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Merck’s research strategy
To achieve our long-term goal of top-tier growth, however, Merck must further strengthen its already pre-eminent scientific capabilities. This year, we broke ground on a major new laboratory in Boston – close to both Harvard and the Massachusetts Institute of Technology – which is expected to open in 2004. Where necessary, we are making discrete acquisitions to augment existing abilities or take us into new areas. The 1999 purchase of San Diego-based SIBIA locates us at the center of U.S. neuroscience research. The July acquisition of Rosetta Inpharmatics in Kirkland, Wash., gives us a foothold in the U.S. Northwest, where a great deal of advanced biotechnology research is conducted. Early in 2002, Dennis W. Choi, M.D., Ph.D., joined Merck from Washington University School of Medicine and assumed the newly-created title of executive vice president, neurosciences.
We intend to boost our annual R&D budget to about $2.9 billion for 2002. We will also continue to reach beyond our own corporate boundaries to obtain the knowledge and technology we need to stay on the cutting edge of scientific discovery – which we believe is the only sustainable advantage in the pharmaceutical industry.
Forging external alliances
This external reach is multi-pronged. At its core is the tighter linkage of our research operations around the world into a “virtual” global laboratory reinforced by a mandate given to our senior scientists to foster strong links within their specialties. This approach allows Merck scientists to keep abreast of the latest scientific developments and to suggest acquisitions, licensing arrangements, alliances with relevant universities, joint ventures and even potential candidates for hiring.
Complementing this effort is the steady expansion of our licensing and external partnering effort. We have entered into hundreds of licensing agreements that provide us with everything from access to new drug prospects and disease areas to new techniques for discovering and developing drugs. The majority of these links are forged with U.S. biotech companies and academic institutions, but our reach extends around the world, including agreements with Kyorin in Japan, Cambridge Antibody Technology in the United Kingdom, Crucell in the Netherlands and CSL in Australia.
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To help accelerate our research efforts, we are locating new facilities in major centers of scientific innovation: In October, we broke ground for our 11th major research site, a new drug discovery facility, shown at right, in Boston, Mass. Scheduled to open in 2004, the facility will house some 300 scientists and exemplify the best of cutting-edge science in collaboration with some of the leading worldwide research institutions. Our acquisition of SIBIA Neurosciences in San Diego, Calif., puts Merck near the Salk Institute, the Scripps Research Institute and U.C. San Diego, which has a top neuroscience program. The 2001 purchase of Rosetta Inpharmatics gives Merck immediate access to cutting-edge genomics technology and new research talent as well as greater access to the University of Washington academic community.
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Cancidas – a testament to our breakthrough research strategy: Nine-year-old Chad Wright of Louisville, Ky., says his mother Paula is alive today thanks to Cancidas, Merck’s breakthrough in the treatment of fungal infection caused by Aspergillus. Ms. Wright survived breast cancer at age 29, heart failure at age 33 and underwent a heart transplant at age 39. When she contracted the life-threatening fungal infection last year and conventional therapies didn’t work, her family thought she finally was up against a disease that she couldn’t beat. Enter Merck’s new medicine, Cancidas. Today, Ms. Wright is once again taking care of her mother and young son.
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We also develop agreements with other large pharmaceutical companies when strong business and scientific opportunities are available. One example is the collaboration with our New Jersey neighbor, Schering-Plough. In December we announced the expansion worldwide (excluding Japan) of our cholesterol-management partnership launched in 2000 in the United States. We have filed a request with the U.S. Food and Drug Administration to approve Zetia, a jointly developed anti-cholesterol drug that employs a different mechanism of action than the currently popular statins. (Non-U.S. regulatory approvals will be sought soon afterwards.) Initially, if approved, Zetia will be offered as a stand-alone product, but eventually we expect to market it as a fixed-dose combination with our anti-cholesterol medicine Zocor. The introduction of Zetia will bolster our strong position in the global anti-cholesterol market.
Breakthrough medicines provide Merck with a built-in edge. But even the most innovative medicines and vaccines must be effectively marketed. Our industry has grown ever-more competitive thanks to scientific and technological advances. The wide availability of new medicines creates pressure to help provide greater access to medicines for all who need them. Merck must continually prove to physicians, payers and patients that its products provide superior value for the money. Our medicines must work well, they must be generally well tolerated, and they must be appropriately priced. |
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