Merck CEO to WSJ: 'I am frustrated'
Merck CEO Richard Clark told the Wall Street Journal that frustration is present within the ranks of the drugmaker as questions continue to swirl around the cholesterol drugs Vytorin and Zetia and the price of company stock sputters.
“I am frustrated,” Clark said. “I tell employees, ‘You must be frustrated by what happened in the short term, but be determined to deliver on our 2010 objectives.'”
Raymond James & Associates analyst Michael Krensavage told the Journal, “the next few months are critical for Merck…They'll determine whether the decline in the stock is an overreaction or a legitimate reflection of the value of the company.”
Merck faces review of several of its key drugs at the annual meeting of the American College of Cardiologists (ACC) this weekend. The company is also awaiting an FDA ruling on Cordaptive and a potential generic rival to AstraZeneca's heartburn medicine Nexium.
Investor disenchantment with Merck came on the heels of a year in which the drugmaker could seemingly do no wrong. However, in January, Merck and Vytorin marketing partner Schering-Plough released results of its ENHANCE study showing Vytorin to be no better than generic simvastatin in slowing progression of heart disease.
Schering-Plough CEO Fred Hassan addressed the controversy head on while Clark made few comments, an approach that may have cooled investors in Merck's stock.
“Our credibility in 2006 and 2007 was not misplaced; we'll have it again in 2008 and 2009,” Clark said. He told the Journal he was working on a new plan for 2011-2015, and that Merck is in the midst of 150 product launches in different countries.
Meanwhile, doctors at this weekend's ACC meeting in Chicago meeting are expected to review Merck's weight-loss pill taranabant, one of two Merck drugs the company plans to submit to the FDA this year. Krensavage says the drug has a potential for an annual $1 billion in sales. The second drug, cholesterol medicine Cordaptive, is predicted to fetch as much as $2 billion in yearly sales and is scheduled for an FDA decision in April. Cordaptive combines cholesterol drug niacin with a new compound designed to reduce niacin's flushing effect.
Clark said, “What's happening at ACC, and with Cordaptive and Nexium, are important, but I have a full agenda ... My responsibility is to take a long-term view, and not just a short-term one. The stock decline is a bump in the road, a setback, but our plan to win is long-term.”