Merck (NYSE: MRK) CEO Richard Clark says his
company is looking to do more deals than ever, perhaps "even
try to double" the current rate of 50 per year.
Does that scare you just a little? The company is just
days into its integration of
Schering-Ploughand is already talking about adding
more.
Granted, it sounds like another mega, $41 billion deal is
off the table and any acquisitions or partnerships would be
considerably smaller. Still, I have to question the timing.
It seems to me that it'll take at least some time to
integrate the two pipelines, figure out which projects look
most promising, and scrap the duds. Until Merck does that,
I'm not sure how it can know what potential additions would
be a good fit for its research and development program.
With about $8 billion in cash and investments to spend,
its war chest is
behind
Johnson & Johnson (NYSE: JNJ),
GlaxoSmithKline (NYSE: GSK), and
sanofi-aventis (NYSE: SNY). Perhaps the
rhetoric is nothing more than a scare tactic to try and
increase the prices the competition has to pay while Merck
spends time integrating its own monster acquisition.
Investors should hope so.
Here's my advice for Clark: Slow down. I know you're all
excited to be jumping all the way from the No. 8 spot to the
No. 2 spot on the list of largest pharmas. And I'm sure it
would be great to reclaim the top spot from
Pfizer (NYSE: PFE). But you made the bed. Why
don't you try sleeping in it for a little while before you
start looking for another company to get into bed with?
That's my take. What do you think? Should Merck hit the
ground running, or take a step back? If it is going to buy
something, what would be a good fit? Let us know in the
comments box below.
This article was originally published as
Slow Down There, Merckon
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