Kenneth Frazier, the veteran CEO of Merck & Co. and one of the highest profile executives in the pharmaceutical industry, will step down at the end of June, the company announced Thursday.
His retirement marks a changing of the guard at Merck, which Frazier, 66, has run since 2011. He will hand the reins to company CFO Robert Davis, whom the board of directors unanimously elected to serve as CEO beginning July 1.
"We are making this leadership change secure in the knowledge that Merck has the elements in place for a strong future of scientific innovation and profitable growth," Frazier said on a Thursday conference call.
“During our succession planning process, the board has had an opportunity to witness Rob’s substantial contributions to the company and the leadership team," Les Brun, Merck’s lead independent director, said in a statement. "He is the right person to lead Merck into the future."
Frazier’s shoes “won’t be easy to fill in so many ways, both within Merck, but also including his many principled and valuable contributions to important issues facing society today,” Davis said on Merck's fourth-quarter earnings call Thursday.
Frazier poached Davis from Baxter, where he was president of medical products business, in 2014.
“Rob has been instrumental in helping Merck take the right actions to adapt to the changing healthcare environment while remaining committed to investing in the scientific innovation that we expect will drive our future growth,” Frazier said in a statement.
“This will be a year of great change both for the company and for our industry," Davis said in a statement. "As we work through the pandemic, we will continue to focus on the important work of bringing our medicines and vaccines to those who need them."
In addition to the switch at CEO, Merck's research chief Roger Perlmutter retired last month after seven years as head of the company's laboratories and was replaced by Dean Li.
Under Frazier and Perlmutter, Merck grew steadily despite fierce competition and accelerating industry consolidation that's swelled the size of its peers. Much of the company's recent success is due to Keytruda, an immunotherapy medicine that's been at the forefront of a seismic shift in cancer research and treatment.
Keytruda's development from an overlooked compound in a major pharmaceutical merger to one of the most successful drugs in the industry's history framed Frazier's tenure as Merck CEO.
Unusually for a chief executive in a notoriously risk-averse industry, Frazier also took public stands on divisive cultural and racial issues. In 2017, he resigned from former President Donald Trump's manufacturing council after Trump refused to specifically denounce the White supremacists and neo-Nazis whose protests in Charolottesville, Virginia, led to the death of one woman and injury of more than a dozen.
"As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism," Frazier said in a statement on his resignation.
More recently, following the killing of George Floyd by police officers in Minneapolis, Frazier, one of just four Black CEOs in the Fortune 500, has spoken out about racism in America and the role of a corporation in advocating for racial justice.
In 2018, Merck canceled a policy that would have forced Frazier to retire at age 65, allowing him to stay on for longer.
"Given Merck's current position of strength, the Merck board and I believe it's a good time to begin transitioning the company's day-to-day decision making" to Davis, Frazier said Thursday.