Merck's Kenneth Frazier to Retire as CEO at End of June -- Update
February 04 2021 - 9:59AM
Dow Jones News
By Jared S. Hopkins and Colin Kellaher
Merck & Co. on Thursday said Kenneth Frazier, its chairman
and chief executive, will retire as CEO at the end of June.
The Kenilworth, N.J., drugmaker said Robert Davis, currently
executive vice president of global services and chief financial
officer, will succeed Mr. Frazier as CEO, effective July 1.
"It has been a distinct honor and privilege to serve this great
company as its CEO over the past decade," Mr. Frazier said on the
company's earnings call Thursday.
Under Mr. Frazier's leadership, Merck became a leader in the
emerging field of cancer immunotherapy and in the development of
the drug Keytruda, now one of Merck's top sellers.
Keytruda, which treats lung and other cancers, totaled more than
$14 billion in global sales last year.
Mr. Frazier, a lawyer who has led Merck since 2011, is among the
few Black CEOs at S&P 500 companies and has been a leading
industry voice in recent years encouraging companies to hire more
Black employees. He has also steered Merck through criticism from
politicians and patients about how the industry prices its
medications.
Three years ago, the Merck board allowed Mr. Frazier to remain
CEO and no longer required the CEO to retire when he turned 65 in
2019.
Despite Keytruda's success, some investors and analysts have
worried that Merck may be too dependent on the therapy for growth.
In the last couple of years, Merck has done deals for small
companies to augment its pipeline, and it also plans to spin off
some slow-growth legacy products.
The selection of Mr. Davis is a likely sign of "intensified"
business development to reduce the company's dependency on
Keytruda, according to a Thursday note from Citigroup Inc. analyst
Andrew Baum. Keytruda sales made up nearly one-third of the
company's approximate $48 billion in revenue last year, Merck said
Thursday.
A graduate of Harvard Law School, Mr. Frazier worked at law firm
Drinker Biddle & Reath before joining Merck in 1992. He became
general counsel in 1999, and defended Merck from allegations that
its top-selling painkiller Vioxx increased the risk of heart
attacks and strokes. Merck agreed in 2007 to pay $4.85 billion to
settle thousands of claims.
Mr. Frazier has also been unafraid to take on delicate,
sometimes controversial topics, whether it was drug pricing or
former President Donald Trump.
Issues of race and the workplace have been an important issue to
Mr. Frazier. Last month he helped start a nonprofit organization
with other CEOs to connect employers with Black workers.
In 2017, Mr. Frazier stepped down from one of Mr. Trump's
business committees, saying it was a matter of personal conscience
after Mr. Trump's comments about racially charged violence in
Charlottesville, Va.
Mr. Frazier's announced exit follows the recent retirement of
longtime R&D chief Roger Perlmtter, who has been succeeded by
Dean Li.
Merck said Mr. Davis, who joined as CFO in 2014, will become
president on April 1, at which time the company's four operating
divisions will begin reporting to him. Prior to joining Merck, Mr.
Davis held roles at Baxter and Eli Lilly & Co.
Write to Jared S. Hopkins at jared.hopkins@wsj.com and Colin
Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
February 04, 2021 09:44 ET (14:44 GMT)
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