Merck KGaA said Thursday that fourth-quarter sales in its healthcare division rose 1.7 percent year-over-year to 1.8 billion euros ($1.9 billion), as revenue from Erbitux declined and sales of Rebif stagnated. The company's overall sales climbed 10.6 percent to 3.8 billion euros ($4 billion), while net income more than doubled from 126 million euros ($133 million) in the same period of 2015 to 269 million euros ($284 million).
In the three-month period, sales of Rebif reached 441 million euros ($466 million), with the company noting that "volume erosion" in the EU due to competition was offset by US pricing and higher year-end demand due to pharmacy stocking. Meanwhile, revenue from Erbitux reached 222 million euros ($234 million), down from 237 million euros ($250 million) in the prior-year period, which Merck said was "driven by mandatory EU price cuts." Further, sales of Gonal-f were relatively flat at 175 million euros ($185 million).
According to Merck, R&D costs in its healthcare unit reached 418 million euros ($441 million) during the quarter, up from 283 million euros ($299 million) in the same period of 2015. The company noted that the increase reflected the progress of key pipeline projects, including the cancer drug avelumab, which is being developed with Pfizer. For related analysis, see Spotlight On Interview: Merck KGaA's R&D renaissance – FirstWord discusses immuno-oncology aspirations with global head of R&D Luciano Rossetti.
For 2016, sales in the healthcare division slipped 1.1 percent to 6.9 billion euros ($7.3 billion), as Merck's overall revenue jumped 17 percent to 15 billion euros ($15.8 billion). Meanwhile, annual net income surged 46.1 percent to 1.6 billion euros ($1.7 billion).
For the current year, Merck indicated that sales in the healthcare unit are expected to show "slight organic growth," with an "ongoing organic...decline" in revenue from Rebif. The company's overall sales are estimated to show "slight to moderate" sales growth, while earnings "should remain about stable."
CEO Stefan Oschmann also confirmed Thursday previous reports that the company is looking to sell its biosimilars unit, with negotiations at an advanced stage. In 2012, Merck entered a deal with Dr. Reddy's Laboratories to develop a number of biosimilar oncology products, mainly focused on monoclonal antibodies.
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