Xconomy has a look inside the Merck-Sirna acquisition, an interview with Merck's head of that area. As you'd guess, he emphasizes that one of the biggest challenges in the field is delivery, and he makes the pitch that this is how Merck is going to make this work out:
What you often read about, but many people don’t understand, is how hard it is to make a drug. Our approach to RNA Therapeutics is made with a recognition of the full package it takes to launch a successful commercial product. . .That’s versus another strategy you see from smaller companies, which is to get an interesting experimental result, and publicly disclose it in an attempt to increase the value of your investment or a VC’s investment, without a real [awareness] of what it will take to make a therapeutic eight years later. . .
We immediately, after the acquisition, invested not just heavily in the RNA piece that is here in San Francisco, but we built an entire delivery group in West Point, PA. The thing that continues to differentiate Merck is that we have people with decades of experience in pharma R&D, drug safety, metabolism, pharmacokinetics. . .
Outside of RNA as a therapy in itself, he also talks about Merck's use of the technology to better understand its small-molecule targets. It's not something that you'll ever see press releases about, but trustworthy data of that sort is very useful and important. As the Xconomy interviewer notes, Wall Street values this sort of thing as basically zero (partly because you can't see the results of it for quite a while, if they're ever made public at all), but the value inside the company can be significant.
Of course, there can be things that happen inside drug companies that significantly destroy value, too, and it's not like the stock market can see (or understand) many of those, either, but that's a topic for another post entirely. . .and on a not perhaps unrelated note, one part of the interview above seems to suggest that "POS" is an internal Merck acronym for. . .wait for it. . ."probability of success". I, uh, kid you not.