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Merck mulls sale of consumer health division

The German pharma group will focus on its science and technology businesses

Merck KGaA

Merck KGaA says it is thinking about selling or partnering its consumer healthcare unit, narrowing its healthcare focus to biopharma development.

The German pharma and chemicals group said it is considering a full or partial sale of the business, as well as strategic partnerships, as it continues its drive towards an "innovation-driven … science and technology company".

If it goes through, a sale would mark a big departure for the traditionally conservative, family-owned group, which has often cited its diversified focus as a key element of its strategy. It's been bulking up of late in some areas - including research tools with its recent purchases of Sigma-Aldrich and Millipore - and jettisoning others including biosimilars.

Merck's consumer health unit made €450m in sales in the first half of the year, up 5% from €427m in the same period of 2016, driven by key brands Neurobion, a vitamin B supplement, and nasal decongestant Nasivin. The unit made €860m in sales last year.

Merck said its consumer health unit has been "continuously enhanced" in recent years, for example with the opening of a brand new €7.5m tablet manufacturing facility for its consumer health unit in Spittal, Austria, boosting its production capacity by more than a third to 3 billion tablets a year.

"We have maintained a solid position in attractive markets, and demonstrated a pattern of profitable growth," said Belén Garijo, executive of Merck Healthcare. However, he said the company expects "increasing internal constraints to fund the business to reach the required scale".

The news comes a few days after Merck picked up an important new approval for its pharma division in Europe, with the EMA clearing Mavenclad (cladribine) for the treatment of highly-active relapsing multiple sclerosis.

It has been suggested that hiving off consumer health would help management focus on the launch of Mavenclad as well as the roll-out of Pfizer-partnered cancer immunotherapy Bavencio (avelumab) for Merkel cell carcinoma (MCC), which was recommended for approval in the EU in July.

Article by
Phil Taylor

5th September 2017

From: Sales

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