1. Justine Degeuser
Morgane Dufour
Pauline Dulouard
Olivier Héloir
23th February 2012

2. Summary From Merck to Merck Serono Merck Serono nowadays
Merck Serono’s future

3. Merck’s history
1668
1914
1953

4. Merck’s history
Merck is the world’s oldest pharmaceutical and chemical company
morphine codéine
1668
Friedrich Jacob Merck: Engel-Apotheke (“Angel Pharmacy”) in Darmstadt
1827
Plant extracts and other chemicals by Heinrich E. Merck
Alkaloïdes:
Quelques 150 ans plus tard, Heinrich E. Merck reprend la petite affaire familiale pour la transformer en fabrique de médicaments et de produits de chimie fine. La révolution pharmaceutique est en marche : dès lors, Merck produit à grande échelle des alcaloïdes (morphine, codéine, cocaïne…).
A la fin du 19e siècle, George Merck, membre de la famille(Georg Merck, petit-fils de Heinrich Emanuel Merck). , s’installe aux Etats-Unis pour créer, en 1903, Merck & Co. et se lancer à son tour dans la fabrication de ces produits
Mais l’entrée en guerre des Etats-Unis le contraint en 1917 à se séparer de la branche allemande et à assurer sa propre croissance
L’année 1925 marquera un véritable tournant. George Merck cède la direction à son fils qui transforme la société de chimie fine en entreprise pharmaceutique. La recherche et le développement s’imposent comme les nouveaux fers de lance d’une industrie en pleine expansion. 
1933, le Merck Institute of Therapeutic Research est fondé. Les scientifiques de l’institut associent alors leurs noms aux plus grandes avancées scientifiques et médicale : la mise au point et l’industrialisation de la pénicilline, de la cortisone, de la vitamine B12, de la streptomycine… permettent de soigner des millions de malades.

5. Merck’s history
1887
A subsidiary in New York was created (Georg Merck, a grandson of Heinrich Emanuel Merck)
1900
Merck was represented on all continents
Confiscation : World War I, Merck & Co. became an independent American company
1914
George Merck is giving direction to his son that turns the company of fine chemicals in pharmaceutical company
1925
1933
The Merck Institute of Therapeutic Research is based

6. Merck’s history
After the Second World War merged with Sharp & Dohme = MSD
1953
Establishment of Merck KGaA
For USA: Merck = EMD
1953

7. From Merck to Merck Serono Chemistry + Primary Care

8. Business sector in 2005

9. Sales in 2005 Products EUR million Concor® 348.4 Glucophage® 297.2
Duoneb®
251.5
Erbitux®
218.2
others
573

10. Small molecules + Erbitux® Development of biological molecules
Erbitux® – a first-in-class IgG1 monoclonal antibody targeting the EGFR. Treatment of metastatic colorectal cancer and squamous cell carcinoma of the head and neck.
1998 – Eli Lilly Merck licensed the right to market Erbitux® outside the US and Canada

11. Looking for a biotech company Focus on specialist and innovative drugs
Erbitux® is a recent success of Merck Group
Development of not only new chemical but especially biological molecules
Strategy to grow from a local, mid-sized pharmaceuticals and chemicals company into a leading global biopharmaceuticals player

12. 4th largest companies specializing in biotech
Serono for sale
4 therapeutic areas:
Fertility treatments : world leader (60%market share) Gonal-f®
Growth and metabolic disorders
Psoriasis
Multiple sclerosis : blockbuster Rebif® is the globalmarket leader
4th largest companies specializing in biotech
Led since 1996 by billionaire Ernesto Bertarelli

13. Decision to acquire the pioneering biopharmaceutical company Serono
Advantages of Serono
High-quality manufacturing
Innovative
and successful products
A well-stocked
and promising development pipeline
Access to the important U.S. market
Decision to acquire the pioneering biopharmaceutical company Serono

14. Acquisition of Serono – 2007 16,6 milliards CHF= 10,6 milliards d‘ €
On February 5th, 2007, Merck held 97% of Serono’s capital and 98% of the voting rights.

