Nathan Mendes Ronnie Ng Scott Perkins Zvi Rhine Zack Weaver Symbol: MRK Exchange: NYSE 12/4/2000

Profile Merck & Co., Inc. is a global, research- driven pharmaceutical company that discovers, develops, manufactures and markets a broad range of human and animal health products, directly and through its joint ventures and provides pharmaceutical benefit services through Merck-Medco Managed Care.

Major Drugs Zocor & Mevacor: Cholesterol Drugs Vasotec, Cozaar & Hyzaar: Hypertension and Heart Failure Fosamax: Osteoporosis Pepcid: Anti-ulcerant M-M-R II & Varivax- Live Vaccines Singulair: Asthma Crixivan & Strocrin: HIV Symptom Treatment Aggrastat: Prevents Blood Clots Vioxx: Arthritis

Expiring Patents 2000 –Pepcid –Vasotec 2001 –Mevacor –Prinvil Combined 1999 Domestic Sales of $3 Billion –Mevacor and Vasotec already being phased out

Growth Opportunities Vioxx Relief of osteoarthritis and acute pain Inhibits Cox-2 enzyme while protecting Cox-1 –Relieves pain while easy on the stomach More than 5 milion prescriptions in the first seven months on the U.S. market Once daily dosage- ease of use Competitive boost in efficient launch of Vioxx –Patients were able to start taking the drug within days of its approval

Growth Opportunities Zocor Lowers bad cholesterol levels and triglycerides while raising levels of good cholesterol (HDL) Money back guarantees if patients cannot reach their cholesterol goals Number 1 cholesterol lowering drug in the European market U.S. Market has room to grow –Only 4 out of 10 heart disease patients with dangerous cholesterol levels use a cholesterol lowering drug

Growth Opportunities Singulair Asthma medication Number of children with asthma has increased 160% since 1980 Fosamax Osteoporosis Only drug consistently proven to increase bone density Shows results within months of first dose –significantly shorter than most drugs

One Year Performance Up 23.4% from date purchased

Industry S&P Pharmaceuticals are up 22.5% (Year to October 6) S&P 1500 is -2.7% (Year to October 6) Concerns over pricing restraints over new Medicare prescription plans Income and Price Inelasticity of Drugs is favorable FDA is streamlining and making more efficient new drug approval processes Kick-ass margins –Upwards of 20%

Competitors

Recommendation HOLD