NEW YORK — The Merck & Co. executive who successfully led the company’s legal strategy over the Vioxx recall was named CEO on Tuesday.
The promotion puts Kenneth Frazier in the top spot as the company continues integrating its US$41-billion buyout of Schering-Plough. The move added a strong pipeline of drugs as the company looks toward future growth.
Frazier, 55, is currently Merck’s president and will become a board member as part of the promotion. In April, he was named to his current position from head of global sales, where he oversaw operations in the company’s most lucrative unit. At the time, the move to president of the company made Frazier the most likely candidate to take over from Richard Clark, who was expected to retire per company policy at age 65 in March.
CEO Clark, who was a key force behind the Schering-Plough buyout, will remain chairman of the board. He has been CEO since 2005.
The promotion of Frazier completes an upward arc for the man credited with steering Merck through a storm of potentially debilitating costs as lawsuits poured in over the painkiller Vioxx. In 2004, it was pulled from the market because of concerns it doubled the risk of heart attack, stroke, and death.
General counsel at the time, Frazier had initially elected to fight the lawsuits. Victories in early trials helped the company develop a settlement deal for nearly all the cases for a total of $4.85 billion — well below what analysts had estimated as Merck’s liability. Frazier has said his key goal during the lawsuits was to uphold the company’s core values of putting science first.
He gained key experience as head of global sales, the company said, and helped to design a new sales model while improving cost structure and focusing on emerging markets. As president, he helped drive the growth of new products and a late-stage research and development pipeline.
He told The Associated Press on Tuesday that he is looking forward to focusing on the company’s pipeline of potential drugs, which include the cholesterol treatment Anacetrapib. That drug is a potential game-changer in the market, but it still has years to go in development.
“For the entire industry, the challenge will be continuing to innovate going forward,” he said.
That focus on the future was a key reason for the company’s buyout of Schering-Plough, which gave Merck the allergy drugs Nasonex and Clarinex along with animal health products, consumer health products, and a biotech division. Merck, based in Whitehouse Station, N.J., is the world’s second-biggest drugmaker by revenue.
Outgoing CEO Clark said the integration is “truly exceeding” expectations at the company.
Merck reported third-quarter results last month. Financially, the company met Wall Street’s quarterly expectations, after adjusting for a series of charges. Its revenue for the period surged 84 per cent because of the addition of Schering-Plough products. Merck’s top seller, the asthma and allergy drug Singulair, gained 12 per cent to reach just under $1.22 billion.
The push to drive sales of current treatments and build for the future occurs as the company faces generic competition on other products. Sales of the blood pressure drugs Cozaar and Hyzaar fell 51 per cent combined during the most recent period because of generic competition, driving overall prescription drug sales lower.
The sales drive includes continuing to tap into emerging markets such as China, India, and Russia, as revenue levels off in the U.S. and Europe.