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Last Updated: Thursday, 5 May, 2005, 15:27 GMT 16:27 UK
Struggling Merck names new boss
Vioxx was Merck's second-selling drug with 2003 sales of $2.5bn
Troubled US drug-maker Merck & Co has said that Raymond Gilmartin is to stand down as chief executive and chairman.

Merck has suffered profit-falls since withdrawing its Vioxx painkiller from sale after evidence that it raised the risk of heart attacks and strokes.

Merck promoted Richard Clark, who heads its manufacturing operations, to be the new CEO; the chairman's seat is to remain empty for two years.

Drug regulators in the US and Europe have since approved Vioxx for sale.

Mr Gilmartin's departure is being seen as an attempt to draw a line under the crisis, which began when Merck voluntarily halted sales of Vioxx in September 2004.

'Best insider'

The US Food and Drug Administration and European Medicines Agency both separately concluded that Cox-2 inhibitors - like Vioxx - posed a risk of heart disease.

You have to think they couldn't get a superstar CEO from outside the company. Nobody would take the job
Scott Henry, Oppenheimer analyst

They warned doctors to be cautious about prescribing this type of drug but came down in favour of preserving a choice of treatments.

Merck's share price and profits were hard-hit when it pulled its second-best selling drug off the shelves. Vioxx sales were worth $2.5bn (1.3bn) in 2003.

Pharmaceutical industry analysts gave Mr Clark's appointment a lukewarm reception, viewing him as the best internal candidate.

"I think highly of Clark...he's basically a consolation prize because Wall Street wanted new blood and he's a Merck insider," said Barbara Ryan, an analyst at Deutsche Bank.

"You have to think they couldn't get a superstar CEO from outside the company. Nobody would take the job," said Oppenheimer analyst Scott Henry.

Mr Gilmartin has run Merck for 10 years and will continue to serve as a special advisor until he retires in 2006.

Rather than appoint a new chairman, Merck has decided to form an executive committee under its ex-chairman Lawrence Bossidy. Its shares rose in New York on news of the shake-up.

Merck's profits for the final three months of 2004 fell to $1.1bn, down $300m on the same period a year earlier. First quarter 2005 profits were $1.3bn, down 15% on a year ago.

Other Cox-2 inhibitors reviewed, and approved, by the US FDA after doubts about Vioxx included Pfizer's Celebrex and Bextra products.

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