Profits after tax nearly halved (-48.7%) at Merck despite sales at Merck Serono and Merck Millipore divisions witnessing growth.

Total group revenues increased by 3.2% to €2.6 billion as overall sales improved by 3.5% to €2.5 billion.

However, profits fell to €177m in the first three months of the year compared with €344m in the same period a year ago.

Karl-Ludwig Kley, Chairman of the Executive Board at Merck, admitted the company had delivered only “a reasonable operating performance” in the first quarter of 2012.

Merck revealed at the end of last month it planned drastic cutbacks in its Serono division cutting 500 jobs and transferring another 750 as part of plans to close its Geneva headquarters.

But despite the planned cuts, the division’s Q1 sales grew by 5.4% as global demand for Rebif generated income of €430m and demand for Erbitux earned €214m.

Its Merck Millipore division also saw sales increase by 7.3% to €653, driven by solid results from its Lab Solutions and Process Solutions business units.

Merck now predicts modest increase in profits for the full year for its Serono division before the planned efficiency savings and an increase in profits in line with sales at Merck Millipore.

Merck KGaA saw record-breaking levels of revenue in 2011 as sales topped €10 billion for the first time.

Revenue was up 10.6% to €10.2 billion following the 2010 acquisition of the Millipore Corporation and growth in the Group’s four divisions – Merck Serono, Merck Millipore, Consumer Healthcare and Performance Materials.

Karl-Ludwig Kley, Chairman of Merck’s Executive Board, said the Group delivered a “good operational result in a challenging year” but confirmed that despite topping €10bn in revenue job cuts would still be made.

The company revealed last month it plans to cut jobs across all businesses and regions under new efficiency plans it aims will reduce costs and exploit new growth opportunities. (Read here)

Mr Kley says that the efficiency plans recognise the “competitive and market pressures” Merck faces in the future.

Despite the record breaking levels of revenue, overall operating result was down 11.5% to €985 million and net profits decreased 2.3% to 617 million Euros.

Sales increased by 17% to €2.78 billion and gross margin rose by 8.4% to €7.4bn. However, marketing and selling expenses were up 7.1% to €2.39bn and royalty, licence and commissioning expenses increased after increased sales of Rebif and Erbitux. R&D costs also jumped to €1.5bn after expensive late-stage clinical trials by Merck Serono.

Total revenues of Merck Serono increased 2.9% to €5.92bn compared to €5.75bn in 2010, which was described as a “solid performance” by the Group. Global sales of Rebif topped €1.69bn after increased demand in the US. Targeted cancer treatment Erbitux recorded sales of €855 million due to strong growth in emerging markets.

In Merck’s other divisions, Merck Millipore almost increased sales by half (48%) to €2.39 billion after growth in North America, Latin America and Asia. Its consumer health care arm saw revenue increase 5.1% to €484 million in 2011, and its Performance Materials division increased revenue slightly by 1% to €1.46bn.

The Group’s Executive Board now expects total revenues to increase slightly in 2012 and 2013.

The global prevalence of colorectal (bowel) cancer is increasing while it remains the second most common type of cancer in Europe.

Key factors in controlling bowel cancer – smoking cessation, early diagnosis and timely drug interventions – are lacking in many parts of the world, according to the European organisation EuropaColon.

Even in the UK, the cost of treatment is an issue: NICE rejected three drugs for late-stage bowel cancer in November 2011 on grounds of cost-effectiveness.

EuropaColon, an umbrella organisation dedicated to fighting bowel cancer in Europe, noted that the disease causes about 230,000 deaths in Europe each year.

The incidence of bowel cancer is lower in Eastern than in Western Europe, but is increasing in the former countries due to the prevalence of smoking and obesity combined with poor access to diagnosis and treatment.

The prevalence of obesity in developed countries is also maintaining a high incidence of bowel cancer.

However, the available treatment options of surgery, chemotherapy and radiotherapy mean that bowel cancer can be cured in over 90% of cases if diagnosed early.

During March, declared European Colorectal Cancer Awareness Month, public awareness of bowel cancer prevention and treatment will be raised by a widespread campaign uniting government, the media and the medical professions.

In the UK, NICE has recommended six drugs for bowel cancer, but in November 2011 it issued final draft guidance not recommending the use of Erbitux, Avastin and Vectibix for treatment of metastatic bowel cancer, on grounds of cost.

“It is alarming to see CRC incidence and death numbers rising at high speed in many European countries, whilst decreasing in others, reflecting the differences in screening and treatment in Europe in a dramatic way,” commented Jola Gore-Booth, Founder and CEO of EuropaColon.

“The activities during ECCAM undertaken by our local organisations help to inform more people across Europe about prevention, screening and access to best treatment and care. We call on politicians, clinicians, industry and media to support these initiatives in order to save lives from this threatening disease.”

