Tuesday, January 11, 2011

Bloomberg Running A "Non-News" Merck Story This Afternoon -- Ignoring A 70% Cut

Earlier today, I wrote that CEO Frazier made no new material disclosures at the JP Morgan conference in San Francisco. I stand by that. However, Bloomberg is running this -- from the conference -- as though it were news: ". . . .Chief Executive Officer Kenneth Frazier said the company reduced its sales force in developed markets by 32 percent in 2010. . . ."

Merck has pointed this out before (November 2010, at page 2). More importantly, if Bloomberg wanted to run a truly eye-popping headline -- it could have reiterated what Mr. Frazier said at Goldman's conference -- in lower Manhattan -- last week (a PDF file of the transcript of that presentation, at page 14):

. . . .So, I would say this about what you just said, Jami. First of all, we have came through a year of what I consider to be the maximum disruption. We've blended the salesforces during the course of this year. We're pleased with the way in which Januvia, Janumet, Isentress, Singulair, Vytorin and Zetia are stabilized.

Again, let's be clear. Part of the merger was to get rid of 70% of the representatives who detailed Vytorin and Zetia. And so to see those drugs continue to start to move forward actually compared to what could happen when you get rid of 70% of the representatives -- and think about the customer disruption that is inherent in that. We're actually pretty confident about going into next year because we have gotten through the period of maximum disruption.

For a significant amount of time this year, our representatives weren't even in the market because they were being crosstrained on a new product. So I guess I would say that I'm very optimistic about this portfolio going forward. I think the organization -- and I have said this to you privately before -- one of the things I pay a lot of attention to is what are the spirit of the salesforce. I think people are really psyched about what they have in front of them and they're excited about the possibilities. . . .

I wonder how that squares with the prior, SEC-filed disclosures (at page 62) about the motivation for the transaction -- ". . . .the fact that Merck’s directors and senior management prior to closing will be members of the board of directors and management of the combined company following completion of the merger, and the enhanced value of the combined company that may be realized through continuity of management and implementation of Merck’s long-range strategic plans. . . ." Now, remember, those were essentially sworn statements by Dick Clark and Fred Hassan.

What -- exactly -- really was the truth, then? You decide.

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