15. Serono’s pipeline

16. Serono’s drugs Serono : BIOTECH Serono’s drugs Neurology
Reproductive Health
Growth & Metabolism
Dermatology

17. Merck’s drugs Merck : CHEMISTRY Merck’s drugs Oncology Hypertension
DANCOR®
Growth and metabolism
Diabetes
Merck : CHEMISTRY

18. Merck Serono’s drugs Merck Serono : BIOTECH Merck Serono’s drugs
Neurology
Reproductive Health
Growth & Metabolism
Dermatology
Hypertension
Dancor®
Oncology
Diabetes

19. Merck had integrated the name Serono and became Merck Serono+

20. Merck Serono Vs EMD Serono
Divisions for innovative prescription drugs of Merck
In North America (U.S. and Canada), the activities of Merck Serono are conducted under the name EMD Serono.
EMD: Emanuel Merck, Darmstadt
In medical biotechnology, Merck Serono is a leader in Europe.

21. Merck relocated on the premises of Serono
Headquarters in Geneva (Switzerland)

22. Merck Serono becomes Serono Develop and scale biologics
Strategy focused on delivering innovations to patients
Therapeutic areas: neurodegenerative diseases
oncology
fertility
endocrinology
rheumatology
Bring cardiometabolic care products in emerging markets

23. Merck generics for sale
13/05/ billion €
Mylan acquired Merck's generics
The divested Generics business represents EUR 1,802 million of sales in 2006 and sells products in more than 90 countries

24. Theramex for sale 10/28/2010 265 million€
Merck KGaA's European Based Women's Health Business
revenues = 100 million € in 2009
Teva Pharmaceutical has acquired Merck's Theramex
Teva Pharma take over the distribution rights of Theramex's products sold in several countries.

25. Merck Serono nowadays

26. What’s Merck group and Merck Serono now?
On a tjrs la division de merck entre la branche chimi et pharmaceutique
-niveau pharma on a consmer health car avec des produits OTC comme bion, fémibion pour la santé de la femme, flexagil pr l’agilité, nasivin pour les rhumes et merck serono avec des produits de biotech majoritairement, qu’on va détailler par la suite.
-niveau chimie on a millipore qu’ils viennent de racheter avec des technologie pour les scientifiques et performance maatérials avec des cristaux liquides, despigments…
Merck is organized as a Corporation with general partners (Kommanditgesellschaft auf Aktien - KGaA). At least one partner has unlimited liability for the company’s creditors (general partner). The others (shareholders) hold an interest in the share capital without any personal liability for the company’s debts. It is therefore a hybrid of an Aktiengesellschaft (German stock corporation) and a Kommanditgesellschaft with a focus on German stock corporation law

27. Sales of Merck KGaA - 2011 Merck Serono 92% Consumer Health Care 8%
Pharmaceuticals : 63%
Merck Serono
92%
Consumer Health Care 8%

28. Regular increase of the activity Increase of sales
Merck Serono
Regular increase of the activity Increase of sales
+27%
+29%

29. Merck Serono – R&D expenses
2010 : 1167 millions €
: increase of 32%

30. Consumer Health Care
Drug without prescription Women’s and children’s health Cough and cold treatments Products to support everyday health and agility. Leading brands = Bion®, Femibion®, Nasivin®, Flexagil®, Seven Seas®, Kidabion®, Cebion® and Diabion®.

31. Performance Materials
= Liquid Crystals, Advanced Technologies, Pigments & cosmetics. Materials and solutions are being used by the consumer electronics, lighting, printing, plastics, and cosmetics industries. Merck is active in the growth markets around “clean energy” and develops innovative materials.

