clearn.png
Saturday December 4th, 2021 9:42PM

Longtime Merck CEO, minority advocate Ken Frazier to retire

By The Associated Press
Related Articles
  Contact Editor

Longtime Merck executive Ken Frazier, whose leadership helped bring the drugmaker one of the most lucrative medicines in history and who is one of the few remaining Black CEOs of a major corporation, is retiring.

Frazier, Merck’s CEO since early 2011 and an advocate for minority advancement who took on then-President Trump’s tacit support of white supremacists, will retire on June 30.

Frazier, 66, will be replaced by Rob Davis, the chief financial officer since 2014, the company said Thursday as it announced quarterly financial results. Frazier will become executive chairman of the board during a transition period. The change comes just months after Dr. Dean Li took over as head of Merck's research and development.

Frazier joined Merck, now based in Kenilworth, New Jersey, in 1992 as general counsel to one of the company's pharmaceutical businesses and worked his way up to the top job. He is one of the few Black CEOs at the head of a Fortune 500 company.

Last month, when Walgreens named Roz Brewer as its new CEO, there were four. With Frazier's departure, that number is back down to three.

Black people make up 12.8% of the U.S. population but only 0.6% of Fortune 500 CEOs are African-American. They earn 10% of all college degrees and hold 8% of professional positions, but only 3.2% of all senior-level roles at Fortune 500 companies, according to Coqual, a think tank that studies workplace diversity.

The main reason companies have few Black CEOs is that many rely on long-held perceptions of who has the skills to move into leadership roles, said Adia Harvey Wingfield, a sociology professor at Washington University in St. Louis. “Usually those images are not people of color, and usually they’re not of white women,” said Harvey Wingfield, who has researched racial and gender inequity in professional occupations. “What’s unspoken is these people are usually white men.”

Corporate policies about making promotions often are unclear, and research shows that Black workers are less likely to enter departments that channel workers into leadership roles, she said. “If you run a company and your view is just that implicitly you don’t see Black people as suitable for those types of jobs, chances are it’s going to be more difficult for them to get those types of jobs,” Harvey Wingfield said.

Last year, researchers at Stanford University’s Graduate School of Business studied the race, ethnicity and gender of employees who directly report to the CEOs of Fortune 100 companies. They found that women and people of color largely were not in positions that were responsible for leading a unit that reported a profit or loss, said David Larcker, a professor who took part in the study. Most CEOs, he said, are promoted after showing a record of posting profits.

“Under-represented groups were in functional areas that were very unlikely to result in promotion to CEO or board positions,” Larcker said.

Many people of color and women had jobs in human resources or other “cost center” areas that companies don’t usually mine for CEO or board positions, he said. But establishing why that happens is far more difficult, Larcker said.

“There are lots of explanations, discrimination is one,” he said. “There has to be lots of great talent and highly educated and high-energy, good ethics, across all genders and races."

Corporate America needs to change its perception of who is qualified to be a manager, and that can be done with leadership training programs that focus on advancing leaders of color, Harvey Wingfield said. They can also match promising Black employees with mentors rather than leaving it up to the employees to form relationships that could lead to promotions, she said.

At Merck, Frazier clashed with then-President Donald Trump over his refusal to condemn violence by the white supremacists who marched in Charlottesville, Virginia, in 2017.

“America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy," Frazier said at the time.

He stepped down from the president's manufacturing council and was attacked repeatedly by Trump on Twitter the same day. Other executives followed and the council was quickly disbanded.

Frazier spoke out publicly about inequality in the U.S. again last year during the protests that followed the death of George Floyd at the hands of police in Minneapolis. Frazier said it could just as easily have been him.

Frazier, a social justice advocate who has won awards from the NAACP and the National Minority Quality Forum, co-founded OneTen, a coalition of organizations committed to training and promoting one million Black Americans into family-sustaining jobs.

A Harvard-trained lawyer who grew up in a poor, rough Philadelphia neighborhood, Frazier was instrumental in successfully defending Merck against an avalanche of lawsuits after its 2004 recall of painkiller Vioxx for causing heart attacks and strokes.

He also helped orchestrate arguably the best deal Merck ever made, its $41 billion acquisition of fellow New Jersey drugmaker Schering-Plough in 2009. That deal primarily was targeted at getting the company's Organon women's health business, which Merck now is in the process of spinning off to boost growth by both companies after the split.

