Merck Reports Progress on Overhaul


merckThe drugmaker Merck & Co. is off to a strong start in its year-old program to cut costs, boost revenues and transform company operations, Chief Executive Officer Richard Clark said Tuesday.

The company this year launched five new vaccines and other medicines, all well received, without increasing its sales force, Clark told analysts at Merck's annual business briefing at headquarters in Whitehouse Station, N.J.

Merck is speeding up the time it takes to get experimental drugs through testing and onto the market, launching one of the five new products _ the diabetes drug Januvia _ about four years ahead of when it would have been approved under a traditional development schedule, he noted.

Meanwhile, the company has completed 3,900 of the 7,000 planned job cuts, closed or sold three of the five manufacturing plants slated for elimination and retooled its manufacturing network, he said.

'We are on our way to becoming a high-performance organization,' Clark said, adding, 'We still have much to do to truly transform Merck.'

Eight more potential products are on the horizon, he noted: three under review by U.S. regulators, three ready to be submitted for regulatory review and two others well into the final phase of human testing, he said.

'This year's strong performance has boosted our confidence in our ability to make the changes we have to make,' Clark said.

The company provided an update on the mounting litigation over Vioxx, the former blockbuster painkiller it pulled from the market on Sept. 30, 2004 after its own research showed Vioxx doubled the risk of heart attacks and strokes. Merck said Tuesday it now faces about 27,200 personal injury lawsuits over Vioxx, representing about 45,900 plaintiff groups, plus 265 potential class action suits.

Another 14,000 plaintiffs have entered agreements with Merck suspending the time limit for lawsuits. Suits by more than 3,000 plaintiff groups have been dismissed, although about two-thirds of those may be refiled later.

So far, Merck has reserved nearly $1.6 billion for its legal defense costs but has resisted setting aside any money to pay jury awards or settlements with plaintiffs.

Merck also reaffirmed the 2006 profit forecast it gave last week: from $2.18 to $2.25 per share, or $2.48 to $2.52 excluding charges for the ongoing restructuring program. Next year, the company has said it expects higher earnings per share, between $2.36 and $2.49 per share, or $2.51 to $2.59 excluding restructuring charges.

Merck shares slipped 11 cents to $43.90 in morning trading on the New York Stock Exchange

source -