Merck KGaA drug sales offset declines in other sectors
This article was originally published in Scrip
Merck KGaA's first-quarter sales were flat after poor performances in its chemicals and liquid crystals businesses offset growth in pharmaceuticals.
The group's total revenues fell slightly to €1.85 billion, compared with €1.86 billion in the first quarter of last year. Total pharmaceutical sales grew by 10% to €1.42 billion due to 11% growth in Merck Serono
Merck KGaA's lead product Rebif (interferon beta-1a) for the treatment of relapsing forms of multiple sclerosis grew by the greatest amount, increasing by 18% to €368 million. Erbitux (cetuximab), its targeted cancer treatment, also performed well, with revenues of €161.6 million (+11%).
However, sales of Raptiva (efalizumab), which performed well last year, dropped by 36% to €14 million as Merck KGaA decided to stop selling the drug.
The European Commission suspended marketing authorisation of the psoriasis therapy earlier this month after Merck Serono confirmed three cases of progressive multifocal leukoencephalopathy in patients on Raptiva.
Merck KGaA wrote off €195 million in Raptiva product technology assets in the final quarter of last year and booked a further €70 million this quarter in costs associated with the suspension of the product.
Pharmaceutical R&D costs rose by 9% to €271.9 million mainly due to increased costs for accelerated late-stage clinical trials. SG&A costs increased by 21% to €530 million.
Merck KGaA's First-quarter 2009 Top Product Sales (€ mill)
Product | 1st quarter | % change |
Rebif | 368 | +18 |
Erbitux | 162 | +11 |
Gonal-F | 134 | +17 |
Concor | 99 | - |
Glucophage | 74 | +3 |
Saizen | 46 | +17 |
Euthyrox | 36 | +1 |
Raptiva | 14 | -36 |
Total revenues from its chemicals business declined by 22% to €436 million, and the rise in operating expenses meant that its operating result for the unit plummeted by 79% to €37 million.
The company's liquid crystals division fared even worse, with sales falling by 44% to €131 million. The business was negatively affected by 4.8 percentage points from currency exchange rates and suffered from a "dramatic slowdown in the global liquid crystals panels business", Merck KGaA said.
Liquid crystal sales increased month on month in the first quarter, it said, and is cautiously optimistic that the period was the low point for the year.
Although Merck KGaA was confident about the performance of its pharmaceutical business this year, it was less positive about other areas.
It expects Merck Serono to grow by 6-9% and consumer healthcare by 5-9%. However it has forecast a decline of 20-30% in its liquid crystals business and the performance of its lifescience chemicals to be flat.
The group's total revenues in 2009 are expected to grow by 0- 5%.