Twitter lit up Friday after one of Derek Lowe's posts on his In the Pipeline blog elicited an anonymous but very specific comment on changes being made in Merck's R&D operations now that Roger Perlmutter has taken over the research division. The first to fall are some key franchise heads in R&D management as Perlmutter looks to simplify things inside the corporate bureaucracy. And a spokesperson for Merck ($MRK) confirmed to FierceBiotech that a shakeup is under way--even though details are still sparse.
"At this stage I cannot provide details on any individuals that may or may not be affected by these changes," says Ian McConnell in an emailed response to FierceBiotech. "I can confirm that some members of management, but not all Franchise leadership, are leaving the company but are working to ensure a smooth transition."
Later in the day, the Wall Street Journal reported that Perlmutter spelled out some of the changes in an internal memo. The franchise heads were being replaced by senior leaders, he stated, who will be in charge of various phases of R&D, like early-stage research work.
"Virtually everyone has expressed frustration with our system of governance and the complexity of our organizational design," Dr. Perlmutter wrote in the memo, according to the Journal. Perlmutter said he regretted that the changes "resulted in the elimination of several senior positions," adding that they take effect immediately.
"This is part of Merck's existing strategy and ongoing commitment to streamline our operating model and aggressively manage our cost structure," McConnell added to FierceBiotech. "By doing so, we will ensure that we are able to bring our medicines and vaccines to those who need them today, while enabling us to deliver long-term value to our patients and shareholders. MRL's organizational structure has been altered to simplify governance so that Merck can advance therapeutic and vaccine candidates more efficiently and focus resources on its most promising programs. The new design has been established to ensure that MRL leaders have the authority to take appropriate actions to facilitate rapid pipeline progress."
Merck spends a bit more than $8 billion a year in R&D, but has had only a weak late-stage pipeline to show for it over the last few years that Peter Kim ran the division. Perlmutter, the former R&D chief at Amgen ($AMGN), was widely expected to change all that as soon as possible.
The anonymous tipster at In the Pipeline says that Rupert Vessey will lead Discovery and Early Development, along with a number of other executive changes.
Special Report: Merck - The Biggest R&D Spenders In Biopharma - 2012