HMMMM_-New Research Head-Permutter- "Bullish MRK Investors speak to ME!"
The appointment of a new R&D head is good long term news however this means the following for investors:
a. Confirms the pipeline is dreadful.
b Also Permutter was R&D head for Amgen which focused on biologicals and proteins---this is not Merck's strength- Small molecules for Chronic disease treatments. Why is the importance-
1. Biological markets are much smaller than Mercks traditional markets for Chronic diseases.
2.. Dramatic changes in personnel requiring different R&D skill sets-biologists Not Chemists.
3. Merck's interim growth strategy is probably acquisitions not organic growth which means shareholder dilution.
4. Charge offs- Downsizing probable before too long and consolidation of research facilities absolutely certain.
Strong sell recommendation still in effect-
stale money for those who will watch the stock market go higher.
This is a real opportunity cost.
PS Former head of research-P. Kim is in his 50's is he really retiring !!!!