Merck’s Major Spinoff Announced
The company Merck, New Jersey, known as MSD outside Canada and the U.S., has planned to spin-off its Biosimilars, Legacy Brands and Women’s Health businesses. On Wednesday, this U.S. drugmaker announced to spin off its products from women’s health, legacy products, and biosimilar drugs into a new publicly-traded company. To handle these products, the company is planning to launch a new, publicly-traded and independent company. As of now, there is no announcement regarding the name of the new company.
The chairman, and chief executive officer of Merck, Kenneth C. Frazier said, “The focus of our resources and efforts have been shifted to our best opportunities for our growth, over the past several years.”
He added, “Exceptional results have been achieved by this. We strongly believe that we can benefit from even greater focus given the opportunities in front of us now. Additional resources and focus will help us make sure that our expansive portfolio will reach their full potential at the same time.”
Merck said that its cancer drugs, including cancer therapy Keytruda, animal health businesses, hospitals, and vaccines will be retained.
The higher sales for Keytruda helped Merck to get a 29% higher fourth-quarter profit
of $2.36 billion, reported by the company.The spinoff resulting in two different independent growth companies is the argument. It is expected for the companies to have better financial profiles for unique and compelling investment cases, optimized capital structures and resource allocation, simplified operating models, more flexibility to respond to customer needs and the market, and improved strategic and operational focus.
The number of Merck’s Human Health products would be decreased by about 50% and its Human Health manufacturing footprint will be decreased by 25%.
The new company will lead with its Nexplanon (etonogestrel implant) franchise and its contraceptive and fertility businesses on the Women’s Health front.
Merck’s Major Spinoff Announced Sources
