“Patients, physicians and payers will continue to demand ever greater value from the drugs we offer,” were the words of Merck & Co chief Raymond Gilmartin earlier this week as he revealed a long-term growth strategy designed to help haul the US giant out of the doldrums following the surprise withdrawal of its multi-billion dollar painkiller Vioxx (rofecoxib) last year [[01/10/04a]].

The move, as expected, was the major reason for a rapid decline in earnings for the first quarter of this year - down 15% to $1.37 billion [[25/04/05a]] – and has triggered Merck to completely restructure “the way it approaches every aspect of its business” from drug discovery through to patient education. It is concentrating greater resources on alliances and licensing, and signed five times as many deals last year compared to 1999 (50 versus 10), with R&D spend doubling during the period to in excess of $4 billion.

This investment has, says Merck, paid dividends - with 20 novel drugs under review in Phase I trials and 18 in Phase II, compared to 14 and seven just over a year ago. The US giant says it expects to file for approval of four out of six Phase III compounds by this time next year. Of particular interest is muraglitizar, the first in a new class of drugs to treat diabetes, which has already been submitted to the US Food and Drug Administration, but it also has four vaccines nearing the market – Proquad for measles, mumps, rubella and chicken pox (under review), Rotateq for the prevention of rotavirus infection (filed in the USA), Gardasil to prevent human papillomavirus infection associated with cervical cancer and genital warts (filing in second half 2005) and Zostavax to prevent shingles (filing later this quarter). And, up and coming next year is the antidiabetic agent MK-431followed by gaboxadol, its treatment for sleep disorders, in late 2006/early 2007.

Mr Gilmartin – who is retiring next year - also provided an update on the company’s cost-cutting programme and revealed that in excess of 5,000 jobs had been culled by the end of last year, which will generate savings of approximately $300 million in 2005. It anticipates a further $300 million will be saved from stock reductions, $600 million from a reduction in capital spending and $1.2 billion from changes to its procurement processes.

- Meanwhile, partner Sanofi-Aventis says it has filed for European approval of Rotateq – to protect children against rotavirus infection – the most common cause of severe diarrhoea in children. In Europe the vaccine will be marketed by Sanofi Pasteur MSD.