The Company and Competitive Landscape

Business Description

Merck & Co, commonly known as Merck, is a leading global pharmaceutical company headquartered in Kenilworth, New Jersey, USA. Merck is a well-established player in the healthcare industry with a rich history dating back to its founding in 1891. The company is dedicated to the research, development, manufacturing, and marketing of prescription medications, biologic therapies, vaccines, and products for animal health. Their prescription offerings span a wide range of therapeutic areas, including cardiovascular health, cancer treatment, immune disorders, infectious diseases, respiratory health, and diabetes management. Additionally, Merck provides a variety of animal health products, including vaccines, poultry care items, livestock solutions, and aquaculture products.

Source: Factset

Target Market

Merck & Co distribute their products to drug wholesalers, retailers, hospitals, government agencies, and managed healthcare providers, while their animal health products are made available to veterinarians, distributors, and animal producers. Operating across the Americas, Europe, the Middle East, Africa, Asia Pacific, and Latin America, Merck is recognized as MSD outside the United States and Canada.

Key Competitors

Merck & Co., Inc. faces competition from two distinct groups of competitors. Firstly, at a global scale, Merck competes with other major pharmaceutical and healthcare companies operating across various regions and segments of the healthcare and life sciences industries. These companies serve as significant rivals to Merck when assessing its market position, financial performance, and competitive standing within the healthcare sector. These multinational pharmaceutical and healthcare corporations serve as valuable benchmarks for evaluating Merck's performance metrics.

Secondly, within specific local markets, Merck may encounter competition from regional pharmaceutical companies and healthcare providers in regions where it operates, such as Pennsylvania, New Jersey, and other areas with a significant healthcare industry presence. These local competitors may directly compete with Merck's products and services, especially in pharmaceutical sales and healthcare solutions, potentially influencing Merck's market share and competitive strategy on a more localized scale.

Source: Factset

Thermo Fisher Scientific

TMO primarily specializes in providing scientific research tools, laboratory equipment, reagents, and services to support scientific research in various industries. While both companies operate in healthcare and life sciences, their core focuses are different. MRK is primarily a pharmaceutical company, whereas TMO provides research tools and services.

Novartis

Novartis is a global pharmaceutical company with a comprehensive portfolio that spans pharmaceuticals, generics, eye care, and biosimilars. Their research focus encompasses oncology, cardiology, ophthalmology, and neuroscience, posing significant competition to Merck in these therapeutic domains. (NVS) is a pharmaceutical company focused on the research, development, manufacturing, and marketing of prescription medications, innovative therapies, and vaccines. Both MRK and NVS are primarily pharmaceutical companies with a shared commitment to drug discovery and healthcare solutions. Both MRK and NVS have a significant international presence, serving global markets.

Abbott Laboratories

ABT is a diversified healthcare company with multiple segments. Abbott Laboratories is involved in pharmaceutical research, development, and marketing, with a focus on prescription medications across various therapeutic areas, including cardiovascular health, infectious diseases, and neuroscience. Their pharmaceuticals aim to address a wide range of medical conditions.

Johnson & Johnson

As a diversified healthcare giant, Johnson & Johnson competes with Merck not only in pharmaceuticals but also in medical devices and consumer healthcare products. Their pharmaceutical arm, Janssen Pharmaceuticals, is involved in innovative drug development and is particularly active in areas like immunology, neuroscience, and infectious diseases.

Suppliers

Merck has thousands of direct material suppliers and an extensive internal and external network of manufacturing sites around the world. Merck is several tiers removed from smelters/refiners and has no direct business relationship with them due to the length and complexity of its supply chain. As a result, Merck must rely on its direct material suppliers to provide information on their upstream supplier sourcing, including country of origin determinations for Conflict Minerals that may be present in the materials or products provided by those direct material suppliers to Merck. (NGM) Modifies Collaboration with Merck to Prioritize Novel Medicines for Retinal and Cardiovascular and Metabolic (CVM) Diseases. Another is AstraZeneca and Merck establishing a strategic oncology collaboration. The collaboration seeks to harness the full potential of PARP and MEK inhibitors when used in conjunction with PD-L1/PD-1 medications, capitalizing on the increasing scientific research that indicates these combinations present fresh opportunities for treating various types of tumors.

Source: Factset

Local Competitors

Bristol-Myers Squibb

Based in New York City, Bristol-Myers Squibb is a global biopharmaceutical company that may compete with Merck in the local market for pharmaceutical sales and research collaborations

Janssen Pharmaceuticals

While Johnson & Johnson is a global competitor, its subsidiary, Janssen Pharmaceuticals, has a presence in local markets, including Pennsylvania and New Jersey, where it may compete with Merck in the pharmaceutical sector.

Customers

Merck & Co., Inc. serves a diverse array of customers across its various business segments. Within its pharmaceutical and healthcare divisions, the company supplies a wide range of products and services to hospitals, healthcare providers, pharmacies, and clinics, catering to both individual patients and healthcare institutions. Additionally, Merck collaborates with government agencies and public health organizations to provide vaccines and medications for various public health programs.

Furthermore, the company's research and development efforts often involve partnerships with academic institutions, biotechnology companies, and research organizations, showcasing its commitment to advancing scientific knowledge and innovation in the healthcare industry. However, at its core, Merck's primary customers are the millions of patients worldwide who benefit from its pharmaceuticals, vaccines, and healthcare solutions, reinforcing its mission to improve global health outcomes.

Key Metrics

Merck (MRK) reported revenue of $15.04 billion for the quarter ended June 2023, a 3% increase over the same period last year. EPS was -$2.06, compared to $1.87 in the previous quarter. The reported revenue is +4.50% higher than the Zacks Consensus Estimate of $14.39 billion. The EPS was +5.07%, with the consensus EPS estimate being -$2.17.

Source: Statista

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