Merck Forms $100 Million VC Firm to Boost Online Healthcare

Drug giant Merck & Co. Tuesday formed a $100 million venture fund to
invest in emerging Internet health care firms.

The move will benefit the Internet and healthcare industries overall,
observed Steve Shaha, research director at Gartner Group. “This kind of
investment will enable Merck to execute strategies that better serve its
customers, including patients, practitioners, core delivery organizations,
payers and, potentially, employers.”

By utilizing the Internet, Merck is dually assuring the future of viable
dot-com health firms, Shaha noted.

“The recent turn of events in the stock market has left valid Internet
companies cash poor,” he said. “While some of them may deservedly fail,
others are well-strategized ventures. If appropriately capitalized, these
companies will bring great value to the pharmaceutical and healthcare
equation.

“By concentrating on the World Wide Web, Merck will strengthen its role
as a leader and improve its ability to meet stakeholders’ and the total
organization’s needs and goals. This is a brilliant move,” he added.

The fund, Merck CapitalVentures, will invest in companies focused in
areas of commercialization, distribution and delivery of pharmaceuticals and
related healthcare services, according to Gwendolyn Fisher, manager,
corporate communications for Merck and Co.

“There is a need for this type of investment and it is aligned with our
priorities,” she said. “We will be looking at a broad ranging, all
encompassing spectrum of investment areas.”

Per Lofberg, chairman of the company’s online pharmacy, Merck-Medco, will
head up the new venture as president and has relinquished his Merck-Medco
post. Richard Clark, Merck-Medco’s president for nearly a year, will now run
the unit.

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