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To: reaper who wrote (178166)	7/8/2002 4:54:13 PM
From: Knighty Tin	Respond to of 436258

reap, I hope I sound more like an owner than an apologist. But the question remains, if you don't book the revenues, what do you do with the liability from those revenues? If you hide both, aren't you guilty of putting potential losses in a drawer and locking it out of sight? If you just book the liability, don't you think somebody will ask "what the hell are these unexplained liabilities? How can they claim that profit with this hanging over their heads?" So, do you put both in the income statement or both in the footnotes where analysts don't read them? I still think pumping profit margins is a greater sin than exaggerating revenues. And your choice is one or the other. I guarantee that if Merck had gone the other way, we would still be having a "scandal." It's the Lady or the Tiger and the lady is also a tiger. <g>

To: reaper who wrote (178166)	7/8/2002 10:46:58 PM
From: starhawke	Respond to of 436258

"agressive WSJ reporter" - Can't remember the last time I saw or heard those particular words together. <g>

To: reaper who wrote (178166)	7/9/2002 12:06:44 AM
From: Spekulatius	Respond to of 436258

Reaper - you are correct that MRK spends more in Capex then its pharma peers. Pharma companies typically spend about 50% of their R&D expenditures in Capex (See PFE, SGP, BMY). WIth MRK the ratio of Capex to R&D is about one. My best guess is that the Capex to R&D ratio as well as many other ratio is skewed by Medco. I have looked at MRK and would not touch the stock for another reason: Zocor is MRK biggest seller and its patent will expire in 2006. MRK has no sure thing in the pipeline to fill this gap. Zocor may have close to 10B$ in sales in 2006 so this will be one of the biggest patent expirations ever. How will they make up for this?