Merck has announced plans to shed its women’s health business, older legacy drugs and some biosimilars into a new independent company.
According to the company’s CEO, Kenneth Frazier, the move will allow Merck to refocus its portfolio on its pivotal drivers of growth including oncology, vaccines, animal health and acute care hospital drugs.
Some analysts expressed concerns that the move will put too much pressure on Merck’s flagship blockbuster, Keytruda, which currently accounts for 15 percent of the company’s sales and was predicted to reach 40 percent of its sales by 2024 (without a spinoff). Q4 sales of Keytruda grew 45 percent to $3.1 billion — but were below Wall Street expectations of $3.3 billion.
But Frazier said the tax-free spinoff company will allow Merck to “optimize” its human health portfolio and grow its R&D.
“Merck can move closer to its aspiration of being the premier research-intensive biopharmaceutical company,” Frazier stated.
Read the full Wall Street Journal report.
