Gil Roth07.18.12
04 Merck Serono
Frankfurter Str. 250
D-64293 Darmstadt
Germany
Tel: (49) 6151-72-0
Fax: (49) 6151-72-2000
www.merck.de
Headcount 40,676 (incl. non-pharma groups)
Year Established 1668
Bio/Pharma Revenues $8,243 8%
Total Revenues $14,308 16%
Royalty Revenues $496 16%
Net Income $876 3%
R&D Budget $1,706 10%
PROFILE
Top-Selling Drugs
Drug | Indication | $ | (+/- %) |
Rebif | MS | $2,355 | 6% |
Erbitux | oncology | $1,191 | 9% |
Gonal-f f | female fertility | $732 | 10% |
Concor | group heart failure | $553 | 12% |
Glucophage | diabetes | $482 | 15% |
Account for 64% of total pharma sales, same as in 2010.
PROFILE
In last year’s profile, the big story was that Merck Serono gave up on a new MS treatment, cladribine tablets. This year, the other shoe dropped. With Rebif besieged by competition in the MS field, and having limited prospects for medium-term growth, combined with price pressures in Europe (46% of its revenues are from Europe), Merck Serono announced a major restructuring in April 2012.
The company plans to shut down its HQ in Lake Geneva, Switzerland and consolidate HQ functions at its campus in Darmstadt, Germany. R&D staff will also be fired or transferred from Geneva to Darmstadt, Boston and Beijing. The moves will involve 500 layoffs and 750 transfers, although we’re a bit dubious that a significant number of staffers in Geneva will move off-continent.
Interestingly, the Beijing R&D site is hosted by Pharmaron, a U.S./China early-stage CRO. The R&D lab opened in August 2011 and MS reported having 2,850 staffers in place by the end of the year (!), a massive ramp-up in manpower.
As expected, the layoff announcement was met with protest by MS’ Geneva staff. At press time, the unionized workforce at the site was trying to negotiate with Merck KgA to keep some functions, perhaps at reduced pay. More layoffs throughout Merck KgA are reportedly in the offing. Shortly before press time, it was reported that Quintiles is looking to hire at least 100 of the laid-off employees, in areas of clinical operations, biostatistics, clinical research and drug safety.
In 2011, MS separated R&D into two organizations — Research and Early Development, and Development and Medical — to give early-stage labs more flexibility. MS also will make smaller cuts in several of its manufacturing sites. In 2011, it took a charge of $230 million to downsize its biologics plant in Corsier-sur-Vevey, citing overcapacity. That move likely followed the rejection of Erbitux’ first-line lung cancer application by the EMA in 2009; MS reapplied for that label late in 2011.
To find new business opportunities, MS formed a biosimilars alliance with Dr. Reddy’s in June 2012. The companies will focus on oncology MAbs, with Dr. Reddy’s handling early development through Phase I before handing compounds off to MS. They will share the U.S. commercial market and MS will handle most other markets, while Dr. Reddy’s will have responsibility for some emerging markets.
Meanwhile, the company continues to pound away at MS and oncology R&D programs and alliances, trying to find a successor for Rebif and a complement for Erbitux.