There's going to be a change in leadership at Merck (NYSE:MRK) with CEO Ken Frazier retiring as of June 30 and Robert Davis, who currently serves as the company's CFO, taking over. In this video from Motley Fool Live, recorded on Feb. 8, Fool.com contributors Brian Orelli and Keith Speights discuss Frazier's decade-long stint in the corner office and what investors should expect as Davis takes over.

Brian Orelli: Moving onto Merck, the ticker there is MRK. Earnings, they had earnings, but the big news might have been the CEO change. Ken Frazier is retiring as of June 30. Robert Davis is taking over as the new CEO. He was previously the vice president of global services and the chief financial officer. Any thoughts on the transition?

Keith Speights: Yeah. I think it was surprising, but it shouldn't have been totally a shock. Ken Frazier has been with Merck for a long time, has been CEO since 2011. He's coming up on his 10th anniversary as CEO. So it's not necessarily surprising that someone like Frazier who has been with the company for such a long time, been CEO for quite a while, to take a look at retiring and that's obviously what he's doing.

I will say at first glance, I'm not familiar with Robert Davis and so at first glance, when I saw, OK, Merck is naming their CFO as their new CEO. At first I thought, "I don't know if that's a good move." For a drug maker, I think it would be better to have someone at the helm who is more at versed in the science and really looking from that angle of product-product-product.

However, when you look at Robert Davis' background, while he is the CFO and he's obviously an accountant. He has had quite a bit of operational experience. You mentioned he's over at global services at Merck, but I looked at it his past track record. He was at Baxter for a while. He was president of their medical products there. He was president of the renal business and chief financial officer. I don't know him, I don't know much about him, but it does seem that he is not just a bean counter. It looks like companies have recognized his ability to run operations side and not just the accounting side. I'm going to reserve judgment and see how he does. But I was a little surprised that they would announce the CFO as their CEO, but this is a CFO who comes with more expertise than just the accounting side of things.

Orelli: In the fourth quarter, sales were up 5%. Adjusted earnings per share was up 17%. Seems like a pretty solid quarter. Definitely, Keytruda is driving a lot of that growth.

Speights: Yeah. They did disappoint Wall Street. Wall Street was expecting better numbers and they didn't meet those. Keytruda continues to be their juggernaut, it's their powerhouse. I think part of the problem for Merck is that they're just so dependent on Keytruda for their growth.

Orelli: It's only going to get worse at this point because they're breaking up the company and they're spinning off slow-growing drugs and now the high growth that has going to have Keytruda in it will be even more dependent on Keytruda in terms of total overall sales.

Speights: Exactly. Who knows? While they're doing their spin-off, we might see them doing some more deal-making themselves to beef up their pipeline and product line-up as well.

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