All Their Chips On 14 Black

Monday, November 28th 2005

On Merck’s reorganization:

[M]any observers have questioned the industry’s over-reliance on a small number of blockbuster cures to keep the money rolling in. In common with most other drug giants, Merck has seen its earnings fall over the past couple of years as the patents expired on its leading drug and the flow of new medicines from its research-and-development pipeline dried up, highlighting the drawbacks of concentrating too much effort on a limited range of cures.

and

Making cost savings now in anticipation of fewer blockbusters and falling profits in the future is sensible. Making plans for fighting or settling legal cases that could break Merck is a much tougher call. By taking a knife to the company, Mr Clark [Merck CEO] has made his mark. But he may yet be remembered as the man who brought an American giant to its knees.