September 5, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Darmstadt, Germany – Merck KgaA has put a for-sale sign on its Consumer Health business. The company indicates its options include full or partial sales, or strategic partnerships.
“We have continued to transform Merck MGaA, Darmstadt, Germany, over the last years into a leading science and technology company,” said Stefan Oschmann, Merck KGaA’s chairman and chief executive officer, in a statement. “Thereby we regularly review our portfolio in the context of our innovation driven strategy. Healthcare largely focuses on its biopharma pipeline.”
Last year the division brought in 860 million pounds, or about $1.02 billion (US). Its products include Bion, Femibion, Nasivin, Neurobion, and Seven Seas.
John Carroll, writing for Endpoints News, notes, “Backed by a variety of brands, the German Merck says it reaped more than a billion dollars in revenue from the division. But following the OK on the checkpoint cancer drug Bavencio as well as cladribine—its MS laggard now approved in Europe—Merck KGaA is far more whipped up by the potential of its pipeline, looking to drive home a new rep for clinical success which they find far more exciting than the consumer work.”
TheStreet writes, “Merck posted weaker-than-expected second quarter earnings last month and trimmed its full-year sales forecasts owing, in part, to the strength of the European single currency, which has gained nearly 12 percent against the U.S. dollar since the beginning of April.”
The company’s entire healthcare unit had a 1.65 percent increase in net sales in the second quarter. The healthcare group’s earnings were 16.6 percent lower from the same period the previous year due, it said, to “higher investments and negative mix effects exceeding income from milestone payment for Bavencio,” its drug for skin cancer.
The company emphasizes that key milestones in its focus on science and technology includes acquisitions of Sigma-Aldrich, AZ Electronic Materials and Millipore. It also divested its biosimilars business in addition to its current ongoing strategic portfolio shift within the healthcare business. It cites approvals of Bavencio (Avelumab) in immuno-oncology and Mavenclad (Cladribine tablet) for highly active relapsing multiple sclerosis (RMS).
“Our Consumer Health portfolio has been continuously enhanced over the past years,” said Belen Garijo, board member and chief executive officer of Healthcare, in a statement. “We have maintained a solid position in attractive markets, and demonstrated a pattern of profitable growth. We expect increasing internal constraints to fund the business to reach the required scale. Fully anticipating this, we are preparing strategic options.”
Carroll says, “Merck KGaA has had to deal with numerous attempts to reorganize and overcome some embarrassing earlier failures. It tried, twice, with the cancer vaccine Stimuvax. And cladribine was slapped back by regulators unhappy with the Phase III program that was originally designed for it. Pfizer, though, helped change more than a few minds with its record $850 million upfront to partner on Bavencio. That deal also included $2 billion in milestones. And now the company appears ready to let the dead bury the dead and move ahead on R&D.”
