#4: Merck Serono
Headcount 40,562
Year Established 1668
Pharma Revenues $7,641 3%/8%*
Total Revenues $12,337 14%/20%*
Net Income $853 62%/70%*
R&D Budget** $1,550 -6%/-1%*
* Converted at avg. exch. rate / based on reported currency (EUR)
** Pharma unit only
Top-Selling Drugs in 2010
Drug |
Indication |
$ |
(+/- %) |
Rebif |
MS |
$2,215 |
3% |
Erbitux |
oncology |
$1,089 |
12% |
Gonal-f |
female fertility |
$669 |
-1% |
Concor group |
heart failure |
$495 |
-10% |
Glucophage |
diabetes |
$420 |
3% |
Euthyrox |
thyroid |
$186 |
-2% |
Account for 66% of total pharma sales, same as in 2009.
PROFILE
By today’s standards, Merck Serono had a pretty good year. In Euros (its reporting currency), the unit posted 8% revenue growth in 2010, driven by mainstays Rebif and Erbitux, the latter of which continued to expand its label in key markets. Revenues only grew 2% to $2.0 billion, due to extra stocking that took place in 1Q10 in the U.S.
Shortly before press time, Merck Serono threw in the towel on its highest-profile pipeline project: cladribine tablets (multiple sclerosis). The company experienced a big setback when CHMP gave a final negative opinion on the marketing application for cladribine in the EU, contending the drug’s risks outweigh its benefits. MS’ resubmitted NDA for cladribine also garnered a complete response letter from the FDA in March 2011. The CRL requested “an improved understanding of safety risks and the overall benefit-risk profile either through additional analyses or by additional studies,” according to MS. In June 2011, Merck Serono decided that it wasn’t worth it to initiate further clinical trials to satisfy the FDA and EMA, and pulled the plug on the drug.
Merck Serono had big expectations for cladribine, projecting revenue growth of 5% to 10% in 2011, if cladribine was approved in the U.S. Without approval, growth would drop to 1% to 6% for the year, meaning they had expected around $300 million in first-year revenues from the drug. (The company did get approval for cladribine in a few markets — Russia and Australia — under the brand-name Movectro, but it will withdraw the product as part of its cancellation.)
MS also had a setback with safinamide, a Parkinson’s treatment that missed its primary endpoint in Phase III in November 2010. The company wrote down around $85 million in value for that dug.
That same month, MS got FDA approval for Egrifta, an injectable treatment for excess abdominal fat in HIV-infected patients with lipodystrophy. That drug was co-developed with Theratechnologies. In December 2010, MS and Sanofi began an oncology development pact to see if MS’ MEK inhibitor will work well in combination with some Sanofi candidates.
MS has a few prospects coming in its mid-to-late-stage pipeline, including cilengitide (glioblastoma), but without cladribine, the company will be depending on existing products for the next several years. Given that half its revenues come from Europe, where price pressures are mounting, that could be a problem. —GYR
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