Kenneth Frazier, the veteran CEO of Merck & Co. and one of the highest profile executives in the pharmaceutical industry, will step down as head of the 130-year-old drugmaker at the end of June, the company announced Thursday.

His departure from the role marks a changing of the guard at Merck, which Frazier, 66, has run since 2011. He will hand the reins to Robert Davis, currently Merck's chief financial officer, who was unanimously elected by the board of directors to serve as CEO beginning July 1.

"We are making this leadership change secure in the knowledge that Merck has the elements in place for a strong future of scientific innovation and profitable growth," Frazier said on a Thursday conference call. Frazier will continue to serve as executive chairman of Merck's board for a unspecificed, transition period. 

In addition to the switch at CEO, Merck's research chief Roger Perlmutter retired last month after seven years as head of the company's laboratories and was replaced by Dean Li. 

Under Frazier and Perlmutter, Merck has grown steadily over the past five years despite fierce competition and accelerating industry consolidation that swelled the size of its peers.

Much of the company's recent success is due to Keytruda, an immunotherapy that's been at the forefront of a seismic shift in cancer research and treatment. The drug, brought into Merck's labs through the 2009 acquisition of Schering-Plough, helped the drugmaker rebound after many of the medicines that drove its business in the 2000s lost patent protection and market share.

Seeing promising results from early studies of the drug, Frazier and Perlmutter poured resources into its development, hastening Merck's shift away from primary care medicines and into oncology. By last year, the company had launched more than 1,000 studies of Keytruda.

Their decision paid off as Keytruda has become a mainstay treatment in lung, skin and a wide range of other cancers. Sales surpassed $14 billion last year, making up nearly a third of the company's roughly $48 billion in revenue. The total for Keytruda is more than double what Bristol Myers Squibb, Merck's long-time rival in cancer immunotherapy, earned in 2020 for its competing drug Opdivo.

The Schering-Plough deal, worth $41 billion, was Merck's last of that size Frazier focused instead on smaller deals for early-stage drug prospects. But none have developed into anything like Keytruda, which was largely overlooked in the takeover of Schering-Plough.

"None of us was really smart enough to know that among the assets we were acquiring was pembrolizumab," Frazier said Thursday, reference to the Keytruda's scientific name.

Keytruda's development from an afterthought in a major pharmaceutical merger to one of the most successful drugs in the industry's history framed Frazier's tenure as Merck CEO. But his leadership carried beyond Merck's walls. He was a vocal defender of pharmaceutical companies and private capital funding of drug development in a period when public outrage over high prices made the industry one of the most loathed in America.

"I see my role as to optimize patient access to medicine and optimize a return on investment, not to maximize either," Frazier said in 2019 at an industry conference.

"I get criticized by people on the left, because I don't maximize the amount of drugs I can get to people. I can't do that and be able to raise money," he added. "And people on the right will say, why are you giving the Ebola vaccine away? I'm not trying to maximize profit."

Unusually for a CEO in a risk-averse industry, Frazier also took public stands on divisive cultural and racial issues. In 2017, he was the first executive to resign from former President Donald Trump's manufacturing council after Trump refused to specifically denounce the White nationalists whose protests in Charlottesville, Virginia, led to the death of one woman and injury of over a dozen more.

"As CEO of Merck and as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism," Frazier, one of just four Black CEOs in the Fortune 500, said in a statement then.

More recently, following the killing of George Floyd by police officers in Minneapolis, Frazier has spoken out about racism in America and the role of a corporation in advocating for racial justice.

Like other sectors, the drug industry is largely led by White men and has struggled to improve representation of women and people of color among managers and top executives. That's true at Merck, too, despite a diverse executive committee.

"We've done a good job on diversity at the top, but we haven't had the pull through at the levels below that I think we need to have," Frazier told Harvard Business School's Tsedal Neeley in a July 2020 interview. "And I take responsibility for that."

Frazier joined Merck in 1992, rising through the ranks as a lawyer to become general counsel seven years later. He led the legal team that defended Merck against lawsuits over the safety of the company's pain drug Vioxx, which was withdrawn from market for causing heart attacks and strokes. Merck eventually settled, agreeing to pay $4.85 billion.

"I think if there's one lesson that I learned from Vioxx is that for a company like Merck you have to stand strong on your heritage," Frazier said in response to a question on Thursday. Merck, he said, needed to communicate "the importance of what we do for the world and the integrity by which we do it."

Frazier served as president of global human health at Merck from 2007 to 2010 before succeeding Richard Clark as CEO.

In 2018, Merck canceled a policy that would have forced Frazier to retire at age 65, allowing him to stay on for longer.

"Given Merck's current position of strength, the Merck board and I believe it's a good time to begin transitioning the company's day-to-day decision making as well as its strategic direction" to Davis, Frazier said Thursday.

Davis' foremost task will be convincing investors Merck can sustain its growth after Keytruda loses market exclusivity at the end of the decade. The company touts several experimental drugs, including a pneumococcal vaccine and an HIV medicine, as particularly promising, but none are viewed as likely to come close to matching Keytruda's commercial success.

"One of the reasons why Rob and Ken and Roger have always talked about [being] therapeutic agnostic," Li said on Thursday, "is because we do not know we have the foresight to know where that next revolution and where that next transformation occurs."

"The whole pharmaceutical field has not seen something equivalent to Keytruda at this point in time throughout the industry," he added.

Editor's note: This story has been updated with additional detail throughout.