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Merck CEO Kenneth Frazier to retire at the end of June

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Merck CEO Kenneth Frazier to retire at the end of June

Kenneth Frazier, one of only a handful of black executives leading major US companies, will step down as chief executive officer at the end of June and be replaced by Chief Financial Officer Robert Davis, Merck said on Thursday.

Frazier, 66, will not be handing over the reins completely, at least for now. He will remain with the drugmaker as executive chairman for a transition period.

Frazier was one of only five black CEOs in last year’s Fortune 500 list, released in June 2020. That number has dropped even lower since then, as TIAA CEO Roger Ferguson, Jr. will retire in March.

However, joining the ranks, Roz Brewer, who was previously Starbucks’ chief operating officer, is set to become CEO of Walgreens in March.

The dearth of black CEOs at top American companies comes as corporate boards are being pressured to focus on improve their diversity, particularly among their companies’ leadership.

He was set to retire in 2019, but the company scrapped a policy requiring its CEO to retire at the age of 65.

Davis will inherit a company with one of the world’s best selling drugs in its cancer immunotherapy Keytruda and a tightened focus after it completes the spinoff of its slower growing women’s health, biosimilar drugs and older products later this year.

Frazier joined Merck nearly 30 years ago and climbed the ranks, becoming CEO of the Fortune 500 company in 2011. He made his name at Merck as general counsel by steering the company safely through daunting litigation over Vioxx. He also played a significant role in Merck’s 2009 acquisition of NJ drugmaker Schering-Plough, which then held Keytruda, or pembrolizumab, as a pipeline asset.

“That deal was done at a time where, frankly, we saw an opportunity in the market based on where the valuations of companies were,” he said. “None of us were really smart enough to know that among the assets we were acquiring was pembrolizumab.”

Under Frazier’s leadership, Keytruda has eclipsed Bristol Myers Squibb’s cancer immunotherapies, which hit the market first. Keytruda’s sales topped $14 billion last year.

Shares of the company more than doubled over his tenure.

Frazier, the grandson of a sharecropper, made headlines in 2017 when he became the first business leader to leave former President Donald Trump’s manufacturing council following Trump’s comments on a white nationalist rally held in Charlottesville, Virginia. He also spoke out last year after the killing of George Floyd by a white police officer, saying that he felt Floyd “could be me.”

“His shoes won’t be easy to fill in so many ways, both within Merck but also including his many principled and valuable contributions to important issues facing society today,” Davis said on a post-earnings conference call.

Frazier’s transition follows the recent retirement of Roger Perlmutter, who ran the company’s research and development division for much of Frazier’s tenure and was also considered a major force behind the success of Keytruda. Dean Li took over for Perlmutter on Jan. 1.

Davis has been CFO since 2014 and in charge of the company’s business development, real estate and other corporate strategic functions since 2016.

A career healthcare executive, he was the president of Baxter International’s medical products business before joining Merck, and also spent 14 years at Eli Lilly.

Citi analyst Andrew Baum said the elevation of Davis suggests the company will work to reduce its dependency on Keytruda.

Merck also reported fourth-quarter earnings of $1.32 per share that missed analysts’ estimates of $1.38 per share on lower-than-expected sales of diabetes drugs Januvia and Janumet.

It forecast a better-than-expected profit in 2021, although it said the COVID-19 pandemic would hurt sales of certain drugs, especially vaccines.

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El Salvador volcanoes to power bitcoin mining

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El Salvador volcanoes to power bitcoin mining

Bitcoin is red-hot in El Salvador — and the country says it plans to use power from its volcanoes to mine it.

El Salvador President Nayib Bukele — just hours after the country’s legislature approved the “Bitcoin Law,” making it the first to accept Bitcoin as legal tender — revealed Wednesday that the nation’s state-owned geothermal electric company will harness volcanic energy to mine the cryptocurrency.

Bukele said the country is already designing a mining hub that will use “very cheap, 100% clean, 100% renewable” energy from volcanoes to power the operation, which effectively would be a bank of super-powered computers that solve the complex mathematical equations required to mine Bitcoin.

“Our engineers just informed me that they dug a new well,” Bukele tweeted, saying it would generate 95 megawatts of energy — enough to power more than 500 homes for a year. “What you see coming out of the well is pure water vapor.”

