Merck staking future on biotech

Drug maker Merck & Co. said Tuesday that it was taking steps to become a leader in generic biotechnology drugs and sales in emerging markets.

During its annual business briefing, Merck tried to reassure investors it had the right strategy to resume growing -- after recently announcing another major restructuring and forecasting lower profit and flat revenue in 2009 because of generic competition, the recession and other problems.

“Merck has been through tough times before and has rebounded in ways that few other companies have,” Chief Executive Richard T. Clark told analysts, probably referring to the fallout over the withdrawn painkiller Vioxx.

The maker of respiratory drug Singulair and cholesterol drugs Vytorin and Zetia, which have been dogged by efficacy and safety questions, plans to seek U.S. approval for three new drugs next year, has seven more in late-stage testing and will start late-stage tests on six others in 2009.

Merck is launching a division called Merck BioVentures to make both new and follow-on, or generic, biotech drugs, management told analysts gathered at its headquarters..

The unit will use new science to speed drug development, including glycoengineering, which allows for rapid production of antibodies and other proteins for drugs in yeast, rather than in cells from mammals that other companies use.

Peter Kim, president of Merck Research Laboratories, said the unit would invest $1.5 billion in research by 2015, build a commercial factory by 2012 and aim to launch six or more generic biotech products from 2012 through 2017, a period when some major biotech drugs lose patent protection.

Also, Merck said it was on track to hit its goal of $2 billion in sales from emerging markets including Brazil and India, where Merck marketing chief Kenneth Frazier said the company’s vaccines as well as its diabetes and HIV drugs matched up with major health problems.

Merck shares fell 66 cents, or 2.4%, to $26.34.