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 European Commission (EC) has approved a label extension for Rebif (interferon beta-1a), Merck Serono’s drug for relapsing multiple sclerosis (MS), to cover treatment for early stages of the disease.

The new indication, which applies to all EU member states, includes the use of Rebif in patients who have experienced a single ‘demyelinating event’ or symptom of MS (such as a characteristic visual or muscular episode).

The approval was based on the results of the REFLEX study, which showed that Rebif could delay or prevent the onset of full MS in this patient population.

Rebif is an injectable interferon drug used to reduce nerve inflammation. It was approved for use in treating relapsing MS (the most common form of the disease) in Europe in 1998.

The REFLEX study was a two-year, placebo-controlled Phase III trial with 517 patients considered at risk of developing MS due to a recent isolated demyelinating event and brain scans indicating early signs of MS.

The incidence of conversion to MS (by McDonald criteria) was 86% in the placebo group and 62% in patients who received Rebif three times a week, showing that Rebif reduced the risk of conversion to MS over two years by 51%.

Dr Annalisa Jenkins, Head of Global Drug Development and Medical at Merck Serono, said: “Multiple sclerosis has an initial stage when clinical manifestations are not pronounced but irreversible neurological damage is taking place. Throughout the European Union, neurologists will now be able to prescribe Rebif for patients with early signs of this devastating disease.”

MS, a chronic inflammatory condition of the central nervous system, affects an estimated two million people worldwide, causing disability and death.

Based in Geneva, Germany, Merck Serono is the biopharmaceutical division of global pharmaceutical corporation Merck KGaA.

The European Medicines Agency (EMA) has recommended approval of an extended indication for Merck Serono’s Rebif (interferon beta-1a) to treat multiple sclerosis (MS), allowing the drug to be used earlier.

The new indication means that Rebif could be used to treat patients who have experienced a single CNS-related clinical event with an active inflammatory process, when alternative diagnoses have been excluded.

These patients would be at high risk of developing MS, so a successful drug intervention could critically affect their long-term prognosis.

The recommendation from the EMA’s Committee for Medicinal Products for Human Use (CHMP) refers to the REFLEX study, which showed that Rebif could significantly delay the onset of MS in patients with a first clinical event suggestive of the disorder.

In the phase III study, which involved 517 patients, the incidence of conversion to MS over two years was 86% with placebo, 76% with Rebif given once a week and 62% with Rebif given three times a week.

Rebif is currently authorised to treat patients with relapsing MS.

“This is an important step towards making Rebif available across Europe to patients with early signs of multiple sclerosis,” said Dr Annalisa Jenkins, Head of Global Drug Development and Medical at Merck Serono.

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.”

Merck KGaA posted healthy profits in Q2, despite being hit by a number of ‘one-time adjustments’.

Revenues increased by 16% to €2.6 billion following the acquisition of the Millipore Corporation, but integration costs and increased operating expenses hit profits.

Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA, says the “solid” figures “give us a healthy basis on which our new management team can build”.

Profits were helped by global sales of multiple sclerosis treatment Rebif which increased by 5.2% to €423 million. The group’s divisions also enjoyed an increase in revenues with Merck Serono’s profits up 2% to €1.4bn; the Consumer Health Care division up 3.9% to €118m; with Merck Millipore amounting revenues of €584m.

But operating expenses more than doubled in the quarter to €270m from €109m in the same period a year ago. An impairment loss of €161m due to overcapacity at the Corsier-sur-Vevey Large Scale Biotech (LSB) production plant in Switzerland was also suffered, as well as a provision of €20 million after the FDA and EMA rejected its MS cladribine tablets.

Merck says it realises it needs to make improvements to its pharma pipeline, as well as internal processes and structures, if it is to meet future financial targets.

“We are striving for leaner processes and we are reviewing our cost structures,” said Mr Kley. “Generating attractive returns on invested capital and cost management continue to be the top priorities on our agenda. The first steps have already been taken this year. These include the changes in the Merck Executive Board, in Merck Serono and Consumer Health Care as well as decisions resulting from our pipeline review.”

The company’s Executive Board now believes the total revenue for 2011 for the Group will increase between €10bn and €10.4bn.

Merck KGaA has submitted an application to the EMA to extend the indication of its leading multiple sclerosis (MS) treatment Rebif.

The requested extension is for the use in patients who have experienced a single demyelinating event and who are at high risk of converting to MS.

Dr Bernhard Kirschbaum, Head of Global Research and Development at Merck Serono, says the application is based on the results from the REFLEX study.

The study evaluated the effect of two different doses of Rebif – the currently approved 44mcg, three times a week and the 44mg once a week versus placebo – on the “Time to conversion to McDonald MS” in patients with a first clinical demyelinating event and having magnetic resonance imaging (MRI) brain scans consistent with early signs of MS.

The study met its primary endpoint for both doses by demonstrating it significantly delayed the conversion to McDonald MS in patients treated.

The HSA-free formulation of Rebif was used to conduct the study, which is now available in all EU countries, plus Australia, Canada and Switzerland, as well as a number of countries in Asia, Latin America, Africa and the Middle East.

The Merck Group increased its pre-tax profits by 70% to €642 million in 2010.

Revenue increased by 20% to €9,291 million compared to 2009, mainly due to the acquisition of Millipore Corporation, and its cancer treatment Erbitux, which generated sales of €820 million.

Dr Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA (pictured), said 2010 was a “transformational year” and the results “exceeded expectations”.

Cost of sales improved by 18% last year with gross margin also increasing by 21% to €6,905 million.

Operating results also increased by more than 70% and tripled in the fourth quarter of 2010 compared to a year ago.

The Group’s divisions, Merck Serono, Merck Millipore and the Performance Materials division, also fared well last year. Merck Serono increased total revenues by 7.6% to €5,754 million and saw full-year sales increase by 8.3%. Its five top-selling biopharmaceuticals, Rebif, Erbitux, Saizen, Gonal-f and Serostim, accounted for 61% of sales for the division.

Merck Millipore recorded growth of more than 80% and total revenues of €1,681 million; the Consumer Health Care division rose by 1.1% to €472 million; and the Performance Materials division saw full-year total revenues increase by 38% to €1,384 million from €1,006 million in 2009.

The Executive Board now expects further growth in the next two years on the back of 2010’s success.

“With Millipore included for the full year, we expect Group 2011 revenues will grow 13% to 18% and the operating result will rise by 35% to 45%,” said Dr Kley.