32. Acquisition de millipore - 2010 pour 5 137 millions d’ €
Merck Millipore
Acquisition de millipore pour millions d’ €
BIO SCIENCE
LAB SOLUTION
PROCESS SOLUTION

33. Revenues lost due to patent expiries - a % of 2010 revenue
Patent cliff
Revenues lost due to patent expiries - a % of 2010 revenue
Key products protected for next three years -patent expiries:
Rebif ® : EU 2015, US 2022
Erbitux ® : EU 2014, Japan 2016
Gonal-f ® : EU 2009, USA 2015

34. Pipeline & Products

35. Strategy of Merck Serono
Strategic focus
Enhance the productivity of our drug discovery activities with innovative and emerging technologies 
Expand upon our Multiple Sclerosis franchise to enter other neurodegenerative disease areas 
Expand our pipeline in Rheumatology with complementary product opportunities offering a broad indication potential 

36. Assessment of Therapeutique Areas
Strategy merck serono
Assessment of Therapeutique Areas

37. ~60% of portfolio based on biologically manufactured products
Sales
Products
% Sales
Eur Million
Rebif®
31%
1 668
Erbitux®
15%
820
Gonal-f® 9%
504
Concor® franchise 7%
373
Glucophage® franchise 6%
316
Other products
32%
1 727
Biologics
Small molecules
~60% of portfolio based on biologically manufactured products

38. Phase I Phase II Phase III In Registration Oncology
ARX 424
Long-acting interferon
Multiple sclerosis
ONO
Oral S1P receptor modulator
Multiple sclerosis
Erbitux® (cetuximab)
Anti-EGFR mAb (PETACC-8*)
Adj colon cancer
Rebif® HSA-free formulation
(interferon beta-1a) for patients
with early signs of MS (REFLEX)
EMA: Approved
ATX-MS-1467
Immune tolerizing agent
Multiple sclerosis
Extended-release formulation of
interferon beta-1a
Cilengitide
Integrin inhibitor
SCCHN
Erbitux® (cetuximab)
Anti-EGFR mAb (EXPAND)
Gastric cancer
Erbitux® (cetuximab)
Anti-EGFR mAb
NSCLC (1st line therapy)
EMA: Application submitte
Cilengitide
Integrin inhibitor
NSCLC
Cilengitide
Integrin inhibitor (CENTRIC)
Glioblastoma
PI –2301
Second-generation peptide copolymer
Multiple sclerosis
Anti-integrin mAb (DI17E6)
Metastatic colorectal cancer
Stimuvax®
Cancer immunotherapy
(START, INSPIRE)
NSCLC
Hypoxia-targeted drug (TH-302)
Soft tissue sarcoma
MEK inhibitor
(AS703026/MSC B)
Solid tumors and hematological
malignancies
Anti-integrin mAb (DI17E6)
Metastatic prostate cancer (mCRPC),
setting prior to chemotherapy
Novel combinations of MEK inhibitor
(AS703026/MSC B) with one of two sanofi-aventis PI3K inhibitors**
Solid tumor
Hypoxia-targeted drug (TH-302)
Pancreatic cancer
Kuvan
Sapropterin dihydrochloride
(SPARK****)
PKU in pediatric patients < 4year
Fibroblast Growth Factor 18
Cartilage injury repair
MEK inhibitor
(AS703988/MSC B)
Solid tumors
Atacicept
anti-Blys/anti-APRIL fusion protein
Systemic lupus erythematosus
c-Met kinase inhibitor
(EMD )
Solid tumors
Oncology
NHS-IL12***
Cancer immunotherapy
Solid tumors
Neurodegenerative Diseases
Fibroblast Growth Factor 18
Osteoarthritis
Rheumatology
Atacicept
anti-Blys/anti-APRIL fusion protein
Lupus nephritis
Endocrinology

39. degenerative Diseases CardioMetabolic care and others
Therapeutic areas
Oncology
Neuro
degenerative Diseases
Fertility
Endocrinology
CardioMetabolic care and others

