Full-year sales in Merck KGaA's Serono unit lifted by fertility franchise, emerging markets

Merck KGaA announced Tuesday that full-year sales in its Serono unit rose 1.7 percent versus 2013 to 5.8 billion euros ($6.5 billion), with growth mainly coming from the division's fertility franchise and emerging markets. Merck's overall annual sales lifted 5.5 percent to 11.3 billion euros ($12.6 billion), while net income reached 1.2 billion euros ($1.3 billion), down 3.7 percent year-over-year. The company had previously projected full-year revenue of 11.0 billion euros ($12.3 billion) to 11.2 billion euros ($12.5 billion).

In the 12-month period, sales of Rebif declined less than 1 percent to 1.8 billion euros ($2 billion), which the company explained was due to "increasing competitive pressure from oral formulations" in the multiple sclerosis field. Annual revenue from Erbitux grew 5.9 percent to 904 million euros ($1 billion).

For the quarter ended December 31, Merck recorded net income of 280 million euros ($313.2 million), down slightly from 280.6 million euros ($313.9 million) in the year-ago quarter, while sales surged 12.9 percent year-over-year to 3.0 billion euros ($3.4 billion). For specific products, revenue from Rebif fell 5 percent to 450 million euros ($503.4 million), while sales of Erbitux climbed 5 percent to 234 million euros ($261.7 million).

"We strengthened all three of Merck's business sectors," commented Merck chairman Karl-Ludwig Kley, adding "these developments are the result of our long-term transformation and growth strategy." In September last year, the German drugmaker reached an agreement to acquire life science company Sigma-Aldrich for approximately $17 billion, while the company later unveiled plans to retain its consumer healthcare unit.

Additionally, Merck entered into an agreement with Pfizer to co-develop the experimental PD-L1 inhibitor MSB0010718C for multiple cancer indications in a deal that could be worth more than $2.8 billion to the former. Kley stated "with…the offer to acquire Sigma-Aldrich and the alliance with Pfizer in immuno-oncology, we have laid the foundations for future growth."

For 2015, Merck said it expects "a slight increase" in organic sales, and a slight increase or at least stable earnings, excluding one-time items. The company noted that the outlook does not factor in the integration of Sigma-Aldrich, which is expected to occur in mid-2015. "Initial 2015 guidance is cautious and more qualitative, as usual," remarked Commerzbank AG analyst Daniel Wendorff, adding "overall, we see today's event as a positive."

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