Merck CEO Gilmartin Resigns

[HenryTo]

Stock up a little bit in before-hours trading this morning:
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Merck CEO Gilmartin resigns, replaced by insider
Thursday May 5, 9:03 am ET


NEW YORK (Reuters) - Merck & Co. Inc., which is struggling to rebound from the withdrawal of its arthritis drug Vioxx, on Thursday said Chief Executive Raymond Gilmartin has resigned and will be replaced by company insider Richard Clark, currently president of the manufacturing division.

Clark previously served as chairman and chief executive officer of Medco Health Solutions Inc.

"I think highly of Clark, but he's basically a consolation prize because Wall Street wanted new blood, and he's a Merck insider," said Deutsche Bank analyst Barbara Ryan.

"While Clark is a much better candidate than other Merck insiders, it's pretty clear he was chosen because the company could not recruit a CEO from the outside," Ryan said.

Merck's shares gave back earlier gains before the bell, rising 23 cents to $35.16 from its Wednesday close of $34.93 on the New York Stock Exchange. The stock was up 2.2 percent before the announcement.

Merck shocked investors and rattled prescription drug users last fall when it withdrew the widely used Vioxx after a study showed it doubled the risk of heart attack and stroke. The news wiped $25 billion from the market capitalization of the Whitehouse Station, New Jersey-based drug company the day the withdrawal was announced.

The move sparked a wave of lawsuits across the United States by users of the medicine, and cast a cloud over a company already struggling with a dearth of new products to replace older medicines facing cheaper generic competition.

[HenryTo]

FYI to all:
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No decision yet on Vioxx comeback, Merck says
Thu May 5, 2005 02:08 PM ET

WASHINGTON, May 5 (Reuters) - Merck & Co. Inc. (MRK.N: Quote, Profile, Research) has not decided yet whether it will try to bring its painkiller Vioxx back on the U.S. market, but is in talks with U.S. regulators, a company official told U.S. lawmakers on Thursday.

"We have not made a decision whether we would do that at this time," Dennis Erb, Merck's vice president for regulatory development, told the House of Representatives Government Reform Committee.

"We are in preliminary discussions with (the) FDA on what information they would like to see," he added.

Erb's comments came as Merck named a new chief executive to replace Raymond Gilmartin. Gilmartin resigned before his scheduled retirement in 2006 in the wake of the company's Vioxx withdrawal and its failure to produce enough new drugs to offset the ones that are losing patent protection.

Merck pulled the popular arthritis drug in September after a study showed it led to a higher risk of heart attacks and strokes.

Erb, who earlier told lawmakers his own father was a Vioxx user until the drug was pulled, said he felt "very positive" about the drug's safety. He did not say when the company would make a decision.

Gilmartin will be replaced immediately by Richard Clark, who is president of Merck's manufacturing division.

Merck's shares were off 46 cents to $34.47 in trading on the New York Stock Exchange.