But Schering-Plough's research labs had a hidden gem that, once discovered and developed, became the world's leading cancer immunotherapy drug, Keytruda.

“None of us were smart enough to know what we had in pembrolizumab,” Keytruda's chemical name, Frazier said during a conference call with analysts Thursday.

Keytruda now generates $14 billion in annual sales — more than a quarter of Merck's revenue. It's approved for dozens of cancer types and patient groups, including two approvals in the fourth quarter, and currently is being tested in about 1,400 studies for additional uses.

More recently, Merck executed about 120 deals last year, including one to buy cancer drug developer VelosBio to further expand Merck’s cancer drug franchise. Both Frazier and Davis said Merck will continue its focus on driving growth through innovative science, rather than megadeals partly meant to cut costs.

Merck, one of the world’s top vaccine makers, announced last week it was scrapping its two COVID-19 vaccine candidates, because the immune responses they triggered in volunteers in early testing “were inferior to those reported with natural infection and the results” of other companies' experimental vaccines, Li said. However, Merck is continuing to test a pair of potential treatments for the new coronavirus and should have some study results in the next few months.

Merck reported a fourth-quarter loss of $2.09 billion, or 83 cents per share, partly due to a $2.7 billion charge for buying VelosBio. Adjusted income came to $3.4 billion, or $1.32 per share, well short of the $1.38 Wall Street expected.

A year earlier, Merck posted net income of $2.36 billion, or 92 cents per share.

Overall revenue was $12.51 billion, up 5% from a year earlier, but shy of the $12.67 billion projected by analysts. Keytruda sales came in just under $4 billion in the quarter, up 28% from a year earlier.

In afternoon trading, Merck shares were down $1.28, or 1.7%, at $76.03. Share prices have more than doubled, and revenue has nearly doubled, under Frazier as CEO.

Merck & Co. said it expects earnings per share for 2021 to range between $5.52 and $5.72. It expects revenue for the year of $51.8 billion to $53.8 billion. Analysts were expecting $6.30 per share and revenue of $51.66 billion, on average.

However, the company said those estimates will change if the long-planned spinoff of its Organon subsidiary occurs in the second quarter as planned. Merck also said that it expects the pandemic’s impact will cut 2021 revenue by 2%.

___

AP Business Writer Tom Krisher contributed to this report from Detroit. Follow Linda A. Johnson at https://twitter.com/LindaJ_onPharma

