Merck Chief Says Restructuring Coming Soon, Won't Discuss Cuts
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Nov. 27 (Bloomberg) -- Merck & Co. Chief Executive Richard Clark said a statement would come ``soon'' on a restructuring plan he's worked on since taking the job in May, and he wouldn't comment on a report it will include thousands of job cuts.
Clark, in a telephone interview today, declined to comment on a Nov. 26 report in the Wall Street Journal that Merck will cut jobs, close plants and trim research costs. He said he was ``very unhappy'' with the story and wouldn't discuss it as ``a matter of principle.''
``The problem with an article like that is that we haven't had time to talk to employees,'' Clark said. ``We're very unhappy. We want to tell our employees first.''
``The announcement will be soon,'' he added.
Merck, the No. 3 U.S. drugmaker, faces billions of dollars in liability from 6,400 lawsuits filed against the company over its recalled Vioxx painkiller. The Whitehouse Station, New Jersey-based company is also preparing for sales declines from its Zocor cholesterol drug, which loses patent protection next year, and Fosamax osteoporosis treatment, off patent in 2008.
The Wall Street Journal reported that Merck board members were advised on details of the restructuring on Nov. 22. Earlier in the year, analysts had said the restructuring announcement may come in December.
An unidentified spokesman for the company today would say only that Merck is ``engaged in a worldwide, large-scale review, and are carefully considering a variety of options.'' She declined further comment.
Shares of Merck rose 17 cents, or less than 1 percent, $30.98 on Nov. 25 in New York Stock Exchange composite trading. They had declined 4 percent this year through Nov. 25. The stock has declined 11 percent since May 5 when Clark replaced Raymond Gilmartin, who led the company for 11 years.
Profit
In the third quarter, Merck's profit rose 7 percent on lower marketing and production costs. Sales fell 2.2 percent. The company had costs of $80 million in this year's third quarter related to about 825 job cuts, Clark said on Oct. 24.
Merck is counting on drugs in development to push up earnings. In the third quarter, Merck won U.S. regulatory approval of its Proquad vaccine against measles, mumps, rubella and chickenpox, the first such combination in a single shot. Proquad combines the company's M-M-R II and Varivax vaccines for children 12 months to 12 years old.
Earlier this month, the company said its experimental vaccine prevented cervical cancer caused by two common forms of a sexually transmitted virus, human papillomavirus, which infects more than 5.5 million Americans each year. The medicine, to be sold as Gardasil, prevented 100 percent of cells on the cervix from becoming pre-cancerous and blocked development of a cancer that occurs on the cervix surface.
Sales of Gardasil may reach about $500 million by 2008, according to Scott Henry at Oppenheimer & Co. The total may be higher if the vaccine becomes mandatory, he said Oct. 6.
Vaccine Approvals
The company is also seeking approval for vaccines for the adult form of chickenpox and for rotavirus gastroenteritis.
Recently, the company had a setback when two Cleveland clinic doctors said U.S. regulators should delay approving the Pargluva diabetes pill, which Merck would market with Bristol- Myers Squibb Co., until a new study is conducted to rule out a link to heart attack and strokes.
Bristol-Myers on Oct. 18 said the U.S. Food and Drug Administration wants more information about Pargluva's heart risks before it can be sold. The agency requested more information from trials.
Merck withdrew Vioxx last year in the largest drug recall ever when a study showed it doubled heart injury risks after 18 months of daily use. Merck lost its first Vioxx trial in Texas against the widow of a man who used it for seven months and won a second in New Jersey against a man who used it two months.
Quick Guidance
Merck may get some quick guidance soon on how vulnerable it is in long-term cases. The judge who presided over the New Jersey case is managing 3,500 Vioxx suits and said last week that she wants her next 12 trials to focus on heart attack victims who took the drug for at least 18 months.
