CEO Resolves to Make 2012 Better for Merck
Merck and Co. (NYSE:MRK) CEO Mark Frazier vowed Thursday that 2012 would be a better year for the company than last year. Frazier’s first year at the helm was a rough one with setbacks in drug developments and other problems. The new CEO says that there are important drugs on the horizon for the company and that they are also pursuing other drugs in late-stage development.
Erik Gordon, an analyst and professor at University of Michigan’s Ross School of Business, doesn’t take Frazier’s comments as a good sign. Yahoo! Finance quoted Gordon, who said, “Looking for late-stage deals is not a sign of confidence in the internal late-stage pipeline. Nothing is more expensive than a late-stage deal.” Merck has historically sought out drugs in early stage testing when the purchase price is significantly cheaper.
Frazier admits that last year didn’t go as planned. Yahoo! Finance quoted the CEO, who said, “Last year, it couldn’t possibly have started worse than it did.” Shortly after Frazier arrived at Merck in January, the company unexpectedly shelved a promising blood-thinner that was in late stage testing due to bleeding risks.
In June, the company halted work on a staph infection vaccine that wasn’t working as expected. Merck’s 2011 return to shareholders was the lowest in the drug industry. “Certainly, I’m not pleased to be at the bottom of the industry. Quietly, some really good things got done after those bumps in the road last year,” said Frazier.
In 2012, the company is seeking approval for two promising drugs, one an insomnia medication without morning drowsiness, and the other a drug to help patients come out of anesthesia. Yahoo! Finance quoted Frazier, who said, “Over time, I would see more of a shift toward specialty” drugs, plus heart and diabetes medicines. “We’re very interested in areas like hepatitis C, HIV and rheumatoid arthritis.”