Merck KGaA Woos Investors Irked by 'Bunker' Culture, Dearth of New Drugs - (Bloomberg via NewsPoints Desk)

  • Bloomberg reported Thursday that Merck KGaA's incoming CFO Matthias Zachert may look to repair the company's relationship with investors and analysts as one of his first tasks.
  • Sanford C. Bernstein & Co. analyst Jack Scannell recently noted that the company's "investor relations were strange," adding that the "individuals in IR tried to be helpful, but it was as if they were locked in a bunker away from the rest of the business."
  • Cornelia Thomas, an analyst with WestLB AG, noted that "people do get ticked off if the company doesn’t properly communicate," citing an example in February last year at an analysts' meeting where a fall in the company's shares was "at least partly because they weren’t answering questions."
  • Merck has also faced drug setbacks, and according to Odile Rundquist Helvea began to lose credibility in July 2009, when European regulators rejected its cancer drug Erbitux for use in lung cancer, and the drugmaker has also faced the rejection of its multiple sclerosis tablet cladribine in both the US and Europe.
  • Scannell commented that Merck's former head of pharmaceuticals, Elmar Schnee, "would make persistently optimistic noises but not explain the reason for his optimism. And then lo and behold, the FDA or EMA would turn the product down."
  • Beyond communicating better, the company needs to revive its drug business, Scannell said, noting that Merck doesn’t have an experimental medicine close to market with significant sales potential, so the company may need to invest, possibly through another acquisition.

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