Merck CEO Ken Frazier prepares to step down after 29 years, handing the keys to the Keytruda race car to CFO Robert Davis
Merck CEO Ken Frazier has seen a lot in his 29 years at the Kenilworth, NJ-based drugmaker, but it was 2020 that gave him a true public face. Amid a spate of police shootings, Frazier emerged as a leading voice in the argument for racial equality in healthcare and society writ large.
And now, just like that, he’s stepping away from the helm he has held for 10 years — and could be looking at a future as a highly sought-after elder statesman and truth-teller.
Frazier will leave his role as CEO on June 30, stepping over into the executive chairman role in favor of CFO Robert Davis. Davis, a four-year veteran at Merck, comes with a decorated résumé, including time served as CFO at Baxter and 14 years in the ranks at Eli Lilly.
Davis will take control as Merck looks into a future without its two lodestars — Frazier and Roger Perlmutter, the R&D titan responsible in large part for the success of I/O blockbuster Keytruda. Perlmutter has already handed the reins to Dean Li, the current discovery lead at Merck, signaling the pharma giant’s intent to continue the search for the next big Keytruda follow-up. Perlmutter plans to stay on in a non-executive director role through mid-2021.
“We have tremendous confidence in Rob’s ability to continue to foster innovation and to team with Dean Li … to drive scientific excellence into the future,” Merck’s lead independent director Les Brun said in a statement. “We are particularly pleased that Ken will continue as executive chairman in order to work with Rob and Dean to ensure a smooth transition for the company.”
Frazier began work at Merck in 1992 as VP, general counsel and secretary of what was then the Astra Merck group. Following a series of promotions in the 1990s, Frazier jumped to the C-suite in November 2006, taking on the role of executive VP and general counsel. After a brief stint as VP and president of Merck’s global human health branch, Frazier snared the president role in 2010 and quickly ascended to CEO in early 2011, where he has stayed since.
Frazier’s final years at Merck were marked in large part by politics — a role he was not unfamiliar with given his time on the board of lobbyist PhRMA. In 2017, Frazier bailed on President Donald Trump’s manufacturing council after claiming the president hadn’t done enough to condemn white supremacists who gathered at a Charlottesville, VA rally that claimed the life of a young white woman.
“America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy, which run counter to the American ideal that all people are created equal,” Frazier said in a statement at the time. “As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism.”
In 2020, Frazier’s star as a public truth-teller on race — he is the only Black man to lead one of the Big Pharmas — rose even higher after the death of George Floyd at the hands of Minneapolis police in May. Frazier, in a poignant moment, said that Floyd “could be me.”
Jumping on a train of pledges for racial equality at major corporations, Frazier pledged to join a coalition, dubbed OneTen, to hire 1 million black workers within 10 years. He frequently called out the underrepresentation of black workers across healthcare, even at his own company.
In tandem with his public work, Frazier also oversaw the massive success of Keytruda, which has taken the oncology space by storm on the way to $14.4 billion in sales in 2020 — ranking just behind AbbVie’s immunology behemoth Humira. Unlike Humira, however, Keytruda’s war chest is still growing at a rapid clip — 30% on the year — underscoring the I/O drug’s vast success across a wide range of indications.
Keytruda, and particularly Perlmutter’s role in driving success across its pipeline, was a salve for Frazier’s early years at the top of Merck as profits stagnated in the early 2010s. Perlmutter’s arrival in 2013 and subsequent Keytruda success refreshed Merck’s image, but in recent years analysts have worried whether the company has tacked too much of its success to that one therapy.
Li’s assumption to R&D chief could help identify the next big target, and he and Davis will be tasked with answering concerns over Merck’s slim pipeline as well as how to keep Keytruda on a growth clip as it looks to take over Humira’s top spot.