Merck Promotes Frazier as Clark Nears Retirement
Merck & Co promoted its global head of pharmaceuticals, Kenneth Frazier, to company president on Wednesday, in a move likely to put him in line to succeed Chief Executive Richard Clark when he takes mandatory retirement next year.
"This is the next step in our succession plan," Clark said in an interview, while declining to say outright that Frazier would take the helm when he retires. Clark turns 65, the mandatory company CEO retirement age, next March.
Merck, the world's second-biggest drugmaker following its acquisition last year of Schering-Plough, said Clark would remain chairman and CEO as he relinquishes his role of president to Frazier. Clark became CEO in 2005, the year after Merck recalled Vioxx - then a blockbuster treatment for pain and arthritis - due to increased risk of heart attack and stroke.
Frazier was named head of global human health in 2007 after serving as the company's general counsel from 1999, during which time he successfully fought thousands of personal injury lawsuits filed against Merck by former Vioxx users. Merck settled the lawsuits for about $4.85 billion, billions less than investors had feared, boosting Frazier's profile within Merck and with Wall Street.
Many industry analysts have speculated that Frazier, 55, would be given the helm of Merck when Clark retires, although company Chief Financial Officer Peter Kellogg has also been considered a candidate. Clark, as Merck's head of manufacturing, was a fairly obscure figure when he was picked to replace then-CEO Ray Gilmartin in 2005.
Many analysts predicted he would be a mere caretaker until the harsh spotlight on the company's Vioxx crisis subsided. But Clark emerged as one of the industry's most aggressive and high-profile CEOs, quickly controlling the Vioxx fallout and spearheading an ongoing scramble to license drugs from other companies or to acquire biotechnology companies outright. That trend of looking well beyond Merck's own laboratories for new products culminated with the $41 billion acquisition of Schering-Plough Corp in November.
"As CEO, you have to build a very strong leadership team underneath you, and I have done that," Clark said. "The company has been left in very good stead."
Adam Schechter, now head of Merck's U.S. pharmaceuticals business, has been named to succeed Frazier as president of global human health, the company said on Wednesday. Frazier, as company president, will oversee pharmaceutical and vaccine sales and marketing, research and development and manufacturing and supply.
Merck, which also has an animal health business, has annual global sales of about $46 billion. With a number of drugs in late-stages of testing acquired from Schering-Plough, Merck is considered to have one of the industry's most promising drug pipelines. Should they be approved, Merck's next CEO could be off and running with a number of potential new blockbusters. They include a blood clot preventer nicknamed TRA (thrombin receptor antagonist) developed by Schering-Plough, which some analysts believe could fetch annual sales of up to $8 billion.
"The future of this company is extraordinarily bright," Frazier said in an interview. "We're at the forefront of a new wave of biomedical innovation."