Q&A with Barbara Yanni

May 01, 2008
By Pharmaceutical Executive Editors

Merck's stock has been on a downward spiral over the last few months. And it's no wonder: with the constant drumbeat of news and analysis over Vytorin, it's been hard for investors to think about anything else.

But if Merck can come back from Vioxx, it can engineer a comeback from Vytorin. How? Behind the scenes, the company is getting out in front by cherry picking the most promising compounds to pave its way toward future profits. Merck tendered three major late-stage deals last year alone: with NovaCardia for a heart failure drug; with Ariad for an oncology compound; and with Dynavax for a hepatitis B vaccine. What's more, at press time the cholesterol-lowering drug Cordaptive—a could-be blockbuster—was before FDA awaiting approval. That makes Merck's Phase III pipeline one of the strongest in the biz. The company is also locking up blue blood partners in early research, such as the Dana-Farber Cancer Institute, which recently signed a deal with Merck to identify oncology drug targets.

So with the ferocious competition for compounds, how has Merck managed to stand out from the pack? To understand, Barbara Yanni, vice president and chief licensing officer, says you only have to look as far as the company's formula for business development: hire scientists to talk the science and comb the earth for compounds. It sounds expensive and a little chaotic, but the proof that it's working, in this case, is in the pipeline.

Yanni, who is responsible for constructing the terms of licensing deals and partnerships, has been at Merck for more than two decades, after starting in the industry as a tax lawyer. Yanni sat down with Pharm Exec to discuss the company's growing number of deals, and what she feels is Merck's scientific advantage.

You hear often that the old Merck was "internally focused." When did that change?

Merck's Power Pipeline
To some extent, I think it was exaggerated how internally focused Merck was. I mean, 10 or even five years ago, what company would you have said was "externally focused"? Even in the 80s, some of Merck's products were from outside. Prilosec, for example, came from the Astra deal, and Pepcid was from Yamanouchi in Japan.

But I do think Merck's attitude has changed. Dr. Peter Kim [president of Merck Research Laboratories], who came from outside Merck, was a big part of that.

How did Dr. Kim change Merck?

You can see his influence in deals like the one with Sirna. Sirna's business model was to do different deals in different therapeutic areas. We started to talk with them about a license in a particular category. But Dr. Kim's view was that if it worked, it would work in a lot of therapeutic areas. The platform had the potential to really change drug discovery and drug development. And if that could happen, he wanted Merck to be a part of it.

Merck's Alliances: A Decade of Growth
So Dr. Kim had this vision—and he was able to convey that vision to Merck's Board of Directors. He was very articulate, and convinced them to move from just a license to a full acquisition of the company.

lorem ipsum