Does Merck exit signal a shake-up?

In a surprise departure, Merck vaccines chief Margaret McGlynn (photo) has announced her retirement. Though McGlynn had been eclipsed by EVP Kenneth Frazier in recent years, she was once considered a top candidate to succeed CEO Richard Clark (photo). Her sayonara could indicate a major revamping of top management in the wake of the merger with Schering-Plough, analysts said.

"Our understanding is that over the coming weeks there could be a significant shake-up in the most senior ranks of the company, some of which could come as a surprise to investors," Sanford C. Bernstein analyst Tim Anderson wrote in a research note, calling McGlynn's exit "unexpected." Anderson also speculates that Schering types will have to be given key roles to bear out the deal's "reverse merger" structure--and thus avoid triggering the change-in-control provisions that could affect the Schering-Johnson & Johnson partnership on Remicade.

In any case, McGlynn won't be a part of it. "She has professional and personal aspirations she'd like to pursue," Merck spokeswoman Amy Rose told Reuters, when asked about the reasons for McGlynn's departure. Rose told the Wall Street Journal that McGlynn wasn't asked to leave. And she said that Merck will announce its new executive team for the combined company as the merger nears closure. No indications whether the new management ranks will include "surprise" appointments; Rose said the company doesn't comment on analyst notes.

- read the blog post at BusinessWeek
- see the WSJ story
- get Mike Huckman's take at CNBC

ALSO: Merck anticipates paying $80 million to settle litigation in which drug-benefit plans sought to recover their costs in paying for the former pain drug Vioxx. Report