40. Oncology Colorectal cancer CRC Head and Neck cancer
The third most deadly cancer among women and the fourth in men. Worldwide, it is responsible for around 529,000 deaths per year.
Metastatic bowel or mCRC : start in colon or rectum but has spread to another part of the body - metastasizes. About a quarter of people diagnosed with CRC already have metastatic CRC.
Head and Neck cancer
Flat "squamous" cells that line the surfaces in the head and neck area, such as the mouth, nose and throat, and are thus termed "squamous cell carcinomas of the head and neck" (SCCHN).
Significant increase in the worldwide incidence of SCCHN over the past decade, particularly among women.
Globally, there are almost 650,000 new cases of head and neck cancer each year, and over 350,000 deaths.

41. Oncology Erbitux® Cetuximab IgG1 monoclonal antibody targeting EGFR.
Approved in many countries all over the world for KRAS wild-type mCRC with chemotherapy
Approved in squamous cell carcinoma cancer of the head and neck – SCCHN in combination with radiation therapy or chemotherapy.
Erbitux® - Product of Eli Lilly, rights to commercialize Erbitux outside US and Canada
In 2010, sales of Erbitux® rose by 18% to 820 million €.
Strenghts :
Strong position in niche markets in Europe
High market share in metastatic colorectal cancer
Standard of care in head & neck cancer

42. Erbitux competitors - CRC
Oncology
Erbitux competitors - CRC
Avastin® – Bevacizumab Roche / Genentech, USA + EU
Approved for mCRC, Advanced nonsquamous NSCLC,
Metastatic kidney cancer when used with interferon alfa, Glioblastoma.
Vectibix® – Panitumumab Amgen, USA + UE
Approved for mCRC with disease progression on or following fluoropyrimidine-, oxaliplatin-, and irinotecan-containing chemotherapy regimens
Xeloda® – Capecitabine Roche / Genentech, USA + UE
Approved for mCRC, cancer of colon after surgery , breast cancer

43. Erbitux ® - in registration Strong product in an expanding market
Oncology
Erbitux ® - in registration
Application submitted to EMA
First line therapy in NSCLC in combination with chemotherapy
NSCLC accounts for 80%–85% of all lung cancer cases.
Erbitux ® - Phase III
Gastric cancer in combinaition with chemotherapy – EXPAND
Erbitux + FUFOX : high response rate in metastatic gastric cancer.
Adjuvant treatment in stage III colon cancer - PETACC-8 
The final report with the official results of this trial is Dec.2014
Strong product in an expanding market

44. Oncology Cilengitide Stimuvax ® Cilengitide : the integrin inhibitors
Control tumor growth. Action : attacking the tumor cells directly in a targeted manner and stopping angiogenesis that feed the tumor.
Phase III : Cilengitide in glioblastoma CENTRIC
Estimated Primary Completion Date : Sept.2012 
Phase II : SCCHN & NSCLC
Stimuvax ®
Cancer immunotherapy that is designed to stimulate the body’s immune system to identify and target cells expressing MUC1.
Phase III : unresectable stage III NSCLC - START & INSPIRE
Estimated Primary Completion Date : Sept. 2015

45. Oncology
Phase I
In 2010, Merck KGaA signed a worldwide research and development agreement with Sanofi-Aventis U.S. Inc.
Two novel experimental combinations of the MEK inhibitor AS703026/MSC B with one of two compounds of sanofi-aventis.
PI3K/mTOR inhibitor SAR (also known as XL765), is under the responsibility of Merck Serono
Class I PI3K inhibitor SAR (also known as XL147), is under the responsibility of Sanofi-Aventis.

46. degenerative Diseases CardioMetabolic care and others
Therapeutic areas
Oncology
Neuro
degenerative Diseases
Fertility
Endocrinology
CardioMetabolic care and others

47. Neuro degenerative Diseases
Multiple sclerosis
MS is a complex, multifaceted disease of the central nervous system (CNS) with multiple pathways. Approximately 400,000 people in the U.S. have MS. (2.5 million worldwide)
MS interferes with the brain’s ability to control such functions as seeing, walking & talking. It is unpredictable and every person with MS will have his or her unique set of symptoms.

