Merck: Integration of new Schering-Plough unit is track, new drugs are approaching approval

Merck: Schering-Plough integration is track

Drugmaker Merck & Co.’s integration of Schering-Plough Corp. is progressing well, with sales and other operations already combined in 16 of its top 20 markets, sales rising in emerging markets and new medicines poised for approval, company executives said Tuesday.

Since the $41 billion Nov. 3 acquisition, Merck said, it’s been building sales of key products, launching new products for depression, asthma, fertility problems and other conditions in multiple countries, and retooling its sales approach to focus more on doctor and patient needs.

The Whitehouse Station, N.J., company gave analysts a daylong business briefing Tuesday, the first since the deal that made it the world’s second-largest pharmaceutical company.

“This merger is very much on track,” Chief Executive Richard Clark told analysts. “Today’s Merck is clearly succeeding. It is not just about the synergies, it’s about the science.”

Clark said Merck is best positioned in the industry to meet unmet medical needs, launch new products and maximize shareholder return, given its broad portfolio of drugs in development and its global presence.

Merck now has four drugs awaiting approval, including ones for schizophrenia, contraception, asthma and irregular heartbeat. More than 20 other drugs are in final-stage testing, including ones for osteoporosis, allergies and heart disease.

A new leadership team also has been assembled, including promoting Kenneth Frazier from head of global sales to president of Merck, a position that makes him the heir apparent when Clark hits Merck’s mandatory retirement age of 65 next March.

Clark noted that during the last two quarters, Merck boosted its total revenue by 7 percent. That’s despite cutting the combined country’s global sales force from roughly 13,000 in 2007 to about 7,000 now.

“We’re quite pleased that our global human health and animal care business showed growth,” and consumer care is poised for growth, Clark said.

Eight of the new Merck’s top 10 products grew through the normally disruptive period of integration, Frazier noted. Those include blockbusters Januvia and Janumet for diabetes, Singulair for asthma and hay fever, Zetia and Vytorin for cholesterol problems and Remicade for autoimmune disorders.

Peter Kim, head of Merck Research Labs, said that with the U.S. health care overhaul enacted, Merck’s 1 1/2-year-old division to make biologic drugs, Merck BioVentures, should be able to get quicker approval of follow-on, or generic, biotech drugs.

The company plans to make new biologic medicines and versions of existing ones that are either similar or improvements on existing biologic drugs.

Merck now has five new biologic drugs and two “biosimilar” ones in human testing and expects to have five programs in late-stage testing by 2012. But the company said it discontinued what was to be its first one, an anemia treatment known only as MK-2578.

In one of Merck’s longtime priority areas, cardiovascular medicine, the company now has six new drugs in large, late-stage tests. Those drugs are for preventing life-threatening blood clots, treating tissue damage caused by restricted blood supply, or treating atherosclerosis, or hardening of the arteries, said Luciano Rossetti, head of global scientific strategy.

The atherosclerosis drugs, which work by increasing levels of good cholesterol and decreasing levels of bad cholesterol and other harmful blood fats, include anacetrapib and Tredaptive, which already is approved in more than 45 other countries.

In midday trading, Merck shares fell 37 cents to $33.88.