Merck May Consider Partner For Schering-Plough Consumer Operations
July 21 2009 - 1:13PM
Dow Jones News
Merck & Co.'s (MRK) top executive said Tuesday the drug
maker might consider lining up an outside partner to invest in the
consumer-health operations Merck will inherit with its planned
purchase of Schering-Plough Corp. (SGP).
"Certainly there will have to be an investment in the consumer
business," Merck Chief Executive Richard Clark told analysts on a
conference call after reporting second-quarter earnings, adding
that the drug maker is now considering whether "we do it alone or
can we do it with a partner?" He added in an interview it was too
early to say in which direction Merck was leaning.
Schering-Plough's consumer business - which sells Claritin
allergy medicine, Dr. Scholl's foot-care products and Coppertone
sunscreen - generated about $1.3 billion in sales last year, or
roughly 3% of combined sales for the two companies.
Though it will be a small part of the post-merger Merck, Clark
said the consumer unit will be a "very important part of our
business moving forward from a diversification standpoint,
particularly in emerging markets."
But Merck's primary strengths are in prescription drugs and
vaccines, not over-the-counter health products. That has led to
some speculation that Merck may consider forming a
consumer-products joint venture with a company that has more
experience in consumer products.
Clark didn't discuss who might be a potential partner for the
Schering consumer-health operations. Other drug makers with
consumer units include GlaxoSmithKline PLC (GSK), Johnson &
Johnson (JNJ) and Wyeth (WYE). Wyeth has agreed to be acquired by
Pfizer Inc. (PFE).
Merck agreed to acquire Schering-Plough in March in a
cash-and-stock deal then valued at about $41 billion. The deal is
expected to close by the end of the year, subject to approval by
shareholders of both companies and government antitrust
regulators.
-Peter Loftus; Dow Jones Newswires; 215-656-8289;
peter.loftus@dowjones.com