Merck spinning-off Women’s Health, Legacy Brands & Biosimilars businesses

Credit: Julia Sudnitskaya

Merck is spinning-off products from its Women’s Health, trusted Legacy Brands and Biosimilars businesses into a new as yet-unnamed company.

According to Merck, the move allows it to enhance its customer and patient focus and achieve faster growth and greater value for all stakeholders.

The publicly traded spinoff – dubbed ‘NewCo’ until a final name is announced – will allow both management teams to drive increased responsiveness to the particular needs of their patients and customers and achieve faster growth through focused and fit-for-purpose operating models.

Merck will continue to benefit from strong growth across its current key pillars of Oncology, Vaccines, Hospital and Animal Health, while remaining fully committed to investing in research and development in pursuit of breakthrough innovations across all areas of science and to driving value from its deep late-stage pipeline.

“Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth,” said Kenneth C. Frazier, Chairman and CEO of Merck.

“This has led to the exceptional results we are reporting today. Given the opportunities now in front of us, we believe we can benefit from even greater focus. At the same time, we believe additional resources and focus will help ensure that our expansive portfolio, including many trusted and medically important products, reach their full potential.

“We have therefore made the decision to separate into two growth companies: Merck and NewCo. By optimising our human health portfolio, Merck can move closer to its aspiration of being the premier research-intensive biopharmaceutical company, while also properly prioritising a set of products at NewCo that are important to public health and the patients who rely on them, and which present real opportunities for growth.”

The spinoff should enable Merck to achieve incremental operating efficiencies in excess of $1.5 billion by 2024, while continuing to increase investment in key growth drivers and pipeline assets.

Merck expects to receive $8 billion to $9 billion through a special tax-free dividend from NewCo.