Bukele — who is looking to lower transaction fees on the $6 billion in yearly remittances sent to its citizens from abroad — has yet, however, to reveal when the new operation will be live or how many Bitcoins he expects to be able to mine.

It’s been a bullish week for Bitcoin in El Salvador. The digital coin can now be used as payment for goods, services, and taxes in the public and private sector. Bitcoin rose 6 percent on the news, according to data from Coindesk.

According to a study by Cambridge University, Bitcoin mining consumes more energy per year than the Philippines. Elon Musk has met with Bitcoin miners about environmental concerns, recently citing them as he announced Tesla would no longer accept Bitcoin as payment.

Details about the mining efforts and how El Salvador will widely adopt Bitcoin remain vague. The law states it will provide “the necessary training and mechanisms” to allow the 70 percent of its citizens that don’t have access to traditional banking services to understand how they can use Bitcoin but didn’t elaborate.

Still, Bukele remains an enthusiastic advocate for the currency and his mining project. Late Thursday he tweeted drone footage of the new mine with a rainbow in the background.

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China arrests 1,100 crypto users on money laundering charges

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China arrests 1,100 crypto users on money laundering charges

China’s crackdown on cryptocurrencies is heating up with a series of arrests that suggest digital currency users can be traced.

More than 1,100 people who allegedly used cryptocurrencies to launder profits from frauds were arrested Wednesday, the country’s Ministry of Public Security said in a statement. 

The busts involved 170 criminal groups who authorities say hired “coin farmers” to open crypto accounts after bank accounts they used for their alleged scams had been seized.

“The high illegal income attracts a large number of people to participate, causing serious social harm,” the ministry said of the alleged plots.

The arrests may cast further doubt on the supposed un-traceability of cryptocurrencies. On Tuesday, the price of bitcoin fell almost 12 percent after it was revealed that US authorities were able to reclaim most of a bitcoin ransom that Colonial Pipeline paid to hacker group DarkSide in May. 

“Criminals have been using bitcoin because of the supposed inability of governments to get at it,” Anthony Denier, CEO of trading platform Webull, told the Post on Tuesday. “If governments can claw it back, that hurts its appeal.” 

Wednesday’s arrests are part of a broader Chinese crackdown on crypto. They come less than a month after the government called for greater regulation of digital currencies.

A committee presided over by a member of China’s Politburo wrote in May that it is necessary to “crack down on bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.” 

Worries about bitcoin’s traceability and the looming threat of government regulations have sent the cryptocurrency plummeting from its peak of more than $63,000 in April. Bitcoin was trading at about $37,600 Thursday morning. 

Additional reporting by Will Feuer

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Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

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Burger King flambes Chic-Fil-A online, donates to LGBTQ foundation

They just served them a double whopper.

Burger King may have lost the restaurant-chain battle, but they’re charging ahead in the sandwich wars: The burger monger flame-broiled queer-rights critic Chick-fil-A in a Pride Month tweet in which they pledged to donate the proceeds from their new chicken sandwich to an LGBTQ charity. The provocative post currently boasts over 7,000 likes online.

Burger King tweeted last week that 40 cents from every one of their new hand-breaded Ch’King sandwiches sold during June will go to the Human Rights Campaign, which is the world’s largest LGBTQ-rights organization, Fox News reported. BK will contribute up to $250,000, according to the tweet.

The patty purveyor doubled down with a shot at Chick-fil-A, writing that the deal is good “even on Sundays,” when the devoutly Christian chicken chain shuts its doors.

The verbal whopper comes after years of opposition to Atlanta-based Chick-fil-A, which contributed millions to organizations that opposed same-sex marriage. In turn, that got the restaurant banned from several airports and schools across the country.

In 2019, Chick-fil-A announced that it would no longer donate to the Salvation Army, the Fellowship of Christian Athletes and other groups that have been criticized for their stances on LGBTQ issues.

BK is surely hoping the charitable act will help give the chain a leg up in the ongoing battle for chicken-sandwich dominance, which Chick-fil-A is currently winning in terms of total sales.

The chicken-driven competition began in 2019, when Popeyes’ new sandwich sold out at many of its stores after just two weeks on the menu. 

Since then, the largest US fast-food chains, from KFC to Wendy’s, have introduced new chicken-laden menus or announced plans to do so.

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