MSD said it would concentrate on oncology drugs and vaccines and establish a new company, NewCo, to sell older drugs, products for women’s health, and biosimilars.

Under the spinoff plan, MSD and the new company will focus on their respective portfolios, the company said.

However, MSD Korea could face a dispute with employees because more than 200 workers at the Division of Diversified Brands, Women’s Health, and Biosimilar will have to move to a new company.

MSD Chairman and CEO Kenneth C. Frazier said on Wednesday that he decided to separate products from Legacy Brands, Women’s Health, and Biosimilar Division into NewCo.

By reinforcing each company’s core businesses separately, MSD will meet more needs of patients and clients and achieve higher value for all stakeholders, he said.

“Through the spinoff, MSD will focus on oncology, vaccines, hospital, and animal health for innovative growth. NewCo will become a large company with an initial sales of $6.5 billion, focusing on women’s health,” Frazier said.

The spinoff is to be completed by the first half of 2021, he added.

MSD plans to relocate 10,000-11,000 employees around the world under the new company, according to a report obtained by Korea Biomedical Review. If the company appoints a CEO for NewCo in the first half of this year, MSD is likely to move executives and employees to the new company from the third quarter.

The spinoff might erupt an internal conflict because products from NewCo will not include MSD’s high profit-earning antidiabetic medicines such as dipeptidyl peptidase-4 (DPP-4) inhibitors and sodium-glucose cotransporter-2 (SGLT2) inhibitors.

As MSD will keep selling new and high-value drugs, it will drop older medicines or those with slower growth under NewCo, observers said.

MSD Korea, in particular, has more than 200 sales representatives in the Primary Care Division, who sell chronic disease drugs. The company might put half of them to NewCo, which could prompt a dispute with workers.

MSD’s drugs under the Legacy Brands Division moving to NewCo include painkillers Arcoxia and Diprospan, dermatology drugs Propecia, Diproson, Elocon, cardiovascular drugs Zetia, Vytorin, Atozet, Cozaar/Hyzaar, respiratory medicines Singulair, Dulera, Nasonex, and central nervous system medicines Maxalt and Remeron.

MSD Korea said it would hold a “Grand Communication” meeting for executives and employees on Thursday afternoon.

As all employees are currently working from home due to the risk of the spread of the new coronavirus, the meeting will be a video conference on a Webex site, the company said.