Merck & Co. announced Thursday that Kenneth Frazier will retire from the position of CEO effective June 30, to be replaced by the company's current chief financial officer (CFO) Robert Davis. Frazier, who joined Merck in 1992 and became chief executive in 2011, will continue to serve on the drugmaker's board of directors as executive chairman, for a transition period to be determined by the board.
Davis joined Merck as CFO in 2014, having previously served as president of Baxter's medical products business, whilst also working for more than 14 years at Eli Lilly. In 2016, Davis' role at Merck was expanded to include the company's global support functions. The drugmaker noted that Davis will become CEO effective July 1, while he will be appointed president effective April 1, at which time the company's operating divisions will begin reporting to him.
Citi analyst Andrew Baum said the appointment of Davis is a likely indication of increased focus in reducing the dependency on Keytruda. The anti-PD-1 therapy generated sales of just under $4 billion in the fourth quarter of 2020, representing year-on-year growth of 28%, with the figure coming in ahead of analyst estimates of $3.9 billion.
Commenting on the appointment of Davis, Frazier said "he has deep knowledge of our company and industry and has been a valued strategic thought partner to me and the Merck senior management team as well as a highly capable finance leader." Frazier added "I am confident that he has the strategic and leadership skills necessary to ensure that the company remains fully committed to its core mission."
Les Brun, lead independent director, remarked that under Frazier's "leadership, Merck has delivered many innovative lifesaving medicines and vaccines, including Keytruda, Gardasil 9, and Bridion, and also focused on other key growth drivers, such as Lynparza, Lenvima, and animal health to create long-term value." The news of Frazier's retirement comes after Roger Perlmutter stepped down as president of Merck Research Laboratories, to be replaced by Dean Li from the start of 2021.
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