By Bill Berkrot and Ransdell Pierson
NEW YORK (Reuters) - Merck & Co (MRK.N: Quote, Profile, Research, Stock Buzz) CEO Richard Clark, who just completed a transformational $41 billion purchase of Schering-Plough Corp, said investors will be expecting the company by mid-2010 to announce who will succeed him the following year.
Clark, who will reach the mandatory retirement age of 65 in March 2011, has led Merck since Ray Gilmartin stepped down in 2005 in the wake of the withdrawal of blockbuster arthritis drug Vioxx.
Clark's most immediate challenge is to shape what last week became the world's second largest drugmaker. But as the 38-year Merck veteran contemplates a far richer pipeline of drugs in development and a more geographically diverse company, Wall Street will be anxiously awaiting word of who will next lead the company.
"When I became CEO in 2005 my primary objective was to make sure that I had a very robust CEO succession plan in place that was approved by the board," Clark said on Tuesday at the Reuters Health Summit in New York.
"If the CEO succession planning does not go the way I think it's going to go, then my time as CEO will be a failure. That's how strong I feel about getting this right," he said.
Clark, who headed manufacturing at Merck before taking the helm, expressed confidence in his leadership team and said he is also seeking outside advice on the succession.
He would not comment on whether the next CEO might come from outside the company, saying that would ultimately be a decision for the board.
"But there will be plenty of internal talent to select from," Clark said.
Chief Financial Officer Peter Kellogg and head of pharmaceuticals Ken Frazier, who earlier as general counsel spearheaded Merck's defense against thousands of lawsuits filed by former Vioxx users who claimed to be harmed by the pain drug, are often mentioned as likely candidates.
Clark refused to tip his hand, but acknowledged that by the middle of next year Wall Street will be looking for answers.
He also declined to say whether he would be willing to stay on as chairman for a time after a new CEO is in place.
As Clark mulls his successor, he could face a big new challenge next week, when researchers present long-awaited data from a study of Merck's Zetia cholesterol treatment at the annual scientific meeting of the American Heart Association.
Sales of Zetia and a related Merck drug called Vytorin have plunged in the past two years following two studies that questioned their degree of effectiveness, but they still have combined annual revenue of about $4 billion.
The new study -- called ARBITER 6 -- compares the ability of Zetia and Abbott Laboratories Inc's (ABT.N: Quote, Profile, Research, Stock Buzz) Niaspan to stop or reverse clogging of neck arteries, and will compare their ability to prevent heart attacks and death. Zetia prevents the intestines from absorbing "bad" LDL cholesterol, while Niaspan, a long acting form of niacin, raises heart-protective "HDL" cholesterol.
Leerink Swann analyst Seamus Fernandez said on Monday that combined sales of Zetia and Vytorin could fall another 25 percent to 35 percent if Zetia falls short in the trial, as many industry analysts and doctors expect. Continued...
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