Global revenue increased 5% in 2011 at Eli Lilly to $24.2 billion after the company saw demand increase but net income fall 14% to $4.3bn.

Agreements to supply generic versions of Zyprexa and Gemzar helped reduce the impact after the two lost patent exclusivity and saw revenue in the US increase by one per cent to $12.9bn. Revenue outside the US increased 11% to $11bn.

Lilly says total revenue was reduced by approximately $410 million due to the impact of the US healthcare reforms and now predicts to lose billions of dollars in 2012 due to generic competition for Zyprexa.

In 2011, total operating expenses increased 8% and R&D expenses were up 3% to just over $5bn. Lilly also paid $316.4m in relation to severance costs after its restructuring.

Its operating income was down 15% to $5.5bn compared to 2010 after an increase in R&D charges as part of its diabetes collaboration with Boehringer Ingelheim, coupled with clinical trial costs, restructuring and lower gross margin per cent.

The loss of patent exclusivity on antipsychotic treatment Zyprexa saw global sales drop 8% to $4.6bn. Zyprexa lost its patent protection in the US in October, resulting in sales decreasing by 13%. Outside the US, where exclusivity was also lost in the majority of markets, sales fell 3% to $2.45bn. But in Japan, where its patent still stands, sales reached $540m.

Gemzar also suffered at the hands of generic competition for the first time as sales decreased by 61% to $452.1m. But the news was better for Alimta, Humalog, Cialis, Humulin, Evista, Forteo and Strattera, which all recorded improved sales in 2011.

Lilly also received royalties of $409.2 million from Erbitux, an increase of 6% on 2010; $422.7m from Byetta, a 2% loss compared with 2010; and $302.5m from sales of Effient.

But Lilly now anticipates that revenue will fall to between $21.8bn and $22.8bn next year after an expected decline of more than $3bn in Zyprexa sales due to its exposure to generic competition. It hopes the loss in revenue will be partially offset by growth in Cymbalta, Cialis, Humalog, Humulin and Forteo, as well as continued improvement in its newer products such as Effient, Axiron and Tradjenta.

Japan and Emerging Markets are expected to continue to post strong underlying growth. But overall revenue in these markets is also expected to be hit by pricing actions in Japan and the impact of patent expirations, including Zyprexa, in a number of countries in these regions.

NICE has issued final guidance to the NHS not recommending the use of Erbitux (cetuximab), Avastin (bevacizumab) and Vectibix (panitumumab) for the treatment of metastatic colorectal cancer that has progressed after chemotherapy.

Concerns were raised by NICE’s Appraisal Committee surrounding the clinical evidence of the products, especially the use of Avastin.

Sir Andrew Dillon, NICE Chief Executive, says the Institute is “disappointed” not to be able to add the three drugs to the six other recommended options available to the NHS.

No appeals were received on the final draft guidance which did not recommend the treatments after the evidence was considered.

Uncertainness were raised over the data supplied by Roche on Avastin plus non-oxaliplatin chemotherapy of its overall survival gain when used as a second or third-line treatment for those who had not responded to first-line or second-line chemotherapy.

Similar queries were also asked by the Committee of the estimates supplied by Merck Serono on Erbitux plus Campto based on the mixed treatment comparison, and on the magnitude of the survival benefit of Vectibix relative to best supportive care provided by Amgen.

“We have to be confident that the benefits that drugs offer patients really do justify what the NHS will have to pay for them,” said Sir Andrew.

“The independent appraisal committee which drafted the recommendations does not feel it has enough evidence, especially in the case of bevacizumab, to feel confident in recommending these drugs for use on the NHS.”

Campto (irinotecan), Eloxatin (oxaliplatin), Xeloda (capecitabine), tegafur with uracil and Erbitux (cetuximab) have all previously been recommended for various stages of colorectal cancer for use on the NHS.

NICE has failed to recommend a trio of drugs for the treatment of metastatic colorectal cancer that has progressed after first-line chemotherapy in final draft guidance.

Its independent Appraisal Committee deemed there was not enough evidence to recommend the use of Erbitux (cetuximab), Avastin (bevacizumab) and Vectibix (panitumumab).

Sir Andrew Dillon, NICE Chief Executive, said the Institute has to be confident that the benefits that treatments offer to patients justify what the NHS has to pay for them.

Campto (irinotecan), Eloxatin (oxaliplatin), Xeloda (capecitabine), tegafur with uracil and Erbitux (cetuximab) have all previously been recommended for various stages of colorectal cancer.

Uncertainness were raised over the evidence presented by Roche on Avastin plus non-oxaliplatin chemotherapy of its overall survival gain when used as a second or third-line treatment for those who had not responded to first-line or second-line chemotherapy.

