Important note: Information in this article was accurate in 2008. The state of the art may have changed since the publication date.
Associated Press - December 9, 2008
During its annual business briefing, Merck tried to reassure investors it has the right strategy to resume growing - after recently announcing another major restructuring and forecasting lower profits and flat revenue in 2009 due to generic competition, the recession and other problems.
"Merck has been through tough times before and has rebounded in ways that few other companies have," Chief Executive Richard T. Clark told analysts, likely referring to the debacle over the withdrawn painkiller Vioxx. He predicted Merck "will be one of the winners in the pharmaceutical industry of the future."
The maker of respiratory drug Singulair and cholesterol drugs Vytorin and Zetia, which have been dogged by efficacy and safety questions, plans to seek U.S. approval for three new drugs next year, has seven more in late-stage testing and will start late-stage tests on six others in 2009.
Merck is launching a new division called Merck BioVentures to make both new and follow-on, or generic, biotech drugs, management told analysts gathered at its headquarters. Such generic biologic drugs, while starting to arrive in Europe, are not yet allowed in the U.S. - but that's likely to be a hot issue in Washington next year.
The unit will utilize new science to speed up drug development, including glycoengineering, a technology Merck got with a 2006 acquisition that allows rapidly making antibodies and other proteins for drugs in yeast, rather than the mammalian cells other companies use.
"We believe we can become the leading provider of high-quality ... follow-on biologics," Clark said.
Peter Kim, president of Merck Research Laboratories, said the unit will invest $1.5 billion in research by 2015, build a commercial factory by 2012 and aim to launch six or more generic biotech products from 2012 through 2017, a period when some major biotech drugs lose patent protection.
Questioned by reporters after the meeting, management refused to project future sales from the venture, with marketing chief Kenneth Frazier saying only that "this will be a tremendous commercial opportunity for Merck."
"This is also our entree into novel biologics," Frazier added.
Meanwhile, Merck said it is on track to reach its goal of $2 billion in sales from emerging markets including Brazil, China and India, countries where Frazier said Merck's vaccines and diabetes and HIV drugs match up with major health problems. The company is working to boost global sales of existing products even after they get generic competition, is focusing more on the needs of patients and doctors, and is expanding capacity to manufacture vaccines, Clark said.
The company just applied for approval to use its HIV drug Isentress in new patients - it's now just approved for those who have failed on other drugs - and still plans this year to seek approval for males to get Gardasil, its vaccine against cervical and other cancers. Approval of Gardasil in women aged 27 to 45 is pending.
Kim said Merck next year will apply to sell three drugs in the U.S.: for migraines, acute heart failure and hardening of the arteries. He also discussed several promising compounds in late development - including drugs for asthma, diabetes and osteoporosis and a vaccine to prevent costly, sometimes deadly staph infections.
Kim also briefly noted a few drugs in early human testing, for insomnia, colorectal cancer, anemia and hepatitis C, a virus very difficult to treat.
In its latest restructuring move, announced in October, Merck said it expects to cut 7,200 jobs by 2011 and save $4 billion by 2013.
Merck forecast 2009 profit of between $3.15 and $3.30 per share, excluding charges. Analysts polled by Thomson Reuters expected 2009 profit of $3.28 per share.
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AP Business Writer Damian Troise in New York contributed to this report.
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