Merck expects to increase deals to boost pipeline
* Expects to continue focusing on early stage products
* Aims to be leader in limited number of therapeutic areas
Jan 5 (Reuters) - Merck & Co said it expects to place more emphasis on developing specialty pharmaceuticals as it works to position itself for long-term growth.
Drugs prescribed by specialists, such as oncologists or rheumatologists, often require smaller sales forces than drugs prescribed by primary-care physicians such as blood pressure and cholesterol-reducing pills.
"We've decided we want to focus on a significant number, but not a very large number, of therapeutic categories," Merck Chief Executive Ken Frazier said at a Goldman Sachs healthcare conference. "Over time, I would expect a shift towards specialty."
That is not to say the company will not keep a major focus on big diseases such as heart disease and diabetes, but Frazier said it is also very interested in hepatitis C and other more specialized diseases.
Frazier also said the company plans to make more product acquisitions.
"Our goal is to find those assets that we can acquire on terms where we can create value for shareholders," he said.
Historically the company has focused its acquisitions on products in early stages of development, largely because they are relatively cheap and "you don't always see an auction." That strategy will continue, he said, but "we're also looking at Phase II and occasional Phase III compounds."
He said the company is "actively engaged" in expanding its diabetes franchise.
Frazier reiterated his stance that the company has no immediate plans to sell off its animal health or consumer businesses.
Rival Pfizer Inc is expected to spin off its animal health business and is considering what to do with its infant nutritionals unit. Regardless of whether that transaction goes well or badly, Frazier said Merck will make decisions about the businesses based on their ability to contribute to shareholder value.
"We like these businesses," he said. "We think they have underlying strong profitability and, in the case of consumer, complement our business."
However, he said, "I'm not dogmatic" about it. The question is "how to maximize the value of those businesses for shareholders." (Reporting by Toni Clarke, editing by Maureen Bavdek)
2012-01-05 time 17:56:44
Merck CEO: This year will be better
Merck & Co.'s CEO said Thursday that setbacks in drug development and other problems made his just-ended first year a tough debut.
But Kenneth Frazier expects better news in 2012 for the maker of diabetes blockbuster Januvia and Singulair for asthma and allergies.
Speaking to analysts at the Goldman Sachs' Healthcare CEO's Unscripted conference in New York, he said some important new drugs are on the horizon and Merck is pursuing deals for others that are in late testing. Until now, the Whitehouse Station, N.J., company has mainly pursued acquisitions of experimental drugs that are early in testing, when the deals are cheaper and there's less chance of getting into a bidding war.
"Last year, it couldn't possibly have started worse than it did," Frazier said.
In January, right after Frazier took the helm, Merck unexpectedly ended a late-stage study of a blood thinner that might have been a blockbuster, vorapaxar, due to bleeding risks. Problems held up other drugs in development, and Merck's return to shareholders _ quarterly dividend payments plus stock-price appreciation _ was the lowest among its peers.
"Certainly, I'm not pleased to be at the bottom of the industry," Frazier said, adding that, "Quietly, some really good things got done after those bumps in the road last year."
Merck resolved arbitration with Johnson & Johnson over rights to two important drugs for immune disorders, retaining most of the revenue its Schering-Plough unit had been receiving for helping to market Remicade and Simponi. The dispute followed Merck's $49 billion acquisition of Schering-Plough in November 2009, which triggered some major cost-cutting.
By AP News
Thursday, January 05, 2012 |
