Merck CEO puts himself in diversification-is-good camp

Pfizer's slimming down by hiving off pieces of the company. Abbott Laboratories is preparing to spin off its pharma business completely. But Merck ($MRK) CEO Ken Frazier is having none of that.

"My philosophy is fix what is broke, don't do the fad of the day," Frazier said in New York today at the Sanford Bernstein conference (as quoted by Bloomberg). "I remember a few years ago when people said it would be the diversified companies that were going to get the premium in the market."

It's a difference in philosophy that's reflected industrywide. Some major drugmakers have sought to combat generic erosion by diversifying their offerings. Companies such as Novartis ($NVS), Sanofi ($SNY) and GlaxoSmithKline ($GSK) have pumped up in consumer health, generics, nutrition, eye care, animal health and more. Others believe in zeroing in on drug development, such as Bristol-Myers Squibb ($BMY), which jettisoned its nutrition business a couple of years ago, and now Pfizer ($PFE) and Abbott ($ABT).

Frazier allies himself with the former group. He says his company's ancillary vet business and consumer drugs unit complement his pharma operations. As Bloomberg reports, Merck's animal health unit brought in $3.3 billion last year and its consumer health business generated $1.8 billion.

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