Merck now second-biggest pharma firm

Merck jumps to second-biggest

Merck has announced that it has now become the world's second-biggest drugmaker overnight, thanks to the full absorption of its former neighboring rival Schering-Plough Corporation. The acquisition was valued at $41.1 billion.

With the deal completed, reports say that Merck has now "leapfrogged" from the eighth biggest company in the pharmaceutical industry to the second. In morning trading, as a direct result of the completed merger, Merck shares rose 81 cents, or 2.6 percent, to $31.48.

Taking the lead

Pfizer may remain number one in the industry, but the boost for Merck is a signficant one. That's because Merck had been the top-selling drugmaker in the mid-1990s before New York-based Pfizer took its place when it too saw overnight success, after the launch of impotence pill Viagra in 1998.

Over the intervening years, further mergers between a number of other drugmakers then pushed Merck further down the line, but with the completion of the Schering-Plough acquisition, Merck is now back in the running.

Sales

Bolstered by the buyout, the "new" Merck will start off with roughly $40 billion in annual sales. This significant amount will see more than half these sales come from foreign countries, which analysts are touting as a significant advantage to the firm, given that US sales have stagnated in recent years.

In addition, the absorption of Schering-Plough will provide the new company with a strong pipeline of experimental drugs and some big sellers, including hepatitis drugs and allergy spray Nasonex.

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