, R. (2008). Risk sharing partnerships with suppliers: The case of Embraer. Journal of Technology Management and Innovation, 3(1), 27-37. Fischhoff, B., & Kadvany, J. (2011). Risk : A very short introduction. New York: Oxford University Press. Harrington, S.E. (2012). Cost of Capital for Pharmaceutical, Biotechnology, and Medical Device Firms. In Danzon, P.M. & Nicholson, S. (Eds.), The Oxford Handbook of the Economics of the Biopharmaceutical Industry, (pp. 75-99). New York: Oxford University Press. Metrick, A. & Yasuda, A. (2010). Venture Capital and the Finance of Innovation. New Jersey: John Wiley & Sons. Merck Group. (2019). R&D Hubs. Retrieved 2019-02-26 from https://www.merckgroup.com/ en/research/our-approach-to-research-and-development/healthcare/r-and-d-hubs.html O'Connell, K., Frei, P., & Dev, K. (2014). The premium of a big pharma license deal. Nature Biotechnology, 32(7), 617-9. Smith, R. (2015). The Private Equity Firm That Quietly Profits on Top-Selling Drugs. Ny Times. Retrieved 2019-03-06 from: https://www.nytimes.com/2017/07/08/business/dealbook/ drug-prices-private-equity.html Harrington, S.E. (2012). Cost of Capital for Pharmaceutical, Biotechnology, and Medical Device Firms. In Danzon, P.M. & Nicholson, S. (Eds.), The Oxford Handbook of the Economics of the Biopharmaceutical Industry, (pp. 75-99). New York: Oxford University Press. Xiang, Huo, & Shen. (2015). Research on the phenomenon of asymmetric information in construction projects — The case of China. International Journal of Project Management,

33(3), 589-598.

Appendix Appendix 1 - List of risks (Q5)

Technical

Merck

- Failure in the latter part of the approval process, meaning money has been spent in the initial phases in vain.

LAB

Shared

- Failure in any of the phases of the approval process. - The drug does not work despite being approved. - New side effects become evident after approval. - Longer approval process than expected, resulting in less time to sell the drug before the patent expires.

Business

Competitive

- Investing in an unprofitable business. - Damaged reputation in the case of failure, leading to reduced sales of its other drugs and fewer potential partners wanting to establish partnerships. - Estimations of costs are wrong. - Tying up resources which could have been used for other, more profitable purposes.

- Information asymmetry.

- Losing control. - Disclosure of information about the drug and its development process. - Losing the opportunity to reap the full benefits of a drug that prove to be mighty successful. - Going bankrupt.

- Missing out an opportunity to gain a competitive advantage. - In the case of success, Merck’s competitive position will be strengthened disproportionately to LAB’s because Merck is the company selling the drug. - Information asymmetry.

- Estimations of market size are wrong. - Intended customers do not appreciate the drug.

- Competitors lower the prices of their competing drugs. - Competitors increase sales efforts of their competing drugs. - Competitors file lawsuits, claiming infringement of their intellectual property. - A competitor introduces a competing drug in the meantime Davanrik goes through the approval process.

Appendix 2 - Decision tree Davanrik (Q9)

Appendix 3 - Decision tree Davanrik from Merck’s perspective (Q10) Without and with royalties included, note that all cash flows are in millions of dollars.

Appendix 4 - Tornado analysis, changes in eNPV with changes in some factors (Q10)

Appendix 5 - Decision tree and eNPV of the FDA approval process for LAB (Q11)

eNPV of royalties paid to LAB by Merck.

eNPV with changes in mentioned factors. The plus-side shows what eNPV will be with an increase in the factor, while the minus-side shows what effect a decrease in mentioned factor will have on the eNPV.