Merck Continues Nearly $1 Billion in Projects and Outlines Long-Term Strategy

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Researched by Industrial Info Resources (Sugar Land, Texas)--On top of its efforts to become a leaner firm, Merck & Company Incorporated (NYSE:MRK) (Whitehouse Station, New Jersey) plans to accelerate the development of a more customer-centric business model as it transitions into a newer Merck. "Next year will continue to be a period of fundamental transformation that establishes Merck as a different competitor in the next decade," Richard Clark, Chairman, President and CEO, said at the company's annual business briefing. "This new Merck will be built for the new era that our industry has entered, and it will be built for long-term success."

On the commercial side, Merck is working on a customer-centric selling model to gain a competitive advantage, with the hope of building trust with customers and improving patient outcome, Clark said. On the manufacturing side, he said the company has made strides toward lean, flexible, cost-effective capability. Clark also introduced several candidates for the company's product portfolio, including MK-633, a once-a-day treatment for respiratory diseases, and MK-2578, a potential new approach for anemia. The latter would be the first product for Merck BioVentures, a division built on the basis of biotech firm GlycoFi, which Merck acquired about two years ago. "Merck BioVentures was enabled by our acquisition of GlycoFi in 2006," said Peter Kim, Executive Vice President and President of Merck Research Laboratories. "Merck BioVentures is uniquely positioned for success as a result of the humanized GlycoFi yeast platform, which has the potential to provide us with a competitive advantage at a time when the patents on many marketed biologic therapeutics are set to expire."

He said the company is also taking a more aggressive approach to life-cycle management. Merck is working to expand the eligibility for some of its products, including Gardasil for both adult women and men, Isentress for treatment-naive HIV patients, and Zostavax for older patients from ages 50 to 59, Clark said. The company is also working to expand its geographic footprint. "Outside of the United States, we are also undertaking significant changes and will continue implementing innovative models," said Kenneth Frazier, Executive Vice President and President of Merck's Global Human Health division. "In Europe and Japan, where Merck is already implementing new models, the company is growing faster than the market and is positioned for further growth."

Industrial Info is tracking eight active projects worth $967 million involving Merck as part of our Pharmaceutical Tracker - Online Database. The projects include expansions ranging from $50 million up to $300 million.

Coming out of a tough year, in which Merck announced a 12% reduction of employees by 2011, Clark said he is unwavering in his belief that Merck will be able to achieve its goals. "This year has tested and proven Merck's resilience," he said. "Tough challenges and disappointments are no match for my determination to deliver on this promise to this great company. We have the right strategy, the right business model, the right product portfolio, the right pipeline and the right people to succeed."

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