Raymond Gilmartin announced yesterday that he would immediately step down from his position as chief executive of US drug giant Merck, and would be replaced by Richard Clark – currently president of Merck’s manufacturing division. He will also quit as chairman, but no successor has yet been named.
Mr Gilmartin had been widely expected to remain in his post until his retirement next year, despite pressure from investors to quit in the aftermath of the Vioxx (rofecoxib) withdrawal. Merck was forced to pull its multi-billion dollar painkiller after evidence showed a doubling in the risk of heart attack and stroke amongst patients taking the drug for more than 18 months [[01/10/04a]] and just two weeks ago reported net income down 15% to $1.4 billion [[25/04/05a]]. However, Vioxx was not the only problem as sales of its cholesterol-lowering agent Zocor (simvastatin) are also in sharp decline ahead of its patent loss next year.
Lawrence Bossidy, who headed the panel to find a successor told a conference call that “in no way” was Mr Gilmartin pushed out. He revealed that, having evaluated both internal and external candidates, Mr Clark “has consistently shown that he can lead necessary change at Merck while remaining true to the company’s core values.” And the firm’s new CEO has already had a taste of what’s to come having previously spearheaded an initiative to maximize Merck’s product pipeline and streamline its business processes, which the company says will “add substantially to Merck’s competitive advantage.” Furthermore, he led efforts to trim costs by improving efficiencies, which are expected to result in more than $2 billion in cost reductions through 2008.
Mr Gilmartin, who has served as chairman, president and chief executive officer of Merck since 1994, will serve as special advisor to the Board’s executive committee until March 2006, when he will retire.
- Meanwhile, Merck has reportedly told a government hearing that it is in discussions with the US Food and Drug Administration to return Vioxx to the market.