Pharma giant Merck & Co., Inc. (NYSE: MRK) announced Wednesdaythat it plans to splinter into two companies in a bid to pursue aggressive growth.
Separately, the company reported largely positive fourth-quarter results and issued robust guidance for the full year 2020.
A ‘Lean And Mean' Growth Mantra
Merck said it plans to spin-off products from its women's health care, legacy brands and biosimilars businesses into a new, independent publicly traded company.
The company said it plans to focus on its strong growth businesses – oncology, vaccines, hospital and animal health.
Merck also reaffirmed its commitment to invest in R&D to pursue breakthrough innovations and drive value from its deep late-stage pipeline.
Merck said it expects the spin-off to deliver significant benefits for both the legacy Merck and the NewCo and to create value for shareholders.
The NewCo is expected to be headquartered in New Jersey and will have 10,000 to 11,000 employees, Merck said. It will generate about $6.5 billion in revenue for Merck in 2020, the company said.
“Over the past several years, we have purposefully shifted the focus of our efforts and resources to our best opportunities for growth,” Kenneth Frazier, Merck's chairman and CEO, said in a statement.
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