Merck has forecast earnings this year of $2.47 to $2.51 a share. That compares with a forecast in July of $2.44 to $2.52 and 2004 earnings of $2.61.
ng news concerning VIOXX
Nov. 27 (Bloomberg) -- Merck & Co. Chief Executive Richard Clark said a statement would come ``soon'' on a restructuring plan he's worked on since taking the job in May, and he wouldn't comment on a report it will include thousands of job cuts.
Clark, in a telephone interview today, declined to comment on a Nov. 26 report in the Wall Street Journal that Merck will cut jobs, close plants and trim research costs. He said he was ``very unhappy'' with the story and wouldn't discuss it as ``a matter of principle.''
``The problem with an article like that is that we haven't had time to talk to employees,'' Clark said. ``We're very unhappy. We want to tell our employees first.''
``The announcement will be soon,'' he added.
Merck, the No. 3 U.S. drugmaker, faces billions of dollars in liability from 6,400 lawsuits filed against the company over its recalled Vioxx painkiller. The Whitehouse Station, New Jersey-based company is also preparing for sales declines from its Zocor cholesterol drug, which loses patent protection next year, and Fosamax osteoporosis treatment, off patent in 2008.
The Wall Street Journal reported that Merck board members were advised on details of the restructuring on Nov. 22. Earlier in the year, analysts had said the restructuring announcement may come in December.
An unidentified spokesman for the company today would say only that Merck is ``engaged in a worldwide, large-scale review, and are carefully considering a variety of options.'' She declined further comment.
Shares of Merck rose 17 cents, or less than 1 percent, $30.98 on Nov. 25 in New York Stock Exchange composite trading. They had declined 4 percent this year through Nov. 25. The stock has declined 11 percent since May 5 when Clark replaced Raymond Gilmartin, who led the company for 11 years.
Profit
In the third quarter, Merck's profit rose 7 percent on lower marketing and production costs. Sales fell 2.2 percent. The company had costs of $80 million in this year's third quarter related to about 825 job cuts, Clark said on Oct. 24.
Merck is counting on drugs in development to push up earnings. In the third quarter, Merck won U.S. regulatory approval of its Proquad vaccine against measles, mumps, rubella and chickenpox, the first such combination in a single shot. Proquad combines the company's M-M-R II and Varivax vaccines for children 12 months to 12 years old.
Earlier this month, the company said its experimental vaccine prevented cervical cancer caused by two common forms of a sexually transmitted virus, human papillomavirus, which infects more than 5.5 million Americans each year. The medicine, to be sold as Gardasil, prevented 100 percent of cells on the cervix from becoming pre-cancerous and blocked development of a cancer that occurs on the cervix surface.
Sales of Gardasil may reach about $500 million by 2008, according to Scott Henry at Oppenheimer & Co. The total may be higher if the vaccine becomes mandatory, he said Oct. 6.
Vaccine Approvals
The company is also seeking approval for vaccines for the adult form of chickenpox and for rotavirus gastroenteritis.
Recently, the company had a setback when two Cleveland clinic doctors said U.S. regulators should delay approving the Pargluva diabetes pill, which Merck would market with Bristol- Myers Squibb Co., until a new study is conducted to rule out a link to heart attack and strokes.
Bristol-Myers on Oct. 18 said the U.S. Food and Drug Administration wants more information about Pargluva's heart risks before it can be sold. The agency requested more information from trials.
Merck withdrew Vioxx last year in the largest drug recall ever when a study showed it doubled heart injury risks after 18 months of daily use. Merck lost its first Vioxx trial in Texas against the widow of a man who used it for seven months and won a second in New Jersey against a man who used it two months.
Quick Guidance
Merck may get some quick guidance soon on how vulnerable it is in long-term cases. The judge who presided over the New Jersey case is managing 3,500 Vioxx suits and said last week that she wants her next 12 trials to focus on heart attack victims who took the drug for at least 18 months.
Merck has forecast earnings this year of $2.47 to $2.51 a share. That compares with a forecast in July of $2.44 to $2.52 and 2004 earnings of $2.61.
ng news concerning VIOXX
posted by Chris Placitella at 6:45 AM
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