UPDATE: Merck Names Former Amgen Executive as Research Chief
--Peter Kim retires after 10 years as Merck's research-and-development chief
--Merck names former Amgen R&D chief Roger Perlmutter to replace Mr. Kim
--Merck is under pressure to deliver R&D successes after recent setbacks
(Adds details and background throughout; updates stock price.)
By Peter Loftus
Merck & Co. (MRK) named former Amgen Inc. (AMGN) executive Roger M. Perlmutter to lead Merck's drug research-and-
development arm, replacing Peter S. Kim, who is retiring.
The leadership change comes at a critical time for Merck's R&D engine, which is under pressure to produce successful
new products to help offset sales lost to generic competition for older drugs. Mr. Kim's decade-long tenure included
some major product victories, but more recently Merck has had several R&D setbacks.
By hiring Dr. Perlmutter, Merck is tapping into his experience in the field of biotechnology-style drugs, in which
Amgen was a pioneer. Merck and other big pharmaceutical companies have tried to expand into biotechnology drugs, which
are often derived from proteins rather than traditional, chemical-based pills.
Aside from bringing new approaches to attacking disease, biotechnology drugs can also command higher prices and are
less directly exposed to generic competition than traditional pills.
Merck said Mr. Kim and Dr. Perlmutter will work together for an initial period, and Mr. Kim will remain with the
company as an adviser until his retirement in August. Dr. Perlmutter's appointment is effective April 15.
"Peter has decided to retire, and his succession planning is a really important priority," Merck spokesman Steven
Cragle said. He said Merck expects Dr. Perlmutter to "build and expand in key therapeutic areas where we currently are"
Dr. Perlmutter was executive vice president of research and development at biotechnology giant Amgen for more than 10
years, but he opted to retire in February 2012 amid a leadership transition there.
During Dr. Perlmutter's tenure, Amgen gained regulatory approval for drugs including bone-building treatment Prolia.
Before working there, he had previously been at Merck, joining the pharmaceutical giant in 1997 and working as executive
vice president of world-wide basic research and preclinical development.
Prior to joining the medical industry, Dr. Perlmutter was a professor in the departments of immunology, biochemistry
and medicine at the University of Washington, and was chairman of the department of immunology.
"I am honored to have the opportunity to return to Merck and to lead MRL," Dr. Perlmutter said.
Mr. Kim joined Merck Research Laboratories as an executive vice president in 2001 and was appointed president of MRL
in 2003. Before joining Merck, he served as a professor of biology at Massachusetts Institute of Technology.
Merck's R&D engine had a burst of productivity in the middle years of Mr. Kim's tenure. The company secured regulatory
approval of new vaccines including Gardasil for the prevention of cervical cancer, as well as HIV treatment Isentress
and diabetes drug Januvia. The products collectively have generated billions of dollars in sales for Merck.
But Merck's R&D engine also has experienced setbacks, including the recent decision to scrap cholesterol pill
Tredaptive after a large study showed it didn't provide a significant benefit to patients.
Merck also recently pushed back the timeline for seeking regulatory approval of a potential new osteoporosis drug,
odanacatib, because the company said it needed more study.
Merck Chief Executive Kenneth C. Frazier has resisted investor pressure to slash R&D spending, as some of Merck's
rivals have done. Merck continues to spend on large, costly late-stage clinical trials for experimental drugs, including
cholesterol drug anacetrapib.
Like other big drug makers, Merck faces sales erosion from patent expirations for top-selling drugs, most recently for
allergy and asthma treatment Singulair. The company has been cutting costs as part of an effort to soften the hit from
increased generic competition while also working to bring new products to market.
Merck previously has said it is on track to seek regulatory approval for five major new products by the end of 2013,
including potential treatments for insomnia and a next-generation vaccine against a cancer-causing virus. The drug maker
also has been focusing on areas such as hepatitis C and diabetes.
Last month, it said its fourth-quarter earnings fell as generic competition continued to weaken pharmaceutical sales.
Merck shares rose 13 cents to $43.81 in recent trading.
--Ben Fox Rubin contributed to this article.
Write to Peter Loftus at firstname.lastname@example.org
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