MSD’s Spin off completes within this year

MSD Headquarters decides to split business for the purpose of management efficiency

Anticancer drugs & vaccines as they are currently, contraceptives & biosimilars are separated

Spreading anxiety over uncertainty in Korean subsidiary employees

Employees of Korean subsidiaries had begun to stir as Merck (US MSD) declares a division of business.

 

Anxiety over future behaviors is heightening as the company announces the launch of an independent corporation to manage women's health-related products, patent expired drugs, and biosimilars within the year.

 

#Decision to split MSD business, Transfer women's health and biosimilar products to a new corporation MSD held a conference call on the 5th and formulated a spin-off plan.

 

The company plans to split the existing pharmaceutical division into two and set up a separate independent corporation (tentatively named NewCo) to focus on women's health-related products, cardiovascular diseases, respiratory and pain products, and biosimilar products.

 

MSD has decided to focus its research and development (R&D) capabilities on remaining drugs, including anticancer drugs, vaccines, specialty products, and animal health.

 

By item, About 90 patent-expired drugs such as ▲Biosimilars distributed by MSD headquarters such as Renflexis, Brenzys and Ontruzant through a contract with Samsung Bioepis ▲Etonogestrel implant Nexplanon franchise, birth control pills, maternity products, etc.

 

▲Hyperlipidemia drug, Zetia, Vytorin, respiratory disease drug Singulair, skin disease drugs, pain medicine, etc.

 

will be transferred to the new corporation.

 

Business split plan announced by MSD (Source: Merck Conference Call)

Ken Frazier, CEO of Merck, said he decided to split the company to build a business model that fits the portfolio and expects both companies to focus on investment and growth in the first half of 2021.

 

The company announced that it will proceed with the process of establishing a new corporation in the coming months.

 

Based on the contraceptive and infertility related products currently owned by MSD, the goal is to foster new corporations as global leaders in women's health.

 

The company also said it would seek opportunities for active partnerships with other pharmaceutical bio companies to maximize the value of cardiovascular and skin diseases, respiratory diseases, pain, and biosimilar products and to increase patient access.

 

MSD plans to split the company within this fourth quarter, reorganization is imminent According to the headquarters policy, reorganization is inevitable even for a Korean corporation with 700 employees.

 

MSD Korea held a town hall meeting for all employees on the 6th afternoon to share information on corporate division and had a Q&A time.

 

According to officials who attended the Town Hall meeting, the management of the Korea MSD on the day set the standard that the employee's affiliation will follow the business unit to which the dedicated product portfolio belongs.

 

Of the four divisions under the MSD of Korea, more than 100 employees from the DB (Diverse Brand) division dealing with respiratory and skin diseases such as Propecia and Singulair and some employees in the PC(Primary Care) with diabetes and cardiovascular diseases are influential.

 

Since the new corporation is a completely independent company, the office will be operated separately after the spin-off.

 

For example, sales marketing staff currently in charge of vaccine products such as Gardasil work at MSD, while sales marketing staff dedicated to DB business products such as Singulare are moved to a new corporation.

 

The distribution criteria for employees who were in charge of both company's products or internal departments other than sales marketing department have not been specified yet.

 

Since the company's affiliation may vary depending on the division's operating model, the company said that it would provide individual guidance on whether or not it belongs to the third quarter.

 

The management of Korea MSD said, “It is expected that it will complete the spin-off within the fourth quarter of this year, regardless of the schedule of the headquarters.

 

It is difficult to predict the number of employees who will be moving to a new corporation, except for clinical departments.

 

Next week's departmental session will provide details”.

 

Korean subsidiary's confusion aggravated, "no ERP implementation plan" by company Sudden decision adds confusion among employees.

 

Employees attending the town hall are said to have asked questions about the succession of consecutive years of service and salary, benefits, and conditions of succession when they move to a new corporation.

 

There is also anxiety that the ERP(Early Retirement Program) may be activated if the service years are not inherited or if the settlement of severance pay in the middle of business split.

 

In this regard, a Korean MSD official said, “the company does not currently plan to settle interim severance pay or implement ERP.

 

Years of service remain the same.

 

Since the establishment of the new corporation, the company has not received any information from the headquarters regarding the sale and merger and acquisition plan”.

 

He stressed, "It is not a cost reduction but a decision for long-term growth, so we plan to actively support the growth and career development of our employees after the division".