Contents:

Chapter 1. Executive summary 4 Key findings 4 Historical and forecast ethical sales performance 5 Therapeutic strategy 6 Launch and expiry outlook 9 Externalization, geographic and molecule type strategies 11 Externalization strategy 11 Geographic strategy 12 Molecule type strategy 13 SWOT analysis 14 Strengths 15 Weaknesses 16 Opportunities 17 Threats 18 Chapter 2. Corporate history 29 Key findings 29 Background 30 Key corporate developments 30 Merck & Co. global restructuring plan: December 2005 highlights 31 M&A history 32 Divestments 32 Acquisitions 32 GlycoFi 33 Abmaxis 33 Current management team 34 Chapter 3. Historical performance 35 Key findings 35 Introduction 36 Revenue and growth rate analysis, 2002-05 36 Revenue and growth rate vs. peer set 37 Product analysis, 2002-05 39 Growth drivers 39 Singulair 39 Fosamax 40 Other infectious diseases 40 Growth resistors 40 Vioxx 40 Other cardiovascular 41 Zocor 41 Operating revenue and cost analysis, 2002-05 42 Operating revenue/cost analysis 44 Chapter 4. Forecast performance 46 Key findings 46 Introduction 47 Revenue and growth rate, 2005-11 47 Product analysis, 2005-11 49 Growth drivers 54 Vytorin 54 Singulair 55 Gardasil 55 Januvia 56 Zetia 56 Growth resistors 56 Zocor 57 Fosamax 58 Cozaar 58 Proscar 58 Therapy area analysis, 2005-11 60 Respiratory 63 Infectious disease 64 Oncology 64 Diabetes & endocrinology 64 Cardiovascular 65 Womens health 65 Therapy area focus 66 Launches and expiries analysis, 2005-11 71 Launch portfolio 71 Core portfolio 73 Expiry portfolio 75 Launch/core/expiry configuration 77 Externalization analysis, 2005-11 81 Geographic analysis, 2005-11 87 Molecule type analysis, 2005-11 91 Chapter 5. Key products and competitors 97 Key findings 97 Overview 98 Cardiovascular 99 Zetia/Vytorin 99 Overview 99 Sales forecast 99 Newsflow 101 Profile 101 Competitive landscape 102 Cozaar/Hyzaar 105 Overview 105 Sales forecast 106 Newsflow 107 Profile 107 Competitive landscape 107 Zocor 110 Overview 110 Sales forecast 111 Newsflow 111 Profile 111 Competitive landscape 112 Respiratory 115 Singulair 115 Overview 115 Sales forecast 116 Newsflow 116 Profile 116 Competitive landscape 117 Gardasil 119 Overview 119 Sales forecast 120 Newsflow 121 Profile 121 Competitive landscape 122 Januvia 124 Overview 124 Sales forecast 125 Newsflow 125 Profile 126 Competitive landscape 126 Fosamax 128 Overview 128 Sales forecast 129 Newsflow 130 Profile 130 Competitive landscape 131 R&D pipeline 133 Chapter 6. Appendix 135 IMS vs. company-reported data reconciliation 135 Abbreviations List of Tables Table 1: Merck & Co. Corporate Executive Committee 34 Table 2: Peer set overview 37 Table 3: Operating revenue/cost analysis ($m), 2002-05 42 Table 4: Operating cost ratio analysis (% of total revenues), 2002-05 44 Table 5: Product portfolio overview, sales ($m), 2005-11 49 Table 6: Therapy area overview, sales ($m), 2005-11 60 Table 7: Launch portfolio overview, sales ($m), 2005-11 71 Table 8: Core portfolio overview, sales ($m), 2005-11 73 Table 9: Expiry portfolio overview, sales ($m), 2005-11 75 Table 10: Externally developed portfolio, sales ($m), 2005-11 81 Table 11: Molecule type overview, sales ($m), 2005-11 91 Table 12: Key products overview 98 Table 13: Zetia/Vytorin: overview 99 Table 14: Zetia: sales forecast ($m), 2005-11 100 Table 15: Vytorin: sales forecast ($m), 2005-11 100 Table 16: Zetia/Vytorin: news flow 101 Table 17: Cozaar/Hyzaar: overview 105 Table 18: Cozaar: sales forecast ($m), 2005-11 106 Table 19: Hyzaar: sales forecast ($m), 2005-11 106 Table 20: Cozaar/Hyzaar: news flow 107 Table 21: Zocor: overview 110 Table 22: Zocor: sales forecast ($m), 2005-11 111 Table 23: Zocor: news