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Merck & Co. Inc. to Buy Biotech Company

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Merck & Co. Inc. (NYSE:MRK) has announced that it has agreed to buy SmartCells Inc. which is a closely held company. SmartCells Inc. is currently working towards developing a new treatment for diabetes. The research is still in the early stages. The deal is likely to be worth more than $500 million, contingent upon the conditions for development, approval and revenue.

* SmartCells Inc. is working to produce a type of insulin which reduces the need to monitor blood sugar level.
* SmartCells Inc. is working on “SmartInsulin”.

The deal will help Merck & Co. Inc. in expanding its diabetes portfolio. Two of the company’s superstar products are related to diabetes. These drugs are Janumet and Januvia. These pills are used for treating Type 2 diabetes. The drugs had combined revenue of $2.58 billion during the last year.

Merck & Co. Inc. is a healthcare company with global presence. The company discovers, manufactures and sells various vaccines, medicines and therapies. The company also deals in animal and consumer products. It serves wholesalers, retailers and institutional clients. Merck & Co. Inc. was established in 1891. The company is based out of New Jersey.


Key Financial Stats

Valuation

* Price/Earnings(TTM)11.50
* Price/Cash Flow7.40
* Price/Sales (TTM)2.46
* Price/Book1.94

Financial Strength

* Quick Ratio (MRQ)1.00
* Current Ratio (MRQ)1.60
* LT Debt to Equity (MRQ)0.25
* Total Debt to Capital (MRQ)0.33
* Return on Equity14.20

Assets

* Asset Turnover0.60
* Asset per Employee.2M
* Inventory Turnover2.90

Per Share Data

* Earnings (TTM)3.06
* Current P/E Ratio1.60
* Cash Flow4.76
* Annual Dividend1.52
* Book Value18.04
* EBITDA21.70

Profitability

* Market Cap3.06
* Gross Margin (TTM)72.50
* Operating Margin (TTM)21.70
* Profit Margin (TTM) 17.90

Management Effectiveness

* Return on Equity (TTM)14.20%
* Return on Assets (TTM)7.30%
* Return on Investment (TTM)11.30%

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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