By Ransdell Pierson
March 7 Merck & Co will bring back one
of its veterans to head research and development, replacing
retiring Peter Kim, who leaves behind a mixed record over the
past decade at the drugmaker's highly respected laboratories.
Merck, after recent setbacks for some of its most important
experimental drugs, said former Amgen Inc research
chief Roger Perlmutter will take over from Kim on April 15,
although Kim, 55, will stay on as a company advisor until
"This is an acknowledgement by Merck that the status quo
wasn't getting desired results," said analyst Barbara Ryan of
Barbara Ryan Advisors.
The appointment represents a homecoming for Perlmutter, 60,
who joined Amgen in February 2001 after four years with Merck,
where he oversaw global basic research and preclinical
development. While at Amgen sales of its Epogen and Aranesp
anemia drugs plunged due to safety concerns.
But Perlmutter helped Amgen, the world's biggest
biotechnology company, branch out into new areas -- including
successful development of Prolia for osteoporosis and Sensipar,
used to treat dangerously high calcium levels in the blood. It
is testing treatments for cancer, cholesterol, psoriasis and a
promising new type of osteoporosis drug.
Most of the Amgen drugs are biologics, meaning they are
injectable products made in living cells and involve a costly
manufacturing process. But biotech drugs command far higher
prices than conventional pills, making them an increasing focus
"Merck may become more aggressive now in acquiring and
developing more biotech drugs," with Perlmutter as research
chief, Ryan predicted.
Perlmutter became Amgen's research chief only months after
Kim, then a 42-year-old professor at the Massachusetts Institute
of Technology, was selected to head research at Merck.
Merck has had several big successes under Kim's watch,
including development of its blockbuster Januvia diabetes
medicine, its Gardasil vaccine to prevent cervical cancer, its
Zostavax shingles vaccine and its Isentress treatment for HIV.
But more recently, it has been hurt by failed trials of
cholesterol treatment Tredaptive and migraine drug telcagepant,
and a regulatory delay for a new type of osteoporosis medicine
Merck's Vioxx arthritis drug was recalled in 2004 after
being linked to heart attacks and strokes, forcing Kim to defend
controversial clinical trials of the pill that were conducted
before his arrival.
New medicines are badly needed at Merck, where sales of its
onetime $6 billion-a-year Singulair asthma drug are plunging due
to generic competition and other medicines will soon face
cheaper generics. Moreover, cost savings from Merck's 2009
purchase of rival Schering Plough have mostly dried up and are
no longer able to boost company earnings.
"On balance, most investors we speak with have been
disappointed by Peter Kim's tenure as head of Merck's R&D,"
Leerink Swann analyst Seamus Fernandez said in a research note
"We believe a transition makes sense at this time."
Fernandez said he believed Perlmutter's 10-year tenure at Amgen
were "constructive. Overall he strikes us as a thoughtful
straight shooter and a decisive leader."
Merck praised Kim's tenure. "His contributions have
positioned us well for future success."
Shares of Merck were down nearly 1 percent in afternoon
trading on the New York Stock Exchange.