>>> While a great scientist and a affable person he does not possess the knowledge or judgment of drug development or people required to turn Merck around. All you have to do is look at some of his key hires... Honig, DeGeorge, Choi...
Did Kim hire these people? Or did his predecessors?
As a former Merck employee who left in March all I can say is that Peter Kim et al., have done very little in terms of key decisions to turn things around. While a great scientist and a affable person he does not possess the knowledge or judgment of drug development or people required to turn Merck around. All you have to do is look at some of his key hires... Honig, DeGeorge, Choi... and decisions (re Vioxx). Need I go on? Speaks for itself doesn't it?
>>> also am very critical of management but lets also include Scolnick. This sob is the real cause of our problems, not only with Vioxx but with the company's poor pipeline.
He did allow the computer people like Qualters to run the information services divisionthat provided research tools to scientists. Important science information research tools that were in widespread use in other pharmas were actually withheld from mrl scientists under this arrangement.
Was the company a failure in the early 90's when an assult on the drug industry by the Clintons drove the price of Merck stock down to the middle 20's? I also am very critical of management but lets also include Scolnick. This sob is the real cause of our problems, not only with Vioxx but with the company's poor pipeline. I know that there are plenty of new drug candidates in early stage development but so what? Its whats in the cards NOW not 5-10 years down the road that counts. Kim may be a nice guy but after "Smiling Ed" who wouldn't be? Can you enlighten us on Kim's contribution to research? How has he personally redirected or began new projects that are showing signs of bearing fruit.
-- We're not as far apart as it may have seemed. I think a large part of the blame falls on Scolnick. The fact that there is nothing NOW his problem...
And having nothing NOW is also what caused the company to turn its back on ethics and promote the current behaviour (deceit and coverup). It's easy to have great ethics when you're ripping out new products and are wall Street's darling. When you finally become a "big boy" with all the associated expectations of the investment community, and feel the pressure they can bring to bear when earnings and products fail, that's when you see what the company is really made of. That's when MRK fell down.
The 90's though-- that was an attack on the entire Pharma industry, the recent falls are more specific to MRK as a company.
When I say I like Kim, I'm talking about the management style. Sometimes he actually says something!
At Merck, they have confused loyalty for good leadership. Nothing is valued more than spouting the corporate nonsense and not rocking the boat. Every company is like that to some extent, but at Merck this is now confused with being an actual leader.
The only reason for this, is that the leaders need complete and utter loyalty before they allow someone to get to the top, because they have a lot to hide.
Look at Medco-- tripled after the shackles were taken off by Merck. Who would have thought Medco's stock price would have tripled?
(I did, I kept all the Medco they let me keep in my 401k after the spin off). Mr. Clark, after this roaring success, then promoted to run Merck-- because he had toed the company line at Medco. He couldn't run the company right, but he did what he was told.
Spinning off Medco-- Gosh do you think MRK could use the extra $16B in market cap right now?
Now I believe that Sr. Leadership is very afraid and circling the wagons.
This morning's action was almost certainly a purchase by MRK in reaction to the WSJ story-- as the day went on, the stock drifted down. They were in reactionary mode, and they have a ton of cash.
It's a shame-- they are squandering it all on share repurchase. If they paid it out as a dividend, we could all fare well, instead of pissing it down the toilet.
But, MRK is at the point where anyone who wishes could buy a controlling share-- even you and I!!
The company has a 60B market cap, and well over $20B in short term funds, and cash. Only $30B would get you a controlling share. Just sell off some assets, take the cash, and walk away. But no one wants the liability.
I don't know about Kim leading research-- I think it's all too early to say. And, he's not doing it, he can only create an environment where it can flourish. I was just commenting on his (more) straight shooter management style, which is a rarity in the say no evil see no evil walls of Whitehouse.
I still think there's a chance for the company-- I think the level below the elites included some of the greatest minds I've ever worked with. Maybe they will be able to overcome a lot of the baggage. But, in the short term there are big problems.
I'll be interested to follow the proceedings after Mr. Clark's "trial year" is over.....
WSJ article is on Page A17. It talks about a previously undisclosed internal Merck document that indicates they were aware that Vioxx users were at risk of heart complications as early as a few weeks after initiating use of the drug, not the 18 month lag period that Mrk previously maintained. This document, according to the article, will be a key piece of evidence in the New Jersey trial scheduled to start in September. I don't think investors have been spooked by this article. >>>
Well it seems that news never 'spooked' Ray Gilmartin enough to stop his own wife from taking the drug. What a killer. What a horrible company. This whole case is just another media beat-up where the favoured audience are a bunch of shameless ambulance-chasers looking for another USG or MO handout.
Going back to the subject heading, I did NOT get to read it and no one has yet to post the WSJ article. I predict it is ANOTHER retrospective analysis...which is usually as BIASED as its authors...however positive/negative it may be.
Bad news? Apparently the investing public doesn't think so! 1.5 mil shares in the first hour and we are up 30 cents. Must be the folks are fed up with the media and their take on things even if the "media" is the WSJ. Reporters are nothing more than hacks who in this case,ie, covering the Vioxx trial look for a "story" rather than present the real facts which they have no understanding of. Caution!!!! Do not try to draw conclusions about the fate of Merck by reading reports of the trial in the paper.
You also have to be careful about drawing conclusions about the "public's reaction" over 1/2 hour of trading.
As we've gone over here, Merck is responsible (at these levels) for purchasing about 5% of the total shares in MRK traded every year. It's astonishing but true.
It's one of the main reasons MRK's earnings have held up so well-- reducing the number of shares.
If you don't think MRK can (and does routinely) easily purchase 1M shares into a bad news day, you're a little naive.
The paper losses MRK has taken on its own stock it has repurchased are absolutely stunning during the last 5 years, but luckily they don't have to be reported.
Anyway, despite my tone, I'm actually looking to purchase here, because of the huge levels of cash MRK generates. It's just a question of when, and I don't think that time has come just yet.
I do believe current management is guilty of a massive VIOXX coverup. But at the right price, I'll buy anyway, and do very well.