Merck FacesRising Pressure For New CEO
As questions about the company's handling of painkiller Vioxx mount, so is pressure on Merck & Co. to quickly find a successor to Chairman and Chief Executive Officer Raymond Gilmartin.
Merck's shares are skidding, its credit rating is under scrutiny and it may be facing a brain drain after the Vioxx withdrawal raised big questions about the company's future. Some on Wall Street in particular have called for change.
Merck has to reinvent itself "and find a way to grow again," says Lawrence Eakin , senior director of large-cap growth equity for Armada Funds in Pittsburgh. He isn't buying Merck shares but has increased stakes in rival drug makers, including Pfizer Inc. and GlaxoSmithKline PLC. Merck is "being pushed into a corner to make those changes. I think the board's starting to wake up, talking about succession for Gilmartin," Mr. Eakin says.
More pressure arrived yesterday when the British medical journal Lancet published an analysis of public clinical-trial data, concluding that Vioxx should have been withdrawn several years earlier because there already was clinical evidence of harmful side effects. A scathing editorial said approval of Vioxx by regulators and its subsequent sale in the face of evidence showing harm from the drug were "public health catastrophes."
The company has vigorously defended its conduct, saying it pulled Vioxx from the market as soon as officials learned definitively that the once-a-day pill increased the risk of heart attacks and strokes in patients who took the medicine longer than 18 months. Merck said yesterday it was "vigilant in monitoring and disclosing the cardiovascular safety of Vioxx" and that the Lancet study wasn't based on new data or as comprehensive as the company's own analyses. "Merck acted responsibly and appropriately as it developed and marketed Vioxx, and made decisions based on all available data at the time," the company said.
With one of the biggest questions looming over Merck concerning who will lead the company out of the morass, Merck has taken the first concrete step to find new leadership, tapping recruiters Heidrick & Struggles International Inc. to conduct a search, inside and outside the company, for a successor to Mr. Gilmartin.
Management and the board have consistently affirmed that it was the company's longstanding plan to name a successor to Mr. Gilmartin by the end of 2005, with a transition period extending until March 2006, when he reaches Merck's mandatory retirement age of 65. "The Merck Board of Directors has an orderly, thoughtful and coordinated succession plan in place," a spokesman wrote in an e-mail responding to a request for comment. "The Board is implementing the plan as originally developed."
Current events could speed up that schedule. Search firms usually complete a CEO hunt within six months. Some, especially those conducted under duress, don't take even that long. Coca-Cola Co., for example, ended its high-profile search for a new chairman and chief executive in early May by naming E. Neville Isdell, a former senior executive, to both posts. The search began in February, when Coke announced that then-Chairman and Chief Executive Douglas Daft would retire at year end. At the time, Coke was facing slow growth in crucial markets and a federal probe into alleged accounting fraud.
If that timetable were to play out at Merck, Mr. Gilmartin could step aside as early as the spring, more than a year ahead of the deliberate succession plan.
If Merck proceeds with a new CEO sooner than expected, the company could try to smooth an otherwise hasty transition by allowing Mr. Gilmartin to remain chairman for a while. That approach almost certainly would dissuade certain attractive prospects who would be concerned about possible second-guessing, such as current and former CEOs of major pharmaceutical concerns, recruiters say.
While several industry watchers say Merck should pick an outsider for the No. 1 spot as soon as possible, one industry official notes that the company has yet to sound out several obvious prospects, including Lodewijk J.R. de Vink, Warner-Lambert Co.'s former chairman, president and CEO.
Merck also needs to act quickly to stanch a brain drain. For the first time in recent memory, Merck résumés are flying around the industry, say recruiters and companies in the drug sector.
For years, Merck represented the pinnacle in the pharmaceutical industry, ranking as one of the most admired companies of any kind. A career at Merck, replete with lucrative stock options, was a destination rather than a stepping stone to something better.
But slowing growth, the failure of several drugs in final testing and the Vioxx fiasco have altered the career equation for some Merck employees. Now, "when we call them for specific jobs, they are very responsive," one industry recruiter reported.
Merck said it has "talented employees who are frequently sought after," but that, "fortunately, they are, and always have been strongly committed to the mission and values of Merck."
Another drug-industry recruiter reported receiving 20 calls from people at Merck in the past two weeks. That is an unusual volley of inquiries from one company in such a short period. The potential job hoppers work at the vice president level or just below; they are typically bright stars in marketing or research and development, this recruiter says. The recruiters don't want to be identified for fear of jeopardizing future business.
