Merck & Co announced plans on Thursday to cut an additional US$1 billion in costs through 2010 and focus its research on medicines for the most common diseases.
The struggling drugmaker, which has been hammered by mounting lawsuits, falling revenue and profit, and sharply depressed stock as generic competition looms for its top drug, also reaffirmed its earnings forecasts for this year and next.
Merck shares were up US$0.60, or 2 percent, at US$29.80 in midday trading on the New York Stock Exchange.
The new cost cuts, to be achieved through redesigning business operations, were disclosed at Merck's annual business briefing with analysts at its New Jersey headquarters. They follow Merck's Nov. 28 announcement that it will eliminate 7,000 jobs and close or sell eight factories and research facilities to lower expenses by US$3.5 billion to US$4 billion through the decade's end.
Meanwhile, Merck said the number of lawsuits filed over Vioxx, the blockbuster painkiller it withdrew last year because of increased cardiac risks, had risen to 9,200 as of Nov. 30, including 188 potential class action suits. About half the lawsuits are to be heard in federal court, and the other half have been filed in state court in New Jersey.
"I am determined not to allow the litigation process to disrupt our business operations," Richard Clark, chief executive officer, told the analysts. "We have a lot of work to do to make Merck a leader again."
Merck has slipped from being the world's third-biggest pharmaceutical company to No. 5, by revenue, in the last few years, and it expects sales of its top seller, cholesterol fighter Zocor, to drop to about US$2.45 billion next year from about US$4.35 billion this year because of its June patent expiration.
Some other drugs, including popular osteoporosis pill Fosamax, lose patent protection over the next few years.
Clark said he expects revenue growth starting in 2007 and sustained revenue and profit growth beyond 2010.
Despite growing pricing, regulatory and other pressures on Merck, Clark said the company has great opportunities because of a growing number of ill people around the world, inadequate treatments for diseases such as Alzheimer's and cancer, and expanding access to and insurance coverage for medicines in countries such as China and India.
He said Merck will push for market leadership in those emerging markets, trim its cost structure, revamp both marketing and R&D, and focus on nine priority disease areas.
AIR DEFENSE: The Norwegian missile system has proved highly effective in Ukraine in its war against Russia, and the US has recommended it for Taiwan, an expert said The Norwegian Advanced Surface-to-Air Missile Systems (NASAMS) Taiwan ordered from the US would be installed in strategically important positions in Taipei and New Taipei City to guard the region, the Ministry of National Defense said in statement yesterday. The air defense system would be deployed in Taipei’s Songshan District (松山) and New Taipei City’s Tamsui District (淡水), the ministry said, adding that the systems could be delivered as soon as the end of this year. The US Defense Security Cooperation Agency has previously said that three NASAMS would be sold to Taiwan. The weapons are part of the 17th US arms sale to
SERIOUS ALLEGATIONS: The suspects formed spy networks and paramilitary groups to kill government officials during a possible Chinese invasion, prosecutors said Prosecutors have indicted seven retired military officers, members of the Rehabilitation Alliance Party, for allegedly obtaining funds from China, and forming paramilitary groups and assassination squads in Taiwan to collaborate with Chinese troops in a possible war. The suspects contravened the National Security Act (國家安全法) by taking photos and drawing maps of key radar stations, missile installations and the American Institute in Taiwan’s headquarters in Taipei, prosecutors said. They allegedly prepared to collaborate with China during a possible invasion of Taiwan, prosecutors said. Retired military officer Chu Hung-i (屈宏義), 62, a Republic of China Army Academy graduate, went to China
REGIONAL PEACE: The US is supporting Taiwan’s self-defense capabilities by providing the nation with defensive arms and services, as it aims to maintain cross-strait stability The US on Friday reiterated its support for Taiwan’s self-defense capabilities in a statement affirming its commitment to the Indo-Pacific region. The White House said that Washington has supported Taiwan’s self-defense capabilities through a range of security assistance authorities and resources, including the first-ever use of Foreign Military Financing (FMF) and Presidential Drawdown Authority (PDA) for Taiwan, as well as International Military Education and Training (IMET). US President Joe Biden had identified the Indo-Pacific as the critical region for the future of the US and the world, it said. “In pursuit of regional peace, security and stability, we have reinvested in our defense
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
RSS