Merck restructures, in preparation of Schering-Plough merger completion

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Richard T. Clark, chairman, president and CEO of Merck, announced Tuesday a new organizational structure, and named management and senior leaders for the new Merck, effective upon completion of the merger of Merck and Schering-Plough.

Clark was named CEO of the combined company when the merger agreement was signed in March. According to the Whitehouse Station, N.J.-based company, its new company will have five primary divisions: global human health; animal health; consumer healthcare; Merck research laboratories (MRL); and Merck manufacturing division (MMD). Each division will be a member of the new Merck executive committee and will report to Clark.

Kenneth C. Frazier, currently executive vice president (VP) and president of global human health (GHH), will lead the new GHH organization, which will include its prescription, vaccine and biologics businesses. The combined GHH will have a portfolio of in-line medicines and vaccines, along with a late-stage pipeline. GHH will be the new company's largest division and include executives from Merck and Schering-Plough.

Peter S. Kim, PhD, currently executive VP and president of the MRL, will lead the new MRL. The new structure is designed for R &D through discovery and pre-clinical development, and clinical development and regulatory affairs. Also, a central franchise structure focused on portfolio management will be aligned with the company's GHH division.

The combined research unit will have three areas of focus: emerging markets, vaccines and biologics. Four leaders from Schering-Plough Research Institute (SPRI) will hold positions in the new MRL in senior preclinical, clinical and licensing roles. Merck said that most of the basic research heads for SPRI's research sites will remain in their roles following the merger. The new Merck is preparing for the integration of MRL and SPRI employees, and plans to maintain late-stage development programs from Schering-Plough including, thrombin receptor antagonist, Simponi, Saphris, boceprevir, Bridion and IMPROVE-IT.

Stanley F. Barshay, currently chairman of consumer healthcare at Schering-Plough, will lead the same division for the new Merck on an interim basis while the company searches for a permanent leader. Clark said the new company plans to place an emphasis on growing the consumer business, particularly in markets outside the U.S. Schering-Plough's consumer healthcare business currently includes brands such as Claritin and Coppertone.

Willie A. Deese, currently executive VP and president of the current MMD, will lead the new MMD, which will create an interdependent global supply chain focused on the needs of the combined company's customers. It will include new units for consumer health and animal health, and technological capabilities for vaccines and biologics.

The new Merck executive committee will also include leaders of the following global support functions: Mirian Graddick-Weir, executive VP of human resources; Peter N. Kellogg, executive VP and chief financial officer; Bruce N. Kuhlik, executive vice president and general counsel; and, J. Chris Scalet, executive VP of global services and chief information officer.

Clark said that Richard S. Bowles III, PhD, currently senior VP of global quality operations at Schering-Plough, will serve as chief compliance officer at the new Merck.

The company also will appoint a chief medical officer following an internal and external search of candidates.

Merck and Schering-Plough continue to expect the transaction to close in the fourth quarter. Until that time, the companies will continue to operate as separate entities. The transaction remains subject to the satisfaction of customary closing conditions and regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.