Merck’s Directors Must Work to Protect Long-Term Share Value in Wake of Negative News

(NewsVisual, powered by IntellectSpace) -- In news that could devastate the profit margins for Merck & Co Inc (NYSE:MRK) for years, a panel of cardiologists warned doctors that they should stop prescribing the company’s cholesterol-lowering drugs, Vytorin and Zetia.

Merck jointly markets these two drugs with Schering-Plough Corp (NYSE:SGP).

"Until recently, both Merck and Schering-Plough had staged turnarounds that relied partly on sales and profit growth from Vytorin and Zetia. Now, future growth is in serious doubt," The Wall Street Journal reported on Monday in an online article.

Merck’s Board of Directors now must step up to the plate and be prepared to advise the company’s Senior Executives on finding a path for securing its strategic position in the competitive marketplace.

Given the implications for the company’s long-term stock value, NewsVisual created an IntellectSpace Knowledge Map in order to illustrate the Directors’ business connections and experience to see if they were up to the task of guiding the company’s turnaround.

The Knowledge Map shows several Directors are in a position to offer sophisticated advice.

The most notable among them, however, is Director Thomas H. Glocer who is the CEO of Reuters Group Plc.  Because Reuters specializes in reporting financial news, Director Glocer would have been able to provide keen insights to the markets’ probable interpretations and reactions to negative news, and thus it seems likely that Merck’s Management Team would have weighed Glocer’s advice very heavily.

 
Likewise, Director Thomas E. Shenk, PhD, would have been able to offer expert scientific and business counsel, because Shenk is a Professor and Chairman of the Department of Molecular Biology at Princeton University as well as a Director at two biotech companies, Cell Genesys, Inc and CV Therapeutics, Inc.

To see the details of these connections, click here for an interactive and fuller version of this IntellectSpace Knowledge Map.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

Comments

[Tee - Joyful Digesting]

Interesting map and research.

I think Schering will be MUCH harder it (it already has been) by losing sales of such a key drug. Yes, Merck's sales will be impacted, but they have a nice pipeline. I think yesterday's decline was an extreme overreaction, there was a lot of overselling for sure. Still, it will take time to regain investor confidence.