Merck

Merck

Revenues 2012: $47.267 billion
Revenues 2011: $48.047 billion

Merck CEO Kenneth Frazier

Merck ($MRK) has become the company that every pharma exec hopes not to be--a patent cliff victim, holding a loaded R&D budget that keeps firing blanks. It has some fixes on the menu but will have to suffer through more trials before those can kick in.

Yes, Merck brought home $47 billion in revenues in 2012, but that was off 2%, and 2013 looks much the same. The company was gut-punched by the loss of patent protection for its once-stellar asthma drug Singulair, sales of which fell 67% to $480 million in the fourth quarter and were down 30% for the year to $3.85 billion.  

Meanwhile, Merck's much vaunted $8 billion R&D program has been unable to fill in behind that patent loss. In hopes of doing something about that, CEO Kenneth Frazier is bringing home Roger Perlmutter, who was at Merck before becoming R&D chief at Amgen ($AMGN). Perlmutter left there about a year ago after a corporate reshuffling that pivoted in part on the company's cost of R&D.

Perlmutter has a lot to face at Merck. The company's HDL drug Tredaptive crashed and burned in trials for the FDA and was pulled from the market in Europe. Frazier recently announced that one of Merck's most promising drugs under development, odanacatib for osteoporosis, won't be ready for application submission until next year because it needs further study. But Frazier still holds out hope of winning the R&D lottery. He is is pushing ahead with a massive development program for a drug to boost HDL or "good" cholesterol, even as doubts grow about the prospects for such treatments. 

Frazier has said he wants to avoid any megadeals to pull the company along. Nor is he interested in spinning assets off. He still sees vet drugs and consumer health as part of the mix. Animal health turned in $3.39 billion last year, but the consumer division had a top line of  $1.95 billion and so is "something that we have to consistently look at and evaluate as to how it can be a meaningful contributor." 

For more:
Merck execs struggle with growing uncertainty over late-stage R&D
Merck has to trim outlook as pipeline poops out
Merck's PhIII Tredaptive trial flops as another cholesterol drug flunks out
Merck CEO Frazier: 'The future of the industry is going to be more partnerships'

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