CEO says Merck "getting swagger back"

By Ransdell Pierson

NEW YORK (Reuters) - Merck & Co.'s (MRK.N: Quote, Profile, Research, Stock Buzz) chief executive officer said on Wednesday the company's fortunes are rapidly improving, as new drugs and improved operations begin to overshadow its ongoing court battles with former Vioxx users.

"I think we're getting some of our swagger back as a company," Richard Clark said at the Reuters Health Summit, noting that the company's shares have rebounded almost to where they were before arthritis treatment Vioxx was withdrawn in September 2004 on safety concerns.

Aggressive cost-cutting, tightened quality controls throughout the company and acquisitions of promising new drugs and drug technology are putting the company back on track, Clark said.

He said one of the most promising developments at Merck is its planned $1.1 billion purchase of Sirna Therapeutics Inc. RNAI.O, predicting its technology for blocking genes from making bad proteins could revolutionize drug development.

"This is a breakthrough," he said of RNA interference technology employed by Sirna, predicting some day it could help make Merck "a very powerful biotech company. It could be the future of our industry ... I've never seen our scientists more excited."

Clark was deemed by many to be merely a caretaker CEO when he took charge of Merck in May 2005, at a time when the company's sales and profits were reeling from the loss of Vioxx, which had boasted annual revenue of $2.5 billion.

Making matters worse, analysts speculated Merck would be critically wounded for years by costly court battles with thousands of former Vioxx users and eventually have to pay them billions of dollars.

Clark said Wall Street is rethinking its earlier skepticism, now that Merck has won a number of Vioxx court battles, beat earnings forecasts in recent quarters, and achieved its twin goals of climbing back to a pre-Vioxx share price and a market capitalization of $100 billion.  Continued...