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UPDATE 4-Merck elevates Frazier to succeed Clark as CEO

* Former general counsel to take helm Jan 1

* Clark to remain chairman, oversee animal health program

* Shares off 0.6 pct (Adds Frazier comment, salary, background, closing share price)

NEW YORK, Nov 30 (Reuters) - Merck & Co MRK.N President Kenneth Frazier, whose legal strategy helped solve the drugmaker's Vioxx crisis, will succeed Richard Clark as chief executive officer.

Frazier, 55, made his name at Merck as general counsel by steering the company safely through daunting litigation over Vioxx, its widely used painkiller that was withdrawn in 2004 after being linked to heart attacks.

More recently, Frazier played a significant role in Merck’s $41 billion acquisition a year ago of U.S. drugmaker Schering-Plough Corp and has overseen the combined company’s research, manufacturing and marketing operations.

“I think we have much more opportunity than we have downside,” Frazier said in an interview on Tuesday, referring to the company’s pipeline of experimental drugs that some industry analysts consider second to none.

The Vioxx withdrawal raised concerns Merck would be tangled for years in litigation and eventually have to shell out $10 billion or more to tens of thousands of plaintiffs.

But Frazier’s strategy of fighting lawsuits one by one to build a string of victories in court led to a $4.85 billion settlement in 2007 that largely ended the Vioxx crisis and allowed the company and Wall Street to refocus on Merck’s pipeline of experimental medicines.

Merck's larger U.S. rival, Pfizer Inc PFE.N, also has a CEO -- Jeffrey Kindler -- who served first as its general counsel.

Frazier’s promotion, effective Jan. 1, has been expected since the 18-year Merck veteran was named president in April, after having served since 2007 as head of the company’s high-profile global pharmaceuticals division.

HUMBLE ROOTS

Frazier, who will be eligible for more than $10 million in compensation next year and sits on the board of Exxon Mobil Corp XOM.N and Pennsylvania State University, rose from humble roots.

The grandson of a sharecropper, Frazier becomes the only black CEO among large U.S. and European drugmakers.

He was raised in a rough Philadelphia neighborhood by his janitor father after his mother died when Frazier was 12, according to a 2004 interview. For extra spending money in college, Frazier caught newts and tadpoles and sold them to a local aquarium store.

Clark, who in March turns 65 -- the company's mandatory CEO retirement age -- will continue as board chairman and oversee formation of Merck's planned animal health joint venture with French drugmaker Sanofi-Aventis. SASY.PA

Loquacious and apt to quickly dispense with formalities -- “Call me Ken” is an oft-used greeting -- Frazier stays ship-shape with five-mile runs and has an affinity for history when time allows for outside reading.

“I do try to stay active in terms of running, although my knees are telling me I need to find an alternative,” said Frazier, whose energy will be put to the full test when he takes the helm of Merck and its global operations.

The company is in the process of reducing its work force by 15 percent, or about 15,000 jobs, to achieve $3.5 billion in planned annual cost savings by 2012 from the merger. By closing more than a dozen research and manufacturing sites, Merck hopes to strengthen its finances before its $5 billion-a-year asthma drug Singulair faces generic competition in two years.

Frazier joined Merck in 1992 as general counsel of the company’s joint venture with Swedish drugmaker Astra, and within two years became Merck’s head of public affairs. He became the drugmaker’s senior general counsel in 1999, and took charge of global pharmaceuticals in 2007.

In this role, according to Merck, Frazier helped design a new sales model and redeployed resources to emerging markets, where the drugmaker is targeting future growth.

“I don’t think there will be any major immediate changes at Merck because Ken has helped put into place the current plan,” said Deutsche Bank analyst Barbara Ryan. “Now he will execute on that plan.”

At a time when Merck and its rivals are girding for costly patent expirations on their biggest drugs, the Schering-Plough deal gave Merck numerous drugs in late-stages of testing that are deemed potential blockbusters.

They include a blood clot preventer and a promising treatment for hepatitis C. Merck has itself been developing a medicine to raise “good” HDL cholesterol that analysts believe could fetch annual sales of $5 billion or more.

Merck shares closed down 22 cents or 0.6 percent at $34.47 on the New York Stock Exchange. (Reporting by Lewis Krauskopf, Ransdell Pierson and Bill Berkrot; Editing by Derek Caney, Dave Zimmerman and Matthew Lewis)

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