48. Neuro degenerative Diseases Rebif ® Interferon beta-1a
Rebif is indicated for the treatment of patients with relapsing forms of multiple sclerosis.
Rebif is a purified glycoprotein, which is produced by recombinant DNA technology using genetically engineered Chinese Hamster Ovary cells into which the human interferon beta-1a gene has been introduced.
Rebif decreases the frequency of clinical exacerbations and delays the accumulation of physical disability.
Rebif was approved by the U.S. FDA on March 7, 2002 is available in over 80 countries worldwide. Blockbuster with €1.7bn sales in 2010

49. Neuro degenerative Diseases
Rebif ® Perfect Life Cycle Management Strategy
Life cycle management improves patient convenience and protects key franchises

50. Neuro degenerative Diseases Rebif ® Ready-to-use syringes

51. Neuro degenerative Diseases Rebiject II ® auto-injector

52. Neuro degenerative Diseases RebiSmart® New Formulation

53. Neuro degenerative Diseases Rebif ® Major Competitors
Avonex (interferon beta-1a) is approved by the FDA to treat relapsing forms of MS. (Biogen Idec) It is the leading MS therapy in the US, with around 40% of the overall market, and in Europe, with around 30% of the overall market.
Betaferon/Betaseron is approved as monotherapy treatment for relapsing-forms of multiple sclerosis. (Bayer)
Tysabri is approved as monotherapy treatment for relapsing forms of multiple sclerosis. Administered by infusion (intravenous) (Biogen Idec and Elan )
Copaxone (glatiramer acetate injection) is indicated for the reduction of the frequency of relapses in relapsing-remitting multiple sclerosis. (Teva Pharmaceuticals)

54. degenerative Diseases CardioMetabolic care and others
Therapeutic areas
Oncology
Neuro
degenerative Diseases
Fertility
Endocrinology
CardioMetabolic care and others

55. Market position/ Strengths Gonal-F® Follitropin alpha for Injection
Fertility
Market position/ Strengths
Pioneer and market leader
Comprehensive portfolio of complementary products
Gonal-F® Follitropin alpha for Injection
The Gonal-f® RFF Pen is a gonadotropin hormone produced by recombinant DNA technology (rDNA).
It is used in ovulation induction (OI) and in vitro fertilization (IVF)

56. Fertility Luveris® lutropin alfa for injection
The first and only recombinant human luteinizing hormone (r-hLH) approved in the world
Cetrotide® cetrorelix acetate
Gonadotropin releasing hormone antagonist
Crinone® progesterone gel
Indicated for progesterone supplementation as part of an Assisted Reproductive Technology (ART)
Ovidrel® hCG
The first and only recombinant human chorionic gonadotropin (r-hCG)

57. degenerative Diseases CardioMetabolic care and others
Therapeutic areas
Oncology
Neuro
degenerative Diseases
Fertility
Endocrinology
CardioMetabolic care and others

58. Market position/ Strengths Saizen® somatropin for injection
Endocrinology
Market position/ Strengths
Among Top 5 in growth hormones
“only in class”products for selected niche indications
Saizen® somatropin for injection
Recombinant human growth hormone made by DNA technology.