flow 111 Table 24: Singulair: overview 115 Table 25: Singulair: sales forecast ($m), 2005-11 116 Table 26: Singulair: news flow 116 Table 27: Gardasil : overview 119 Table 28: Gardasil : sales forecast ($m), 2005-11 120 Table 29: Gardasil: news flow 121 Table 30: Januvia : overview 124 Table 31: Januvia : sales forecast ($m), 2005-11 125 Table 32: Januvia: news flow 125 Table 33: Fosamax: overview 128 Table 34: Fosamax: sales forecast ($m), 2005-11 129 Table 35: Fosamax: news flow 130 Table 36: Merck & Co.s R&D pipeline (Phase I-registration) List of Figures Figure 1: Historical and forecast ethical sales performance (% CAGR), Merck & Co. and Big Pharma peer set 5 Figure 2: Therapeutic focus vs. Big Pharma peer set (%), 2005 8 Figure 3: Launch, core and expiry, absolute sales growth, 2005-11 (sales as % of 2005 sales), Merck & Co. 9 Figure 4: Launch, core and expiry, absolute sales growth, 2005-11 (sales as % of 2005 sales), peer set 10 Figure 5: Molecule type, externalization and geographic market dependency (%) vs. peer set, 2005 11 Figure 6: Molecule type, externalization and geographic market dependency (%) vs. peer set, 2011 12 Figure 7: SWOT analysis of Merck & Co. 14 Figure 8: Revenue & growth rate (ethical sales) ($m), 2002-05 36 Figure 9: Ethical revenue ($m) and growth rate (%) vs. peer set, 2002-05 38 Figure 10: Growth drivers/resistor products of historical revenue performance ($m), 2002-05 39 Figure 11: Operating revenue/cost analysis ($m), 2002-05 43 Figure 12: Operating cost ratio analysis (% of total revenues), 2002-05 44 Figure 13: Operating cost ratio vs. peer set, 2002-05 45 Figure 14: Ethical revenue ($m) and growth rate (%), 2005-11 48 Figure 15: Top five products by sales ($m), 2005 51 Figure 16: Top five products by sales ($m), 2011 53 Figure 17: Growth drivers and resistors by product, 2005-11 54 Figure 18: Key strategic products, sales ($m), 2005-11 59 Figure 19: Ethical sales by therapy area ($m), 2005-11 62 Figure 20: Growth drivers and resistors by therapy area (%), 2005-11 63 Figure 21: Ethical sales by therapy area (%), 2005-11 66 Figure 22: Therapy area focus compared with peer set (% total ethical sales), 2005 68 Figure 23: Therapy area focus compared with peer set (% total ethical sales), 2011 70 Figure 24: Launch schedule, sales ($m), 2005-11 72 Figure 25: Core products sales growth ($m), 2005-11 74 Figure 26: Expiry schedule, sales ($m), 2005-11 76 Figure 27: Launch, core and expiry, sales ($m), 2005-11 77 Launch, core and expiry, absolute sales growth, 2005-11 (sales as % of 2005 sales), Merck & Co. 78 Figure 28: Launch, core and expiry, absolute sales growth, 2005-11 (sales as % of 2005 sales), peer set 80 Figure 29: Externalization dependency, sales ($m), 2005-11 82 Figure 30: Growth drivers and resistors, externally vs. internally discovered products, sales ($m), 2005-11 84 Figure 31: Externalization dependency vs. peer set, % total sales, 2005 85 Figure 32: Externalization dependency vs. peer set, % total sales, 2011 86 Figure 33: Geographical sales breakdown ($m), 2005-11 87 Figure 34: Growth drivers and resistors by geography, sales ($m), 2005-11 88 Figure 35: US dependency vs. peer set, % total sales, 2005 89 Figure 36: US dependency vs. peer set, % total sales, 2011 90 Figure 37: Growth drivers and resistors by molecule type, sales ($m), 2005-11 92 Figure 38: Molecule type sales breakdown ($m), 2005-11 94 Figure 39: Biologics dependency vs. peer set, % total sales, 2005 95 Figure 40: Biologics dependency vs. peer set, % total sales, 2011 96 Figure 41: IMS vs. company-reported ethical sales discrepancy ($m), 2005 136 Figure 42: IMS vs. company-reported ethical sales forecast growth rates (%), 2005-11 137