10%

85% 15%
Success Failure
Success
Decision Tree For Merck
Depression Only
Phase III
60% 40%
Success Failure
15% 5%
75% 25%
Failure
70% 15% 5%
Decision Tree For Merck
Phase I
Phase II
Weight Loss Both
Phase III
Success Both Depression Only Weight Loss Only
Investment
30,000,000
70%
Failure 40,000,000
200,000,000
150,000,000
10%
500,000,000
Decision Tree For Merck
Phase III
Weight Loss Only Failure
Probability
Phase I Success 60%
Failure 40%
Phase II Depression Only 10%
Weight Loss Only 15%
Both 5%
Failure 70%
Phase III Success Depression only 15%
Weight Loss Only 5%
Both 70%
Failure 10%
Depression Only Success 85%
Failure 15%
Weight Loss Only Success 75%
Failure 25%
Cash Flow Launch Costs Net
73,300,000 - 43,980,000
-
607,500,000 - 60,750,000
33,750,000 - 5,062,500
949,750,000 - 47,487,500
- - -
1,200,000,000 250,000,000 142,500,000
345,000,000 100,000,000 12,250,000
2,250,000,000 400,000,000 1,295,000,000
- - -
1,200,000,000 250,000,000 807,500,000
- - -
345,000,000 100,000,000 183,750,000
- - -
Investment Expected Value
949,750,000
607,500,000
33,750,000
73,300,000
13,980,000
30,000,000
40,000,000
500,000,000
200,000,000
150,000,000