Thursday, January 5, 2012

Merck Chairman Frazier, Live: On Legacy S-P Consumer Health And Animal Health Partnering Opportunities

As predicted, Merck Chairman and CEO Ken Frazier didn't say much that was new on his webcast from Goldman Sachs' offices in Manhattan this morning, as his company is already in the self-imposed "quiet period", leading up to the annual earnings release, early next month.

That is to say -- on a nearly daily basis -- more and more 2011 financial reporting data (presently kept on a country by country, and business by business basis) is being aggregated from around the globe, and loaded into a set of consolidated financial statements, in Whitehouse Station. And so, with each passing day, the risk increases that anything the CEO might say, related to a financial matter might prove to be wrong, as the actual data rolls in, and is rolled up.

So, not much was said (of a "ground-breaking news" nature).

Evan so, toward the end of the webcast, Mr. Frazier did reiterate his support for the legacy Schering-Plough consumer health and animal health businesses, but took pains to mention the differing path Pfizer has taken related to Animal Health. . . and then repeat forcefully that he has a duty to look at partnering and other opportunities -- for consumer health and animal health, "on an ongoing basis," thus:

. . . .I will continue to look at [other opportunities to partner, or unlock value in] the Consumer Health and Animal Health businesses at Merck, given Pfizer's [prior decisions, and announcements]. . . .

Again, not new -- just an amplificaiton of statements last clearly made when the complex series of Merial-Sanofi joint-venture divestiture then re-acquisition deals cratered, primarily on US and EU antitrust concerns. There you have it.


Anonymous said...

I think that the animal health division is very similar to the base business, global, and offers diversification. That area seems to be valuable to new Merck. I don't think the same can be said of consumer division. It would seem to be a target for sale by Frazier.

Condor said...

I think you are right, anon.

For the sake of a truly complete record, I should also note that Jami Rubin, the lead health care analyst at Goldman Sachs, the sponsor of the forum mentioned in my post, above, reiterated Goldman's "Neutral" stance on Merck, after the conference.

So -- MRK reamins fairly valued in Goldman's eyes -- at the $37-$38 level.