Do the words “Big Pharma” ring any bells? The term refers to the pharmaceutical industry, mainly to the five largest companies in the sector, which include Merck & Co. Merck owes its title of pharmaceutical industry leader to its huge 48 billion dollar turnover.
The group is the main supplier of the well-known cancer treatment Keytruda. Keytruda is among the best-selling drugs in the world. In 2019 alone, Merck sold $11.1 billion worth of the drug.
This company is definitely worth investing in, but before you go any further, read on for some essential information about Merck & Co and its stock.
History of Merck & Co
Merck & Co is an American pharmaceutical company based in New Jersey. It is not to be confused with Merck KGaA, a German pharmaceutical company, based in Darmstadt. Both companies originate from a former chemical company founded in 1668 by F. Jacob Merck.
Georg Merck moved to New York in 1887 to represent Merck KGaA in the United States. There, he founded Merck & Co in 1891. The Americans took over the company in 1917 as compensation for the First World War. Merck & Co then became an independent entity that no longer had any connection to its parent company.
Here are some keys dates in the history of Merck & Co:
- 1965 : Acquisition of the Canadian pharmaceutical company Charles E. Frosst & Cie.
- 1994 : joint venture with the French laboratory Pasteur Mérieux.
- 2009 : merger with the Schering-Plough laboratory.
- 2014 : acquisition of Idenix, a biopharmaceutical company specializing in treatments for viral and infectious diseases.
- 2014 : acquisition of Cubist Pharmaceuticals, a company specialized in antibiotics.
- 2015 : acquisition of Harrisvaccines, a farm animal vaccine production company.
- 2018 : acquisition of Antelliq, a French company specializing in electronic animal traceability.
- 2018 : acquired Viralytics, a company specializing in oncology.
- 2019 : Acquisition of immunotherapy company Immune Design.
- 2019 : Acquisition of kidney cancer company Peloton Therapeutics.
- 2019 : acquisition of ArQule, specialized in oncology.
- 2021 : acquisition of Pandion Therapeutics, specializing in autoimmune diseases.
Company business model
Merck & Co. focuses on the research, development and production of innovative products that save and improve lives. Its revenues are derived from the products of its research into the treatment and prevention of human and animal health problems. Merck currently has three business lines:
Merck manufactures and sells vaccines and prescription pharmaceuticals to the general public, distributing them to wholesalers, pharmacies, hospitals, health care organizations and government institutions.
Merck provides healthcare to patients. Its services are provided to hospitals and healthcare organizations.
Merck develops and produces vaccines and medicines for animals. It sells them to veterinarians, distributors, breeders and farmers.
Factors that may influence Merck's share price
Merck operates in an environment where the main competitors are pharmaceutical leaders like itself. Any one of them could make a breakthrough or innovation in the medical field any day now. It’s therefore necessary to keep a close eye on the publications of pharmaceutical companies.
Given their health needs, developing and emerging countries constitute an important market. Therefore, it is necessary to analyze Merck's presence as well as that of its competitors in these countries. Investments made in this area must be monitored in particular.
Merck's developments in terms of mergers, acquisitions, divestitures and partnerships must also be followed closely, with particular attention paid to research results.