Questions were also asked by the Committee of the estimates supplied by Merck Serono on Erbitux plus Campto based on the mixed treatment comparison and on the magnitude of the survival benefit of Vectibix relative to best supportive care provided by Amgen.

“We have already recommended six treatments for various stages of colorectal cancer and are disappointed not to be able to add these three drugs, cetuximab, bevacizumab and panitumumab to the list of treatments for this stage of the disease,” said Sir Andrew.

The FDA has again extended the indication for Erbitux (cetuximab) and approved the treatment for patients with advanced head and neck cancers in combination with chemotherapy.

The extension is based on the EXTREME study of 442 patients previously untreated with chemotherapy that demonstrated those treated with Erbitux lived 10.1 months on average, compared with 7.4 months on those treated with chemotherapy alone.

Richard Pazdur, Head of Oncology, FDA, says the medication is an “important tool” for doctors and patients.

Erbitux is now approved for five separate indications across two tumour types and becomes the first regimen in 30 years with extended overall survival in patients with recurrent locoregional or metastatic squamous cell carcinoma of the head and neck to be approved.

Merck saw revenues increase by 3.8% to €2.5 billion and net profit rise 7.5% to €227 million in the third quarter after solid performances by its pharmaceuticals and Millipore divisions.

Revenues at Merck Serono increased 5.4% to €1.4bn after increased global sales of Rebif and Erbitux (pictured) whilst its Millipore division saw revenue reach €588 million compared to €559 million the same period a year ago.

Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA, says the results leave the Group “well positioned as we head into the end of the year”.

Its Executive Board now forecasts annual Group revenues between €10-10.2 billion and the debt resulting from the 2010 acquisition of Millipore to decrease at an “excellent pace”.

Administration expenses were down 2.7% to €124 million with other operating expenses and income also declining slightly by 1.3%. R&D costs increased to €371 million in Q3 due to a combination of late-stage clinical trials and the strong Swiss franc.

Earnings before interest and tax were also down 8.4% with underlying core operating result – which excludes Merck Serono and Millipore – decreasing by 21.5% of revenues as a result of the weakening of the Performance Materials division, the Group claimed.

Generic organic revenue growth in Merck Serono increased nearly 9% after its multiple sclerosis treatment Rebif recorded global sales of €426 million and the cancer treatment Erbitux earned € 218 million, primarily as a result of growth in emerging markets.

“The Merck Group produced solid third-quarter revenue growth in a difficult environment, driven mainly by good performances from the Merck Serono and Merck Millipore divisions,” said Karl-Ludwig Kley. “We are making progress in driving our change agenda forward and we will provide important updates on this endeavour in the first half of 2012.”

NICE has failed to recommend three treatments for patients with metastatic colorectal cancer that has progressed following first-line chemotherapy.

According to the new draft guidance, Merck Serono’s Erbitux (cetuximab), Roche’s Avastin (bevacizumab) and Amgen’s Vectibix (panitumumab) failed to prove to NICE’s Independent Appraisal Committee that the treatment options were cost-effective.

Andrew Dillon, Chief Executive of NICE, said that six treatments for various stages of colorectal cancer are already recommended by NICE and at present, the Committee “does not feel it has enough clear evidence, especially in the case of bevacizumab, to be able to recommend these drugs for use on the NHS.”

The preliminary recommendations are now available for public consultation.

“It is also possible for the manufacturers to provide further comment on the committee’s interpretation of their products’ clinical effectiveness or consider reducing the price they are asking the NHS to pay through a patient access scheme,” Dillon said.

Profits were up 77% in the first quarter of 2011 at the Merck Group and total revenues increased a fifth to €2.5 billion in Q1, mainly due to the acquisition of the Millipore Corporation in the US.

Sales of Erbitux (€209 million), Gonal-f (€113 million), Concor (€95 million), Glucophage (€81 million) and Euthyrox (€46 million) were all up as free cash flow totalled €645 million.

Dr Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA, says the Group “generated a solid performance” in Q1 and it was “off to a very good start” to the year.

Acquisitions and divestments accounted for 16% percent of the increase of revenue while positive currency effects and increased sales also boosted results.

The gross margin in the first quarter improved by 19% to €1.9 billion, compared to €1.6 million a year ago, after the cost of sales increased by almost a third (31%).

Driven by the strength of the Group’s Performance Materials and Merck Millipore divisions, investment in R&D increased by 9.3% to €380 million. A further €4.2 million was also spent on repairs to a Merck facility in Japan damaged during the March 11^th earthquake.

“We continue to expect the increase in the Group’s 2011 operating result will remain as stated on February 21^st, namely 35% to 45%,” said Dr Kley.