You could say Merck just didn't want to be tied down. When the company pulled its long-term profit goals last month, CEO Kenneth Frazier (photo) caught a lot of flak from analysts, but he defended the choice by citing pricing pressures in the U.S. and abroad, as well as R&D setbacks. In addition, he didn't want to slash-and-burn costs just to meet those numbers.
But the real key, says CFO Peter Kellogg, is the decision gives Merck a chance to focus on the long run, rather than on short-term numbers. It's not that Merck doesn't want to grow, or that the company doesn't have plans to make that happen, Kellogg promised.
"The most important element is we wanted the freedom and flexibility to invest," Kellogg said at the Citi global healthcare investor conference (as quoted by Reuters). But will that freedom pay off?
- read the Reuters story