Major R&D Changes Planned at Merck
September 12th, 2013 // 2:13 pm @ jmpickett
The new top scientist at Merck is planning a lot of changes in the second biggest drugmaker in the US. Some of the planned changes include getting rid of dead end research plans and focusing its labs more on cancer drugs and biotechnology.
The new research and development chief for Merck, Roger Perlmutter, talked about his plans this week at a dinner with market analysts in Manhattan.
Perlmutter said that there will be major surgery done on the R&D division at Merck and it is going to take a good amount of time to recover, but the company will come out stronger. Analysts said after the dinner that they think that a large restructuring announcement of the R&D division at Merck is imminent.
Perlmutter said that Merck has in the past been too slow and cautious. It did not focus on new opportunities while business rivals moved quickly into biotechnology and away from primary care drugs. The overhaul for the R&D division at Merck would happen as the company, which is based in Whitehouse Station NJ, is getting ready for more competition for its #1 product – Januvia, a diabetes pill. It sold over $4 billion last year.
Perlmutter added that a large problem with Merck Research Labs is that it has too much red tape and does not take risks.
Need to Cut Layers at Merck R&D Division
Perlmutter noticed when he came to Merck that it was very process oriented. He has been trying to cut down on many of those administrative layers that are not needed.
Perlmutter came from Amgen and was the top scientist there. He started in June to streamline the R&D structure at Merck. Some of the changes have included eliminating senior managers.
There seemed to be far too many science projects where experimental drugs that weren’t major breakthroughs should have been stopped and canceled, rather than being able to go ahead.
Many primary care medicines that were developed before the new executive came to Merck have not been approved or are not going to have big sales. One of these is a sleep pill Suvorexant, which was not approved in the US this summer at its two higher doses. It also faces a lot of competition from generic drugs.
Emphasis at Merck on Efficacy
Perlmutter wants the group in R&D to inquire if a drug works well, first and foremost, and next whether it is safe to be developed. Before there was too much of a stress on safety and not enough stress on major breakthroughs in science.
He wants to see efficacy as the major objective and he thinks that focusing on safety too much leads to too much fear of risk.
Some of that fear of risk could be because of Vioxx, which is a painkiller that Merck pulled in 2004 after studies showed that it doubled the risks of strokes and heart attacks. Consumers sued Merck, and the company set up a 5 billion dollar settlement fund for those affected by the Vioxx problems.
Merck Focusing on Biotechnology and Cancer
Perlmutter intends to move the company from primary care drugs and into biotech and cancer drugs. The firm also is looking to buy experimental cancer drugs, although he has not determined which those might be. The company also needs more on market and experimental biotechnology medicines.
He intends to also try to speed up various experimental products in the area of vaccines and viral drugs.