Merck also is under pressure to calm investors. Merck shares have slid 40% since Vioxx was withdrawn in September, wiping out $40 billion in market capitalization. Product liability looms large as a concern. The Wall Street Journal reported this week about internal Merck documents and e-mails suggesting Merck may have known more about the troubles with Vioxx than officials previously acknowledged. Despite a small bounce after President Bush won re-election, Merck slipped 12% this week, while many other pharmaceutical stocks rose.
"There's enormous concern about the lawsuits" regarding Vioxx, says David N. Dreman, chairman of Dreman Value Management, LLC in Jersey City, N.J. "Every decade there seems to be one major disaster with the big pharma companies," he says, likening Merck's woes to Wyeth's diet-drug debacle. Since 1997, Wyeth has set aside more than $16 billion to cover settlements, judgments and legal costs since the company pulled Redux and Pondimin following reports they damaged the hearts of some patients.
While Mr. Dreman's firm owns about four million shares of Merck, less than 1% of assets under management, he isn't a buyer, even at the current price. The shares were trading at $27.02, down 85 cents on the day, at 4 p.m. in New York Stock Exchange composite trading yesterday.
Merck now trades at about 10.8 times next year's estimated earnings, compared with a 15.3 ratio for the drug group, excluding Schering-Plough Corp., an industry outlier.
Standard & Poor's Rating Services placed Merck's triple-A corporate credit and senior unsecured debt rating on watch early this week with negative implications.
默克对新掌门人求之心切
对默克公司(Merck & Co.)来说，就像需要迅速解决其止痛药Vioxx所引发的问题一样，该公司为其董事长兼首席执行长雷蒙?吉尔马丁(Raymond Gilmartin)迅速寻找一位接班人的工作也是当务之急。
默克公司的股价正在不断下滑，其信贷评级正处于降级观察阶段，而且它还可能面临人才流失的窘境，此前该公司将Vioxx从市场上撤回的举动使外界对其未来产生了很大疑问。一些华尔街人士要求默克公司进行变革的呼声尤其高涨。
Armada Funds的大型成长性股票投资部门的资深经理劳伦斯?伊金(Lawrence Eakin)说，默克公司必须重新改造自己，找到再创辉煌之路。他没有购买默克的股票，但却在增持默克的竞争对手辉瑞(Pfizer Inc.)和葛兰素史克(GlaxoSmithKline PLC.)等公司的股票。伊金说，默克除了变革之外已别无退路，该公司董事会看来已明白这一点，开始谈论起吉尔马丁的继任人问题了。
昨天，更大的外界压力降临到了默克公司头上，英国医学杂志《柳叶刀》(Lancet)发表了一篇对公开的临床试验数据进行分析的文章，该文称Vioxx其实早在几年前就应从市场上撤回了，因为已经有临床证据显示该药物会产生有害的副作用。《柳叶刀》还为该文配发了一篇措辞严厉的社论，称监管机构批准该药上市出售以及该药物在有证据显示它会对人体产生危害的情况下仍然得以出售，这简直是“公共健康的灾难。”