59. Endocrinology Serostim® somatropin for injection
Indicated for the treatment of HIV wasting in patients receiving antiretroviral therapy
Egrifta® tesamorelin for injection
First treatment indicated to reduce excess abdominal fast in HIV-infected patients with lipodystrophy
Kuvan® sapropterin dihydrochloride
First treatment indicated in Europe for the treatment of hyperphenylalaninemia

60. degenerative Diseases CardioMetabolic care and others
Therapeutic areas
Oncology
Neuro
degenerative Diseases
Fertility
Endocrinology
CardioMetabolic care and others

61. CardioMetabolic care and others
Market position/ Strengths
Diabetes
Leading market positions with gold standard products that have high brand equity
Excellent track record in life cycle management (i. e. formulations)
Strong position in Emerging Markets
246 million people with type 2 diabetes around the world
Glucophage : 1st first-line treatment for type 2 diabetes
Glucovance
Metformine : was the Molecule of Merck
Cardiovascular diseases
CV diseases are responsible for one in every three deaths which translates into 17 million people worldwide each year  
Bisoprolol : 1st-line treatment of hypertension
Thyroid disease
200 million people worldwide suffer from hypothyroidism
20% of this population is currently receiving treatment
Levothyroxine sodium

62. CardioMetabolic care and others
Rheumatology
Atacicept - anti-BLyS/anti-APRIL fusion protein
Phase II : Systemic lupus erythematosus (SLE)
Phase I : Lupus nephritis
Fibroblast growth factor 18
Phase II : Cartilage injury
Phase I : Osteoarthritis
Partnership with BMS
Exclusive worldwide license to Merck Serono to develop and commercialize Fibroblast Growth Factor 18, and the genetic fusion molecule Atacicept.

63. Merck Serono’s future

64. Merck Serono’s future Strategy focus
Expand their fast growing presence in China and other Emerging Markets
Grow their U.S. business with specialist-focused therapies
Expand their ongoing presence in the Japanese market

65. Development programs discontinued Neuro- degenerative Diseases
Cladribine tablets for use in Multiple Sclerosis (Phase III)
Safinamide for treatment of Parkinson indications (Phase III)
New Formulation of Rebif in the U.S.
Oncology
Erbitux for use in metastatic triple-negative breast cancer (Phase II)
Clinical development for IMO-2055, currently in development for squamous cell carcinoma of the head and neck (Phase II)
Endocrinology
ARX-201 for use in growth hormone deficiencies (Phase II)

66. Redefining the R&D organization
New R&D Organization
One executive for separated R and D functions
Leaner organization with clear responsibilities on individuals rather than on committees.

67. Merck Serono’s future February 2012
Mendor signed a distribution agreement with Merck Serono for the meter Mendor Discreet ™
Merck Serono + Threshold = global agreement to co-develop and commercialize phase III Hypoxia-Targeted Drug TH-302

68. Merck Serono’s future April 2012 2012
To return all rights to Safinamide at Newron Pharmaceuticals SpA
But continue co develepment for Pruvanserine & Sarizotan
2012
Merck Serono will increase tenfold its annual donation of praziquantel tablets which will increase from 25 to 250 million units - schistosomia

69. Strategy for the future
Future growth trends
Future growth trend
Neurodegenerative Disease
7.9%
Oncology
24.2%
Fertility
5.9%
Endocrinology
8.9%
Cardiometabolic
Care/Others
5.5%
They want to become the leader in oncology by 2015 69

70. Merck Serono’s SWOT STRENG THS WEAKNESSES THREAT S OPPORT UNITIES
Erbitux ® standard of care
Rebif® performa nce benefiting from volume growth and price/Life cycle managem ent
New R&D hub in Beijing
Efficient patent cliff
Leader in fertility
Great reputation
WEAKNESSES
50% of sales held by Rebif® et Erbitux®
Failure in gaining regulatory approvals for
cladribine tablets
Lack of new products in the portfolio
Licence for Erbitux®
OPPORT UNITIES
Expand Merck Serono’s oncology pipeline and product portfolio
Several patenerships (BMS-Sanofi)
Possible expansion in Asia
THREAT S
Increasing competition from biosimilar
Increasing competition in multiple sclerosis-oncology market
Competitors=Avastin® for Erbitux® and Avonex®-Tysabri® for Rebif® 
Generics²

71. Thank you for your attention

72. Neuro degenerative Diseases Rebif ® Interferon beta-1a