Short article detailing the different personalities and leaders of both Merck and MSD.

1. IMS Observer – Issue 8
IMS HEALTH ASIA PTE LTD 8 Cross Street #21- 01/02/03 Singapore 048424 • E-mail: APACSocialMedia@imshealth.com • Website: www.imshealth.com
○C 2015 IMS Health Incorporated and its affiliates. All rights reserved. Trademarks are registered in the United States and in various other countries
When Worlds Collide
- The Opposing Personalities of Merck
Despite sharing similar brand names, Merck KGaA and Merck & Co. portray vastly different façades to the world.
This article will take a closer look at the respective personalities of CEOs of Merck KGaA, and Merck & Co.
In an interview conducted with a Chinese reporter, the CEO of Merck KGaA,
Karl-Ludwig Kley conveyed a sense of pride in his leadership. With a formidable
look in his eyes to complement his impeccable speaking skills, Kley’s reserved
charisma emanates in the public spotlight.
Kley places great emphasis on profit maximization and sustaining growth for the
family business. When expressing his desire for growth, he claims to be
“shaping a portfolio that will still be viable 30 years from now”. To achieve this,
Kley has pursued an aggressive expansion strategy through acquisitions of
Sigma-Aldrich and Serono.
In contrast, Kenneth Frazier, CEO of Merck & Co., exhibits a more
approachable personality, though he never seems to lack the energy, courage
and shrewdness found in the typical Wall Street executives.
Just as how Frazier and Kley differ in character, so do their business strategies.
In contrast to Kley’s emphasis on stock prices and business acquisitions,
Frazier is more concerned with his company’s research and development
(R&D). In fact, his hope is for Merck & Co. to usher in “the next wave of science”.
With this expansive reach, Frazier ultimately wants patients to achieve “real
access to breakthrough medicines”.
Frazier’s strategy has paid off handsomely for Merck & Co.: Merck & Co. was about three times larger than Merck
KGaA in the fiscal year of 2010.
A closer look at diverging strategies
As a pioneer in liquid-crystal display technology with investments in textile departments, Merck KGaA’s multi-
disciplinary market strategies have prevented it from specializing in medicine manufacturing. With a focus on
maximizing stock value, the company no longer leads the way in medical innovation.
Merck & Co., on the other hand, has fiercely defended its high R&D expenditures despite profit loss and a lack
of revenue sources. Frazier’s determination and faith in laboratory research enabled the company to generate an
investment return of 20% from 1999 to 2004. Such patience and determination in development places Merck &
Co. in the upper echelons of pharmaceutical companies.

2. IMS Observer – Issue 8
IMS HEALTH ASIA PTE LTD 8 Cross Street #21- 01/02/03 Singapore 048424 • E-mail: APACSocialMedia@imshealth.com • Website: www.imshealth.com
○C 2015 IMS Health Incorporated and its affiliates. All rights reserved. Trademarks are registered in the United States and in various other countries
A brief overview of the business activities that exemplify these opposing strategies:
In 2006, Merck KGaA sold its holding stake in Schering1 to Bayer, a company in desperate need of
new business, for €370m.
In comparison, Merck & Co. acquired Schering-Plough2 in 2009, which helped reduce R&D costs and
introduce new products into their expiring patent lines. This was a significant economic boost for
Merck & Co.
In 2010, Merck & Co. nearly quadrupled Merck KGaA’s revenue; it made a respective US$46b
compared to US$12b. However, their total profits were virtually identical, at US$0.86b and US$0.85b
respectively.
1
Schering was a Wedding-based research-centered pharmaceutical company founded in 1851. It merged with Bayer in 2006
to form a subsidiary known as Bayer Schering Pharma AG.
2
Schering Corporation (also known as Schering AG in Europe) merged with Plough in 1971 to form Schering-Plough.
Schering-Plough currently operates as Merck & Co. after the acquisition by the latter company.
Moving Forward: The Converging Crossroad
Despite the clear differences in Merck KGaA and Merck & Co., neither company strays far
from the original shared goal: benefiting those in the healthcare system by providing
affordable medicine. Both companies have recently invested heavily in biopharmaceuticals in
pursuit of this goal. With Merck KGaA’s acquisition of Serono along with Merck & Co.’s
partnership with NGM Pharmaceuticals, it is evident that biopharmaceuticals will be a point
of emphasis for both companies moving forward.
Although the leadership and management of the two companies are quite different, both
companies strive for the same goal. As a result, patients worldwide can only benefit from the
medical progress undergone to reach this target.