默克公司对自己的行为作了激烈的辩护，称在明确获悉服用Vioxx时间超过18个月的病人如果继续每天服用一次，则患心脏病和中风的风险将会加大后，该公司立刻就从市场上撤回了这一药物。默克公司昨天表示，它正在密切关注服用Vioxx对心血管健康可能产生的影响，并在及时披露这方面的新发现；该公司称，《柳叶刀》上那篇文章依据的并非新的试验数据，其分析研究的全面性也不及默克公司自己的研究。默克称，它在开发和营销Vioxx方面采取了负责任和正确的态度，作决定时考虑到了当时可以获得的所有数据。
鉴于默克公司目前面临的最大问题之一就是谁将带领该公司走出困境，因此该公司迈出的第一个坚实步骤就是为公司寻找新的领导层，它委托招募机构Heidrick & Struggles International Inc.在公司内外为其物色接替吉尔马丁的合适人选。
默克公司的管理层和董事会一直坚称，该公司早就计划在2005年年底之前任命一位吉尔马丁的继任人，这一过渡期将持续到2006年3月份，届时吉尔马丁将满65岁，达到默克公司强制退休的年龄。该公司一位发言人在回复采访提问的电子邮件中称，默克的董事会早就制定了一项有序而周全的领导层交接班计划，董事会目前正在按既定步骤推进这一计划。
当前的一些情况可能会加快这一进程。猎头公司通常会在6个月的时间内完成首席执行长继任人的物色工作。一些公司甚至还用不了这么长时间。以可口可乐公司(Coca-Cola Co.)为例，该公司大张旗鼓的董事长兼首席执行长物色工作于今年5月初结束，公司的前高层管理人士尼维利?衣斯德尔(E. Neville Isdell)受命接掌了这两个职位。这项物色工作2月份时才开始，可口可乐公司当时宣布，时任董事长兼首席执行长的道格拉斯?戴夫特(Douglas Daft)将于年底退休。当时该公司正面临一些重要市场业务增长缓慢的境况，并且联邦监管机构正在对其被控的会计欺诈行为进行调查。
如果默克也能像可口可乐一样迅速找到首席执行长的合适人选，那么吉尔马丁最早可能于明年春季就辞职，比原先精心制定的退休计划提前一年多。
如果默克任命新首席执行长的时间早于预期，那么默克可能会让吉尔马丁继续担任董事长一段时间，以避免仓促调换掌门人给公司带来震动。但猎头公司称，这样的安排几乎肯定会让某些出色的候选人犹疑，担心仓促就任后可能遭遇事后批评。
虽然一些行业观察家称默克应尽快从外部寻找首席执行长的人选，一位行业管理人士指出，默克尚未同沃纳-兰博特公司(Warner-Lambert Co.)前董事长、总裁兼首席执行长德文克(Lodewijk J.R. de Vink)这样的合适人选进行过接触。
默克还需要在防止人才流失方面快速行事。据制药行业的招聘人员和企业称，默克员工的简历如雪花般似的满天都是，这还是近年来首次出现这样的情况。
多年来，默克一直代表了制药行业的一个高峰，是最受人尊敬的公司之一。在默克就职，坐享大量具有吸引力的股票期权，对于许多优秀人才来说都曾是梦想的归宿，而不是前进道路上的一块垫脚石。
但增长放缓，数项药物未能通过最终测试以及Vioxx的惨败改变了一些默克员工对职业的想法。现在，“如果我们就具体的职位空缺给他们打电话，他们反应非常积极，”一位行业招聘人士称。
默克说过，它拥有非常出色的员工，这些员工经常会接到外界招聘方的电话，但幸运的是他们总是对默克非常忠诚，
制药业内一家招聘公司称，两周来接到了默克员工20个求职电话。在短时间内，从默克这样一家公司的员工中接到这么多求职电话，是非同寻常的。据这家公司称，希望从默克跳槽的员工最高达到了副总裁级，而且多是营销或研发领域的知名人士。这家公司不愿署名，是因为担心会影响到未来的业务。
默克在抚慰投资者方面也承受著压力。自从9月份Vioxx撤出市场以来，默克的股价已跌了40%，市值缩水400亿美元。产品责任风险仍令人担忧。《华尔街日报》(The Wall Street Journal)本周报导，默克的内部文件和电子邮件显示，该公司早已知道Vioxx药物的危险性。虽然布什赢得连任后，该股出现小幅反弹，但本周以来仍达到了12%的跌幅，而同期其他许多医药类股呈现上扬。
“围绕Vioxx的案子有很多担忧，”新泽西州Dreman Value Management的董事长德莱曼(David N. Dreman)表示，“似乎每10年，大医药公司都会出现一个大危机。”他说，默克的窘境已经快赶上惠氏(Wyeth)的减肥药风波了。自1997年以来，惠氏已拨出了160多亿美元用于和解、判决和法律成本等；有报导称，Redux和Pondimin有损一些患者的心脏后，该公司撤回了这两种药。
虽然德莱曼的公司持有大约400万股默克的股票，占其管理资产总额的1%以下，该公司现在并没有买入该股，虽然价格已跌了这么多。周四，该股在纽约证交所收于27.02美元，跌85美分。
默克目前的股价相当于明年预期每股收益的10.8倍左右，低于制药类股（不包括先灵葆雅(Schering-Plough Corp.)）整体15.3倍的预期本益比。
标准普尔评级服务公司(Standard & Poor's Rating Services)本周早些时候将默克的企业信用评级定为AAA，将其优先无担保债券的评级列入下调观察档。
