Merck research chief sees more deals ahead

NEW YORK (Reuters) - Merck & Co, which on Tuesday completed its purchase of Schering-Plough Corp, is now the world's foremost developer of heart drugs and will continue to aggressively acquire medicines for a wide range of illnesses, the company's research chief said.

Peter Kim said it would be a mistake to assume that Merck's (MRK.N) appetite for licensing medicines or buying smaller drugmakers would slacken on the heels of the $41 billion Schering-Plough merger, which makes it the world's second-biggest drugmaker by sales.

"To the contrary, we're going to, at a minimum, continue the pace that we're on, as we move forward," said Kim, who has in recent years spearheaded scores of drug deals meant to broaden Merck's pipeline of experimental treatments. He joined Merck in 2001 as executive vice president of research and development.

"We're very much keeping investment opportunities front and center; we want to continue to go around the world and identify the best opportunities and bring them into the new company," Kim said in a telephone interview, while visiting a Schering-Plough facility in the Netherlands.

Merck and Schering-Plough for years have co-marketed cholesterol fighters Zetia and Vytorin, which are blockbuster products even though their sales have fallen since early 2008 due to two studies that questioned their degree of effectiveness.

Kim said Merck decided to buy Schering-Plough because the smaller company had a surprising number of promising drugs in late-stage trials for the same ailments Merck was researching, but worked using different approaches. "We're meshing the same therapeutic areas, with different mechanisms."

"When you look at the overall combined pipeline of the new company, I think it is the best in the pharmaceutical industry by far," Kim said, with more than 15 drugs in late-stage studies.

Merck is known for its research prowess, having developed in recent decades new types of medicines that have become standard treatments, including the first member of the statin class of cholesterol drugs and first ACE-inhibitor to treat high blood pressure.

Many other drugmakers have lost their research edge in the process of acquiring large rivals, a repeated pattern that Merck Chief Executive Richard Clark said his company aims to sidestep.

"We have studied and learned from those other companies," Clark said in a separate interview. "Our integration planning has focused on this issue, and I think we have a much higher probability of success, based on the fact that Merck and Schering-Plough have complementary pipelines."

The combined company will operate in more than 140 countries and have greater cash flow to invest in its products, said Clark, who noted that Merck plans to continue its current dividend.

Kim said Merck plans to remain a research powerhouse by giving leaders of individual disease areas -- such as heads of its cardiovascular and neuroscience divisions -- wide latitude in selecting which drugs will be developed. "The approach we're taking, to my knowledge, is unique."

"The one area at Merck that is going to stand out loud and clear is cardiovascular research; I think our cardiovascular presence is going to be second to none," Kim said. "We're already up there, but Schering-Plough's (drug portfolio) pushes us way ahead of everybody."

One of Schering-Plough's most promising drugs is TRA, or thrombin receptor antagonist -- a blood clot preventer in late-stages of testing that industry analysts believe could become a blockbuster product. If approved, it would be used with aspirin and other blood clot preventers to prevent new heart attacks.

Merck, meanwhile, is continuing late-stage trials of drugs to raise "good" HDL cholesterol -- including a so-called CETP inhibitor that has big sales potential.

Kim said Merck will become a major player in women's health, with Schering-Plough's array of contraceptives and fertility drugs. Moreover, he said Merck is eager to complete development of promising Schering-Plough treatments for hepatitis C and Alzheimer's disease.

Although Merck has said it plans to cut 15 percent of the combined company's workforce, Kim said the company will hold off making a decision on possible layoffs in research and development until it has time to "identify where the talent lies and to take a closer look at all the research projects."

Wall Street expressed its satisfaction with the merger on Wednesday, lifting Merck shares 6 percent to $32.57.

(Reporting by Ransdell Pierson, editing by Gerald E. McCormick)