With Merck & Co.’s current chief financial officer, Rob Davis, slated to take over as CEO, the New Jersey pharma has found his replacement in a long-serving employee.
Wednesday, Merck said Caroline Litchfield, currently its treasurer, would become the company’s new CFO on April 1.
The executive transition comes as Merck looks to diversify its business beyond immuno-oncology linchpin Keytruda, and Litchfield will take on some of that responsibility, as business development is part of the job description for Merck’s top financial administrator.
“Caroline’s appointment as our next CFO is the result of a combination of factors—most importantly, Caroline’s financial expertise, remarkable track record, and leadership—as well as our commitment to developing talent and our succession planning for leadership roles,” CEO Ken Frazier said in a statement. Frazier’s scheduled to officially retire from the top job on June 30.
Litchfield has been with the drugmaker since 1990, and she previously led finance for Merck’s human health business from 2014 to 2018.
The first thing on Litchfield’s CFO agenda will be the separation of Organon, which is on track to take Merck’s biosimilars, women’s health and some legacy brands into a separate shop late in the second quarter.
There’s also the ongoing acquisition of autoimmune disease specialist Pandion Therapeutics as part of a $1.85 billion deal that’s expected to close by the end of June.
Frazier has said that the CEO transition isn’t meant “to slow Merck down in any respect.” After a string of M&A deals orchestrated by Davis in the past few years, the company continues to “prefer to look for smaller opportunities where we can find great science earlier in its life,” but it’s not “foreclosed to larger-scale deals,” the incoming CEO said during the company’s fourth-quarter earnings call last month.
One thing that Merck won’t do? A transformative deal driven mainly by cost-cutting opportunities, Davis said.
Although Merck has set a focus on oncology during Frazier’s leadership, the Pandion deal shows that the pharma giant is interested in other areas as well—or, as Davis put it, the company remains “agnostic to therapeutic area.”
Outside the CEO-CFO shuffle, Michael Nally, chief marketing officer for Merck’s human health business, will also leave the company at the end of March. The function of his job will be subsumed by chief commercial officer Frank Clyburn, who will become president of Merck Human Health.
And at the beginning of the year, Roger Perlmutter, M.D., Ph.D., handed the R&D head baton to Dean Li, M.D., Ph.D.
by Angus Liu
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