The main emphasis is on building up the group's Consumer Health Care division, although small acquisitions of companies or products to bulk up Merck's portfolio of innovative medicines are also on the cards. What the group is not planning, spokesman Dr Gangolf Schrimpf told In-PharmaTechnologist.com, is another large-scale pharmaceutical acquisition along the same lines as Serono. The Swiss company was acquired for €10.4bn in September 2006 and the Merck Serono division, combining the German group's existing ethical pharmaceuticals unit with Serono, was launched at the beginning of 2007. Merck subsequently underlined its commitment to research-based medicines and biopharmaceuticals by selling off its generics arm to Mylan Laboratories of the US for €4.9bn in May 2007. Since then, Merck has taken a close look at its pharmaceutical R&D pipeline and decided to tighten its focus on a few core therapeutic areas, namely oncology, neurodegenerative diseases, autoimmune and inflammatory diseases, fertility and, at the development stage, certain areas within endocrinology. The vision, explained Elmar Schnee, executive board member with responsibility for pharmaceuticals, at Merck's third-quarter results presentation last October was "a pharmaceuticals business with global reach delivering innovative therapies primarily in specialist indications". As part of that strategy, Merck also announced that it would offload any existing R&D projects in diabetes. The group has always said it wants to grow both organically and through acquisitions - and that includes Merck's chemicals business as well, Dr Schrimpf noted. But an interview with chairman Dr Karl-Ludwig Kley in German newspaper Die Welt has given the issue some fresh impetus. As Dr Kley pointed out, Merck is stepping up its internal R&D efforts in pharmaceuticals, with the goal of bringing a new medicine to market every three years from 2010 onwards. Bolt-on acquisitions are also part of the strategy, Die Welt reported. According to Dr Schrimpf, Merck would be happy to acquire products or companies in any of the core therapeutic areas mentioned above. These may have to be in-licensing deals as "these days it's not really possible just to buy a drug", he observed. Merck's key anticancer therapy Erbitux (cetuximab), sales of which jumped 40 per cent to €470m in 2007, came out of a licensing agreement with US-based ImClone Systems 10 years ago. Merck KGaA has marketing rights to Erbitux outside the US and Canada, as well as co-exclusive marketing rights with ImClone for Japan. "If we could repeat a deal like that, we would be happy," Dr Schrimpf commented. A more pressing concern, though, is to achieve critical mass in the other component of Merck's pharmaceutical business, Consumer Health Care. To do this, Merck needs to more than double revenues to around €1bn, which gives some idea of the size of target it is aiming at. Last year total revenues (including royalty income) in the Consumer Health Care division grew ahead of the market by 5 per cent to €419.7m. At a recent analysts' meeting to present the fourth-quarter and 2007 results, Dr Kley commented: "I had the dream of concluding a small but lovely [Consumer Health Care] acquisition at year-end. Unfortunately, it didn't materialise, so let's see whether we can make up for it." Merck says its over-the-counter (OTC) products business is already one of the fastest-growing out there, with a number four ranking in the sector. As Dr Schrimpf pointed out, the division has strong brands such as the Bion3 probiotic multivitamins line, the vitamin C supplement Cebion and Femibion, a vitamin and mineral supplement aimed at would-be-mothers and pregnant or nursing women. All the same, Consumer Health Care could do with expanding its geographical scope. Femibion, for example, is well-established in Germany but not in other European markets. As far as shedding its diabetes pipeline goes, Merck reached an amicable settlement with India's Glenmark Pharmaceuticals last month, under which the global rights to the DPP IV inhibitor Melogliptin (GRC 8200) will return to Glenmark. The Indian company is now looking for another development partner for Melogliptin, which is in Phase II clinical trials for Type 2 diabetes. In the meantime, Merck continues to seek partners for the rest of its diabetes R&D portfolio, Dr Schrimpf said.
Germany's Merck KGaA is still on the lookout for acquisitions or in-licensing deals to fill out its pharmaceutical business following the purchase and integration of Swiss biotech Serono.