April 28 (Bloomberg) -- Merck & Co. named Kenneth C. Frazier as president effective May 1, succeeding Richard T. Clark, who will continue as chairman and chief executive officer.
Frazier, 55, had been president of Merck’s Global Human Health worldwide sales and marketing division. Adam H. Schechter, 45, who was head of Merck’s U.S. pharmaceutical business, will succeed Frazier as president of the global human health unit, the company said today in a statement.
Merck acquired Schering-Plough Corp. for $41 billion in November 2009 and is eliminating 15,000 employees by 2012 to lower costs. As president, Frazier will oversee the Whitehouse Station, New Jersey-based company’s three largest worldwide divisions and report to Clark, 64. Merck’s mandatory retirement age is 65 for the chief executive position, and the company has begun planning for his successor, Clark said today in a telephone interview.
“I’m committed to making sure our transaction and our merger success will be completed, so I’m not going anywhere,” Clark said. “Merck’s leadership team is so strong today, that I think we have the talent inside” the company for a new CEO, he said.
Merck gained 8 cents to $34.56 at 4 p.m. in New York Stock Exchange composite trading. The company’s shares have increased 49 percent in the past 12 months. Merck’s shares have fallen less than 1 percent since Clark was named CEO on May 5, 2005.
“The specific challenge for me is continuing to work closely with our head of R&D to get a greater understanding of what goes on in our labs and to be able to provide value with our head of research,” Frazier said today in a telephone interview.
Frazier, a graduate of Penn State University in University Park, Pennsylvania, and Harvard Law School, joined Merck in 1992 as vice president and general counsel of the Astra Merck Group. He became senior vice president and general counsel in 1999, before becoming an executive vice president in November 2006, and executive vice president and president of the global human health business in 2007.
“Ken and I have been involved in developing the strategy that we’re implementing today, so it’s really a seamless transition,” Clark said. “Ken and I have worked together for 18-19 years, and we’ve had a great working relationship.”
Frazier played a pivotal role during Merck’s legal defense against thousands of claims that its Vioxx painkiller drug caused heart attacks and strokes, Mike Krensavage, head of Krensavage Asset Management in New York, said in a telephone interview. Merck withdrew the drug from the market in 2004 when a study showed the medicine doubled the risk of heart attacks and strokes.
“His stature at Merck rose as he helped defuse the Vioxx time bomb,” Krensavage said.
Merck set up a $4.85 billion settlement fund in 2007 to resolve thousands of Vioxx-related injury claims. The company said last month that 13 states have sued seeking refunds of the money they paid for the drug. The U.S. Supreme Court yesterday allowed a shareholder lawsuit against Merck over Vioxx to proceed.
Schechter, a graduate of La Salle University in Philadelphia, joined Merck as a sales representative in 1988. He is a former general manager of the Merck/Schering-Plough cholesterol joint venture, the company said.
Schechter “knows the business from the ground up and has a strong record of performance” Clark said in the statement.
Merck and Paris-based Sanofi-Aventis SA announced March 9 they would combine their veterinary medicine units, creating the world’s largest animal-health business with combined sales of more than $5 billion. The market for animal-health products is growing more quickly than sales of drugs for humans.
To contact the editor responsible for this story: Reg Gale at Rgale5@bloomberg.net