(Reuters) - Merck & Co Inc (MRK.N) Chief Executive Officer Kenneth Frazier will remain in the role beyond 2019, the drugmaker said on Wednesday, after it scrapped a policy requiring its CEOs to retire at the age of 65.
Frazier, who will turn 65 in December 2019, took the helm of the U.S. pharmaceutical company in 2011. On his watch, the company’s stock price has doubled and its cancer immunotherapy Keytruda has raked in blockbuster sales, becoming one of the leading products in a new generation of oncology treatments.
“CEO succession has been our top priority, and removing the mandatory retirement policy enables the board to make the best decision concerning the timing of that transition,” Merck’s lead director Leslie Brun said in a statement.
A source familiar with the company said the decision to end the policy was initiated by the board, not by Frazier, and gives the company flexibility to run a succession program without a deadline.
The source stressed the company’s strong bench of potential in-house CEO successors, including President of Global Human Health Adam Schechter, Chief Financial Officer Rob Davis and others.
Frazier made headlines last year when he became the first business leader to leave U.S. President Donald Trump’s now disbanded manufacturing council following Trump’s comments on a white nationalist rally held in Charlottesville, Virginia.
The grandson of a sharecropper, and son of a janitor, Frazier’s appointment to CEO in 2011 made him the only black person leading one of the major U.S. or European drugmakers.
Frazier made his name at Merck as the company’s general counsel, steering the company through daunting litigation over Vioxx, its widely used painkiller that was withdrawn from the market in 2004 after being linked to heart attacks.
Merck eventually paid nearly $5 billion to settle some 27,000 lawsuits brought by those who claimed to have been harmed by the popular arthritis treatment.
As chief executive, Frazier has focused the company around the development Keytruda, which has racked up approvals to treat numerous types of cancer, including lung cancer. Analysts expect annual Keytruda sales to reach nearly $11 billion by 2020 and keep climbing from there, according to Thomson Reuters data.
Merck also announced price cuts for some of its medicines in July, after Trump criticized drugmakers for failing to help reduce healthcare costs for consumers.
Merck’s shares fell 31 cents to $70.34 on Wednesday.
Reporting by Tamara Mathias in Bengaluru and Michael Erman in New York; Editing by Shailesh Kuber, Sai Sachin Ravikumar and Bill Berkrot