Merck Lays Out New Management and Organizational Structure

Merck & Co. (Whitehouse Station, NJ) outlined a new organizational structure and named top management and senior leaders for the company, effective upon the completion of its merger with Schering-Plough (Kenilworth, NJ). Merck and Schering-Plough agreed to merge in a $41-billion deal that was announced in March 2009. The companies expect the transaction to close in the fourth quarter of 2009. 

As previously announced at the time of the merger agreement, Richard T. Clark, Merck’s chairman, president, and CEO, will be CEO of the combined company. The new Merck will have five primary divisions: global human health; animal health; consumer healthcare; Merck Research Laboratories; and Merck Manufacturing. Each division and global support function leader will be a member of the new Merck executive committee and will report directly to Clark. The leaders of the executive committee, in turn, named the executives who will lead their divisional and functional teams at the new Merck. About 40% of Schering-Plough's senior leaders will be part of the newly combined company in executive roles. 

Kenneth C. Frazier, currently executive vice-president and president of global human health, will lead the new global human health organization. The new organization, which will be the company’s largest division, will include the company's prescription, vaccines, and biologics businesses. The company also will create new franchises focused on women's health and endocrine and mature brands. 

A new emerging markets group will be part of the new global human health organization and be charged with focusing on regions that represent significant new growth opportunities, according to the company. These areas include China, Asia-Pacific, Latin America, and Middle East/Africa/Eastern Europe, including Russia and Turkey. 

Raul E. Kohan, currently senior vice-president and president of Intervet Schering-Plough Animal Health, will lead the new Merck's animal-health business. Kohan will report to Clark and serve on the executive committee.  

Stanley F. Barshay, currently chairman of consumer healthcare at Schering-Plough, will lead this business for the new Merck on an interim basis while the company searches for a permanent leader. Barshay will report to Clark and serve on the new Merck executive committee.

The new Merck Research Laboratories will be led by Peter S. Kim, PhD., currently executive vice-president and president of Merck Research Laboratories. The new structure of Merck Research Laboratories is designed to foster innovation and create greater accountability at all stages of research and development through two core functions: (1) discovery and preclinical development and (2) clinical development and regulatory affairs. In addition, a new central franchise structure focused on portfolio management will be aligned with the company's global human health division. The new Merck Research Laboratories will also include a worldwide licensing group. The combined research organization will have three new areas of dedicated focus: emerging markets, vaccines, and biologics.

Four of the top leaders from Schering-Plough Research Institute (SPRI) will hold leadership positions in the new Merck Research Laboratories in senior preclinical, clinical, and licensing roles. 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 broad integration of Merck Research Laboratories and SPRI employees, and the company plans to maintain the continuity of key late-stage development programs from Schering-Plough.

The new Merck Manufacturing division will be led by Willie A. Deese, currently executive vice-president and president of Merck Manufacturing. The new Merck Manufacturing division will include new units for consumer health and animal health and expanded 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 vice-president of human resources; Peter N. Kellogg, executive vice- president and chief financial officer; Bruce N. Kuhlik, executive vice- president and general counsel; and J. Chris Scalet, executive vice- president of global services and chief information officer. 

Richard S. Bowles III, Ph.D., currently senior vice-president of global quality operations at Schering-Plough, will serve as chief compliance officer at the new Merck. He will report directly to Clark and serve on the executive committee. The company will appoint a chief medical officer that will report directly to Clark and serve on the executive committee following an internal and external search of candidates. 

Adam Schechter will continue leading the integration effort for the new company, reporting to Clark in this role, and will also lead the combined company's US market. Brent Saunders, who has been leading Schering-Plough's integration team, also will continue to support the integration process following the merger's close.