Merck eyes deals, growth through 2013

By Ransdell Pierson and Bill Berkrot

NEW YORK (Reuters) - Merck & Co Inc's (MRK.N) CEO sees profit growth from 2010 to 2013 despite looming generic competition for two of its biggest drugs, and has the appetite to buy a big biotechnology company if the right deal comes along.

Merck is known for doing relatively small deals involving drugs in early stages of testing, rather than costly outright acquisitions of companies.

When asked whether he was willing to spend more than $1 billion on a future deal, Chief Executive Richard Clark said he would consider buying a biotech company with annual revenue of as much as $5 billion to $10 billion, as long as it was profitable.

"There are a lot more potential licensing (deals) and acquisitions out there," he said, citing declining stock values of biotechs.

He is interested in acquiring late-stage products next year, Clark said.

There are only a handful of biotech companies with annual revenue as high as $5 billion, including Gilead Sciences Inc (GILD.O), Biogen Idec Inc (BIIB.O), Genzyme Corp (GENZ.O) and Celgene Corp (CELG.O).

Even as he casts his eye elsewhere, Clark expressed confidence in the sales potential of medicines Merck already has.

"Certainly, products we have now and products in our pipeline" will help shore up profits in the early part of the next decade, Clark told the Reuters Health Summit in New York.

The company projected mid-to-high single-digit earnings growth from 2005 to 2010 last month, but did not signal forecasts beyond that period.

Company revenue from its hypertension drug Cozaar and asthma drug Singulair will plunge in 2012 because of generic competition for the blockbuster products.

Clark touted Merck's experimental drugs that treat heart failure, migraine headaches and osteoporosis.

The heart failure medicine rolofylline, which it acquired last year "will be an important drug," he said.

Clark also said he sees a "tremendous opportunity" in use of its cervical cancer vaccine, Gardasil, in men. The company aims to seek U.S. approval for that indication this year, for males aged 9 to 26.

Merck recently pulled the plug on development of its experimental obesity treatment taranabant after the class of drugs was linked to psychiatric side effects, including suicidal thoughts.

But unlike Pfizer Inc (PFE.N), which not only pulled a similar drug, but said it would abandon the entire cardiovascular space, Merck remains in the heart medicines game.