Merck & the Media


So, does this mean I'm gonna get scooped by Reuters on Merck stories? I'm just kidding, but that was one of my reactions when I saw the press release this morning from Merck announcing that it's putting the CEO of Reuters, Tom Glocer, on its Board of Directors. The head of a financial data and news company on the Board of a major drug company. Very interesting.

You may recall, Thomson Corp. is merging with Reuters for $18 billion, but Glocer is going to run the combined companies. In the Merck boardroom, he replaces Larry Bossidy, the former CEO of Honeywell, who retired as a Merck Director earlier this year or William G. Bowen, the former President of Princeton University, who stepped down at the same time. It's also worth pointing out that Glocer maintains a pretty candid blog. There are now 11 outsiders on the 12-member Merck Board. Chairman and CEO, Dick Clark, is the only insider.

Separately, we're heading into a busy couple of weeks for big pharma analyst meetings and financial updates. A week from tomorrow, on the morning of December 4, Merck is holding a conference call and webcast to give guidance ahead of the opening bell. Then a week later, on the 11th, it holds an analyst meeting at its New Jersey headquarters. Merck does it that way so it can focus more on its drug development pipeline and less on financials at the in-person event.

Meantime, Bristol-Myers Squibb holds an analyst meeting in New York on December 5 and Eli Lilly hosts one, also in Manhattan, the next day. Ahead of the events, at least a couple of analysts are telling clients in research notes this morning how to position themselves. Most notably, James Kelly at Goldman Sachs is lowering his 2008-2012 earnings per share estimates for Merck, but raising his forecast by a penny for this year to $3.15, which is in line with the consensus. He's basing the call on lower equity income.

Steve Scala at Cowen & Co. says Merck's analyst meeting on the 11th is the "best opportunity to trigger stock. MRK typically does not disappoint...." Scala or someone on his team is long MRK. GS makes a market in MRK and has done and wants to do more investment banking for the company.

Speaking of investment banking, M & A rumors and speculation in big pharma is hot and heavy. Maybe that's why Merck is hooking up with Mr. Glocer. He didn't come up through the Reuters reporting ranks. He's a lawyer who specialized in... M & A.

Questions? Comments?