Merck chief defends ‘bumpy’ 2011
pharmafile | January 6, 2012 | News story | Sales and Marketing | Kenneth Frazier, Merck
Kenneth Frazier has defended his company’s ‘bumpy’ performance in 2011, and has highlighted key drugs for investors to watch.
Frazier was speaking at an investor event held by Goldman Sachs, and made a frank admission on the firm’s 2011 performance.
“Going back to last year, it couldn’t have possibly started much worse than it did, frankly.”
Merck was rocked in January 2011 when its blood thinner vorapaxar – a potential blockbuster – had to be pulled from one trial and discontinued from stroke patients in another.
He added: “I’m certainly not pleased to be at the bottom of the industry cohort when it comes to total shareholder return.
“I acknowledge some shortcomings, but I think we also should be judged by how we deal with the shortcomings.”
Some investors were also displeased when the firm announced it would not make further cuts to its $8.6 billion R&D budget.
This led to a drop in the firm’s stock at the beginning of the year, but shares rallied in the last few months of 2011.
Frazier talked about was his firm’s pipeline, discussing specifically a number of late-stage drugs.
Merck plans to file eight new medicines in 2012 and 2013, including two allergy medicines, drugs for atherosclerosis and osteoporosis and V503, an improved version of Gardasil, its blockbuster cervical cancer vaccine Gardasil.
“Over time, I would see more of a shift toward specialty” drugs, plus heart and diabetes medicines, Frazier said. “We’re very interested in areas like hepatitis C, HIV and rheumatoid arthritis.
Frazier also made it clear that Merck was looking to augment the pipeline and acquire drug candidates “on terms where we believe we can create value for shareholders over the long term”. He added that Merck had traditionally found “the sweet spot has been earlier rather than late, but we are also looking at Phase II compounds and the occasional Phase III compounds”.
He said the licensing deals with Indian generics maker Sun Pharma and the Chinese pharma firm Simcere were also major achievements in increasing its presence in emerging markets.
Ben Adams
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