Merck CEO Frazier: "The future of the industry is going to be more partnerships"

Posted under Blog, Companies, Diagnostics, Funding, Hepatitis C, Kenneth Frazier, Medical Devices, Medical Supply, Merck, Mergers and Acquisitions, Pharmaceuticals, Startups, Universities, Victrelis, Videos by John Carroll

Merck ($MRK) CEO Kenneth Frazier is deploying his deal team this year with some very specific instructions to step up their game. Speaking to an investor group, the CEO made it clear that the pharma giant needs more deals to add new therapies to the pipeline. And he's particularly interested in roping some new hepatitis C programs.

"The future of the industry is going to be more partnerships," Frazier told an industry group at a Goldman Sachs' event in New York, according to a report in the Star-Telegram. "We're going to continue to look for more partners to create the best therapy for patients." He added: "My goal is to augment the pipeline. The way to augment is to find those assets that we can acquire. Typically, for Merck, the sweet spot has been (to acquire them) earlier rather than later."

Merck has been a big player in hepatitis C, recently gaining an approval for Victrelis. But Victrelis has lagged behind Vertex's Incivek, which in turn has been overshadowed somewhat but experimental drugs that promise to steal a big chunk of the blockbuster market.

Playing in the hep C field this year, though, could prove expensive. Gilead's ($GILD) recent $11 billion deal to acquire Pharmasset puzzled some analysts who felt the biotech was paying too much, too soon. But Merck has the cash on hand to counter any bid it likes--making this a seller's market.

- here's the story from the Star-Telegram

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Merck chief defends $8B R&D budget as vital long-term investment

Posted under Big Pharma, Blog, Companies, Diagnostics, Funding, Kenneth Frazier, Medical Devices, Medical Supply, Merck, Pharmaceuticals, Startups, Universities, Videos by John Carroll

One of the biggest debates in Big Pharma right now revolves around whether execs should be chopping back their multibillion-dollar R&D budgets as they attempt to reinvent the whole pipeline process or continue to bet ever-growing sums to R&D for new products to replace blockbusters now losing patent protection. Pfizer ($PFE) scored big with the analysts when it followed GlaxoSmithKline ($GSK) and others down the path to a more narrowly focused pipeline. But Merck ($MRK), Eli Lilly ($LLY) and others are sticking to their expensive guns. And Merck CEO Kenneth Frazier is mounting a strong defense for his $8 billion R&D budget.

In a clear jab at Pfizer, which has outperformed Merck since revealing its dramatic cutback on R&D, Frazier says that short term stock gains should not be made at the expense of long-term innovation.

"When one runs a company like Merck that has long lead times in terms of development, I think it's important to keep in mind that you're not necessarily running the company for the immediate reaction of the stock market," Merck CEO Kenneth Frazier told a group gathered by The Wall Street Journal, according to a report from Reuters' Lewis Krauskopf. In drug development, he added, innovation tends to run through cycles. You get waves of important approvals followed by the inevitable trough.

"If you look in the past, there have been other fallow periods for R&D, but over the long-term science has always made progress," he noted.

For now, Frazier is keeping the faith that his R&D operation is preparing to deliver the next big wave he can ride to a higher stock price.

- here's the story from Reuters

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