Merck CEO says M&A focus ‘tends to be more’ in small and midsized deals

Merck CEO Robert Davis was asked during the Goldman Sachs Healthcare C-Suite Unscripted Conference about the possibility of doing a deal of size “beyond the kind of tuck-in single digits to $10 billion, $12 billion” and what the appetite and opportunity there would be. In reply, Davis stated in part, according to a transcript: “Well, I would start by saying our focus continues to be looking for interesting assets where we see a true scientific difference. And for us, that tends to be more in those small and midsized deals. So clearly, our focus is not on a large transformative deal of any kind. I don’t think we need it. And frankly, it would be a distraction at this point to our labs and to the progress we’ve made. We are very interested in continuing to do deals like the deals you’ve seen us do… So you’ll probably — that 10 — 0 to 10 to 15 is more of the range. I will tell you that you are seeing for late Phase II, early Phase III opportunities where there’s transformative assets with good clinical data, the prices have gone up. And that’s why I think you are going to see that is a little bit more. But it’s in that range we’re looking at. We’re not foreclosing the opportunity. But if we ever looked at something bigger, it would be because the science took us there and we saw something that we thought would be a sustainable long-term growth driver, not because we were trying to fill a void in the near term. That’s not our strategy. And clearly, we would not pursue any form of cost-driven M&A or transformative deals. I don’t think we need to. Our strength is in executing what we have in hand and then adding to it selectively around the portfolio we have today.”