Merck Creates Separate Cancer Business as Sales Pressure Looms
The company is splitting its pharmaceuticals unit to bolster product launches before its cancer drug Keytruda loses patent protection
- Merck is reorganizing its main pharmaceutical unit into two divisions to prepare for Keytruda’s U.S. patent expiration in 2028.
- A new specialty, pharma and infectious diseases unit will aim for sales growth to offset expected Keytruda declines.
- Brian Foard will lead the specialty, pharma and infectious diseases unit, and Jannie Oosthuizen will run the cancer business.
Merck MRK 0.33%increase; green up pointing triangle is shaking up the leadership of its main pharmaceutical unit as the U.S. drugmaker braces for sales pressure later this decade.
The Rahway, N.J.-based company said Monday it will split its human-health business into two divisions. One will house its cancer drugs, including the blockbuster Keytruda. The immunotherapy accounts for nearly half of total Merck sales but is due to lose U.S. patent protection in 2028, exposing it to lower-cost copycat competition.
The second new division—the specialty, pharma and infectious-diseases business unit—will sell noncancer products, including the HPV vaccine Gardasil, diabetes drug Januvia and newer products such as lung-disease treatment Winrevair.
Merck is counting on this unit to generate big sales growth to offset the expected Keytruda sales decline.
The moves, which were earlier reported by The Wall Street Journal, are the latest by the drugmaker in preparation for a drop in Keytruda sales. To replace the revenue, Merck has been pursuing multibillion-dollar acquisitions of biotechnology companies that promise to furnish new drugs such as Winrevair.
Merck said the reorganization is aimed at ensuring strong product launches across various disease areas as it tries to diversify its product lineup.
The company is planning more than 20 launches of new drugs or new uses for existing drugs in the next several years. They include a new kind of cholesterol pill that Merck hopes will become a big seller.
“We are sharpening our focus on delivering innovative medicines for patients and creating long-term value for our stakeholders,” Chief Executive Robert Davis said.
The company named Brian Foard as president of the new specialty, pharma and infectious-diseases unit, effective March 2. Foard, 52 years old, has been with French drugmaker Sanofi since 2017 and most recently served as head of Sanofi’s specialty-care unit.
In-house executive Jannie Oosthuizen will run the new cancer business plus Merck’s non-U.S. unit, MSD. Oosthuizen, 58, most recently served as president of Merck’s U.S. human-health business.
Oosthuizen and Foard will both report to Davis.
Joseph Romanelli, who has been leading Merck’s international human-health business, plans to retire, a Merck spokesman said. Merck also is moving Chirfi Guindo, 60, who had been Merck’s chief marketing officer of human health, to a new role, executive vice president of strategic access, policy and communications.