Merck CEO open to big-time M&A

Merck CEO Richard Clark (photo) set tongues wagging yesterday when he told analysts that the company would consider a big M&A deal. "I don't think any CEO in this environment can categorically rule out any transaction," he said, adding that he was looking at the "entire spectrum" of deals.

That's a turnabout for Merck, which traditionally has relied on internal expansion and smaller deals for growth. But these days, consolidation is in the air. Pfizer is buying Wyeth, Roche is still angling for Genentech, Sanofi-Aventis is apparently on the prowl, and industry observers say they're expecting a wave of deals.

Clark's statements came on the heels of Merck's street-beating fourth-quarter report, which nevertheless included a 3 percent decline in sales, yet another reason why he might be open to a big buyout. Another, Clark said, is the chance to make cutbacks: "I you do it the right way, there's a lot of costs that still need to come out of the system." And then there's the dreaded patent cliff that's afflicting all drugmakers; Merck stands to lose 37 percent of its revenues, or $9.6 billion, to patent expirations over the next four years.

- read the Dow Jones story
- check out the article in the Wall Street Journal