| CFO PROFILES |
September 2007 |
FAREWELL, JUDY LEWENT
By Kate Plourd
Merck’s newly appointed CFO Peter Kellogg has big shoes to fill. This month, the former Biogen Idec CFO replaces legendary CFO Judy C Lewent, who is retiring from the US$23 bn (in revenue) pharmaceuticals company after 27 years.
In the US, Lewent was as close to a finance celebrity as one can get. One of the first female CFOs of a Fortune 500 company, she had a hand in Merck’s most successful strategic alliances and was one of the industry’s risk management pioneers. Drug development is a notoriously dicey business – not only does it take 10 years for the average drug to reach market, but of those that do, only 30% return the company’s cost of capital. In the early 1980s, Lewent figured out how to give planners a clearer picture of the future. She looked at all the products in the pipeline and listed the major variables that could determine the success or failure of each, ranging from scientific factors to manufacturing costs and inflation rates. Using Monte Carlo simulations, she and her team derived forecasts for revenues, cash flow, ROI, and NPV.
While her analytical prowess couldn’t prevent Merck’s 2004 Vioxx debacle, when the company’s top-selling pain drug was recalled, Lewent helped pull the company through. In fact, Merck’s stock is up 25% from last year, and the company anticipates long-term revenue growth of 4 to 6% through 2010. But the Vioxx episode left an indelible mark: it dampened Lewent’s chances of ever becoming Merck’s CEO.
Despite the solid financials Lewent is bequeathing, Kellogg will have his work cut out for him. Merck faces competition from generic drugs, looming legal costs, and patent expirations of the company’s top-selling drugs. And Kellogg will have to draw on much more than the affable personality that he is known for, say analysts. “If they lose patent protection on those [top drugs], he may have to navigate through a difficult transition,” says Morningstar analyst Heather Brilliant.  |
CFOs on the Move
Seck Wai Kwong returns to the CFO job at Singapore Exchange. Seck first took that job in 2003, but in 2005 moved out of the position to take on roles with various units of SGX, focused on strategy and business development. Since then, SGX has had two CFOs, Robert van Zwieten, who after less than a year on the job moved to CEO Hsieh Fu Hua's old office as head of special projects, and Linus Koh. Koh joined SGX in 2004 as its head of products and services, and became CFO in November 2006. Van Zwieten left the company June 30, and now Koh is moving as well, making way for Seck to step back into the position ... Joseph Chan is the new CFO at OTCBB-listed China Water & Drinks, a supplier of bottled water in China. Chan's extensive accounting expertise should help the company as it embarks on “an aggressive growth strategy,” according to a company statement ... i-level Media has found someone to replace Ian Sullivan, its acting CFO. Sullivan will take up the role of COO and Don Chen joins the China-based mobile digital media provider as CFO. Chen joins from Communication Central Group, where he was financial controller ... As CFO, Sibashish Sarkar saw the Indian Film Co. (IFC) through its listing on the Alternative Investment Market in London, then left to join BIG Motion Picture, a Mumbai film company. The new CFO at IFC is Manish Thukral. He had been finance controller at Tata-Sky, a joint venture between Tata Group and News Corp ... Hong Kong-listed ASAT is sticking with siblings when it comes to its CFOs. Kei Wah Chua is resigning from the post and joining the board of directors, while his brother, Kei Hong Chua, becomes the new CFO. – Jennifer Lee |
