Ken Frazier to retire as Merck CEO after 10-year run, handing the baton to CFO Robert Davis

The only Black CEO of a Big Pharma company—and one who's spoken out about racial injustice and pandemic promises—is now retiring.

Ken Frazier, who has been Merck & Co.’s chief executive since 2011, will retire June 30, the New Jersey pharma said Thursday. He will continue to serve as executive chairman for a transition period that’s yet to be determined.

Robert Davis, currently Merck’s chief financial officer, will take the reins.

Frazier joined Merck in 1992, and, during his long tenure as the company’s general counsel, he led the litigation around top-selling painkiller Vioxx, now withdrawn for safety reasons. As CEO, he’s credited for churning out enviable growth at Merck with the launches of innovative medicines, most notably PD-1 inhibitor Keytruda.

As the only Black CEO among Big Pharma companies, Frazier has been active in social and political events. His resignation from former President Donald Trump’s manufacturing council after the white supremacist rally in Charlottesville, Virginia, triggered an exodus from that council and earned him and the pharma industry praise across the healthcare industry and among consumers.

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Frazier’s shoes “won’t be easy to fill in so many ways, both within Merck but also including his many principled and valuable contributions to important issues facing society today,” his successor Davis said on the company's fourth-quarter earnings call.

Frazier was only able to stay on as Merck CEO beyond 2019 after the company’s board scrapped a mandatory retirement policy that had drawn the age line at 65. Less than a year after that policy change, word came out that Merck had embarked on a search for Frazier’s replacement. At the time, Davis, as well as Chief Commercial Officer Frank Clyburn and Chief Marketing Officer Michael Nally, were listed as possible successors.

Frazier poached Davis from Baxter—where he was president of that company's medical products business—in 2014.

“Rob has been instrumental in helping Merck take the right actions to adapt to the changing healthcare environment while remaining committed to investing in the scientific innovation that we expect will drive our future growth,” Frazier said in a statement.  

Business development has been part of Davis’ CFO job description since a role expansion in 2016. In the past few years, as Merck faces increased investor pressure to ensure growth beyond Keytruda, the company has made several acquisitions. These include the $1.1 billion Peloton Therapeutics buy, the $2.7 billion purchase of ArQule and the $773 million Tilos Therapeutics takeover in 2019, all of which are focused on cancer.

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Last year, the company snared COVID-19 candidate CD24Fc through a $425 million acquisition of OncoImmune. It bought vaccine maker Themis to accelerate the development of SARS-CoV-2 vaccine candidates, only to ditch the programs a few days ago after seeing lackluster immune response in phase 1 trial. Through a $2.75 billion deal for VelosBio, the company got an anti-ROR-1 antibody-drug conjugate.

Apparently, those moves impressed Merck’s board. “During our succession planning process the board has had an opportunity to witness Rob’s substantial contributions to the company and the leadership team. He is the right person to lead Merck into the future,” Les Brun, Merck’s lead independent director, said in a statement.

Meanwhile, investors wanted to know whether the leadership shift might slow Merck’s deal-making roll. The short answer is no. “The purpose behind this CEO transition is not to slow Merck down in any respect,” Frazier said on the call. “I wouldn’t read into the transition that there would be any hesitation at all about taking steps that we believe are the right steps for this company’s long-term success.”

Editor's Note: This story has been updated with additional comments from Ken Frazier and Robert Davis on Merck's Q4 earnings call.