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Financial Markets, AP Business - Industries, AP Business - Health Care
© Copyright 2021 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Biden ending US support for Saudi-led offensive in Yemen
President Joe Biden plans to end U.S. support for a Saudi-led military offensive in Yemen
1:48PM ( 2 minutes ago )
'Ma Rainey,' 'Minari' and Boseman lead SAG nominations
Chadwick Boseman received two posthumous nominations from the Screen Actros Guild Awards on Thursday, while the Korean American family drama “Minari” and Spike Lee’s Vietnam veteran drama “Da 5 Bloods” were among the nominees for best ensemble
1:33PM ( 17 minutes ago )
House Dems ask Trump to testify under oath in Senate trial
House Democrats have asked former President Donald Trump to testify under oath for his Senate impeachment trial
1:33PM ( 17 minutes ago )
Associated Press (AP)
Voting company sues Fox, Giuliani over election fraud claims
A voting technology company is suing Fox News, three of its top hosts, Rudy Giuliani and Sidney Powell for $2.7 billion, charging that the defendants conspired to spread false claims that the company helped steal the U.S. presidential election away from former President Donald Trump
1:17PM ( 33 minutes ago )
The Latest: US catching up detecting coronavirus mutations
Health experts say the U.S. is behind in detecting dangerous coronavirus mutations but trying to catch up
1:16PM ( 33 minutes ago )
The Latest: National Lacrosse League season to start in fall
The National Lacrosse League says its plans for an abbreviated season this spring have been canceled due to uncertainties arising from the coronavirus pandemic
1:06PM ( 43 minutes ago )
AP Business
Longtime Merck CEO Ken Frazier to retire
Ken Frazier, the longtime chief executive of Merck and one of the few remaining Black CEOs of a Fortune 500 company, is retiring
11:31AM ( 2 hours ago )
Media grapples with how to cover Trump after White House
Two weeks into his post-presidency, Donald Trump has managed the counter-intuitive trick of dominating the news despite being nearly silent publicly
11:29AM ( 2 hours ago )
Hunter Biden's memoir 'Beautiful Things' out in April
Hunter Biden, son of President Joe Biden and an ongoing target for conservatives, has a memoir coming out April 6
11:24AM ( 2 hours ago )
AP Business - Corporate News
Yellen warns of 'tough months' ahead, urges congress to act
Treasury Secretary Janet Yellen says America has some “tough months ahead” in dealing with the coronavirus pandemic and for that reason it is critical that Congress pass President Joe Biden’s $1.9 trillion relief package
11:12AM ( 2 hours ago )
Yellen says 'tough months' ahead, more relief needed
Treasury Secretary Janet Yellen says America has some “tough months ahead” in dealing with the coronavirus pandemic and for that reason it is critical that Congress pass President Joe Biden’s $1.9 trillion relief package
8:32AM ( 5 hours ago )
Global shares mixed on caution after modest US gains
European shares have opened higher after a lackluster day of trading in Asia
4:20AM ( 9 hours ago )
AP Business - Financial Markets
Italy's Conte: Draghi's new government should be political
As Mario Draghi tries to secure lawmakers' backing to govern Italy, the nation's outgoing leader is warning the former European Central Bank chief against forming a Cabinet of "technocrats.”
11:03AM ( 2 hours ago )
Bank of England holds off more stimulus as vaccines roll out
The Bank of England has kept its key interest rates unchanged amid rising optimism over the British economy’s near-term prospects in the wake of the rapid rollout of coronavirus vaccines
7:57AM ( 5 hours ago )
The Latest: Red Cross to help poor countries with vaccines
A top international Red Cross organization has announced a $110 million plan to help support the immunization of 500 million people worldwide against COVID-19
5:53AM ( 7 hours ago )
AP Business - Industries
The Latest: Ontario to open all schools for in-person class
Canada’s most populous province of Ontario will reopen all schools for in-class learning this month despite the presence of new coronavirus variants and a high number of infections in Toronto and its suburbs
5:08PM ( 20 hours ago )
The Latest: San Francisco sues own district to open schools
San Francisco has taken a dramatic step in its effort to get kids back in public schools, suing its own school district to try to force classrooms to reopen amid the coronavirus pandemic
4:15PM ( 21 hours ago )
The Latest: National clap in UK honors Capt. Tom Moore
People up and down the U.K. took to their doorstep to honor Captain Tom Moore with a national clap, a day after the 100-year-old died after testing positive for COVID-19
3:21PM ( 22 hours ago )
AP Business - Health Care
'Ma Rainey,' 'Minari' and Boseman lead SAG nominations
Chadwick Boseman received two posthumous nominations from the Screen Actros Guild Awards on Thursday, while the Korean American family drama “Minari” and Spike Lee’s Vietnam veteran drama “Da 5 Bloods” were among the nominees for best ensemble
1:33PM ( 17 minutes ago )
Dr. Amy Acton leaves nonprofit to explore run for US Senate
Dr. Amy Acton, the former state health director who became the face of Ohio’s early pandemic response, is stepping down from her position at the Columbus Foundation to “carefully explore” running as a Democrat for the U.S. Senate
1:32PM ( 18 minutes ago )
Brazil's Vale signs $7 billion settlement in mining disaster
Brazilian mining giant Vale signed a settlement deal on Thursday to pay 37.7 billion reais ($7 billion) to the state of Minas Gerais, two years after a dam rupture in the city of Brumadinho killed more than 270 people
1:30PM ( 20 minutes ago )
Zuckerberg part of $100M ‘California Black Freedom Fund’
More than two dozen philanthropic organizations and corporations on Thursday launched the California Black Freedom Fund
1:24PM ( 25 minutes ago )
Biden speech to signal to world that America's back
President Joe Biden will make clear in a speech that the world should expect a more diplomatically engaged United States moving forward, starting with him putting the brakes on Donald Trump’s plan to withdraw thousands of U.S. troops from Germany
1:24PM ( 26 minutes ago )