SG&A Efficiency Analysis: Comparing Merck & Co., Inc. and Arrowhead Pharmaceuticals, Inc.

SG&A Efficiency: A Tale of Two Companies

In the ever-evolving pharmaceutical industry, understanding the efficiency of Selling, General, and Administrative (SG&A) expenses is crucial. Over the past decade, Merck & Co., Inc. and Arrowhead Pharmaceuticals, Inc. have showcased contrasting strategies. Merck, a giant in the industry, consistently reported SG&A expenses around $10 billion annually, reflecting its expansive global operations. In contrast, Arrowhead Pharmaceuticals, a smaller player, saw its SG&A expenses grow from approximately $24 million in 2014 to nearly $125 million in 2022, marking a fivefold increase. This growth highlights Arrowhead's aggressive expansion and investment in administrative capabilities. Interestingly, while Merck's expenses remained stable, Arrowhead's fluctuated significantly, indicating a dynamic approach to scaling operations. The data for 2024 is incomplete, suggesting ongoing developments. This analysis provides a window into how these companies manage their operational costs, offering insights into their strategic priorities.