Financial Case for Investment in Merck & Co.

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MERCK & CO., INC IS AN EXCELLENT COMPANY FOR INVESTMENT
Merck & Co., Inc. (Merck) is a global research-driven pharmaceutical company that discovers, develops, manufactures and markets a range of products to improve human and animal health, directly and through its joint ventures. Merck's products include therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. Sales by category of the Company's products during the year ended December 31, 2004, included atherosclerosis, hypertension/heart failure, osteoporosis, respiratory, anti-inflammatory/analgesics, anti-bacterial/anti-fungal, vaccines/biologicals, urology, ophthalmologicals, and human immunodeficiency virus (HIV) products. Merck sells its products primarily to drug wholesalers and retailers, hospitals, clinics, government agencies and managed healthcare providers, such as health maintenance organizations and other institutions.

The Company's offerings include atherosclerosis products, of which Zocor (simvastatin) is the largest-selling; hypertension/heart failure products, the most significant of which are Cozaar (losartan potassium), Hyzaar (losartan potassium and hydrochlorothiazide), and Vasotec (enalapril maleate); an osteoporosis product, Fosamax (alendronate sodium), for treatment and prevention of osteoporosis; a respiratory product, Singulair (montelukast sodium), a leukotriene receptor antagonist for treatment of asthma and for relief of symptoms of seasonal allergic rhinitis; anti-inflammatory/analgesics, which include Vioxx (rofecoxib), which was voluntarily withdrawn from the market worldwide on September 30, 2004, and Arcoxia (etoricoxib), agents that specifically inhibit the COX-2 enzyme, which is responsible for pain and inflammation (coxib); anti-bacterial/anti-fungal products, which includes Primaxin (imipenem and cilastatin sodium), Cancidas (caspofungin acetate) and Invanz (ertapenem sodium). Merck's vaccines/biologicals include Varivax (varicella virus vaccine live), a live virus vaccine for the prevention of chickenpox; M-M-R II (measles, mumps and rubella virus vaccine live), a pediatric vaccine for measles, mumps and rubella; Pneumovax (pneumococcal vaccine polyvalent), a vaccine for the prevention of pneumococcal disease, and Recombivax HB (hepatitis B vaccine [recombinant]). Its urology product, Proscar (finasteride) is used for treatment of symptomatic benign prostate enlargement. Merck's ophthalmologicals include Cosopt (dorzolamide hydrochloride and timolol maleate ophthalmic solution) and Trusopt (dorzolamide hydrochloride ophthalmic solution). The Company's HIV products include Stocrin (efavirenz) and Crixivan (indinavir sulfate) for the treatment of human immunodeficiency viral infection in adults.

Arcoxia has been launched in 51 countries in Europe, Latin America and Asia. On October 29, 2004, Merck confirmed that it had received an approvable letter from the United States Food and Drug Administration (FDA) for the Company's New Drug Application (NDA) for Arcoxia. On October 22, 2004, the European Medicines Evaluation Agency (EMEA) announced that it would conduct a review of all COX-2 inhibitors, including Arcoxia, in light of the worldwide withdrawal of Vioxx. The EMEA said that it had been asked to conduct the review by the European Commission as a precautionary measure and that it would look at all aspects of the cardiovascular safety of COX-2 inhibitors, including thrombotic and cardio-renal events. On February 17, 2005, CHMP announced that it had concluded that the available data show an increased risk of cardiovascular adverse events for COX-2 inhibitors as a class relative to placebo and some NSAIDS. According to CHMP, the data also suggested an association between duration of use and dose and the probability of suffering a cardiovascular event and therefore recommended use of the lowest effective dose of COX-2 inhibitors for the shortest possible duration of treatment.

CHMP introduced a contra-indication for all COX-2 inhibitors in patients with ischemic heart disease or stroke, and expanded the contra-indication for certain patients having higher classes of congestive heart failure. Specifically with respect to Arcoxia, CHMP also introduced a contra-indication in patients with hypertension whose blood pressure is not under control, and advised that Arcoxia may be associated with more frequent and severe effects on blood pressure, particularly at higher doses, than some other COX-2 inhibitors, and recommended monitoring of ...