Increasing competition in the market for multiple sclerosis (MS) drugs hit Merck Serono in the third quarter, dragging sales down 1.8 per cent to €1.48bn.
Sales of flagship MS treatment Rebif (interferon beta-1a) fell 3.4 per cent to €460m as competition from new orally-active treatments such as Biogen Idec’s Tecfidera (dimethyl glutamate) started to have an impact, but there was a solid performance for cancer drug Erbitux (cetuximab), up 8 per cent to €223m.
The top-line figures disguise a transformation in Merck Serono’s underlying financial performance though. Restructuring efforts – including the closure of its Geneva headquarters and the loss of 500 jobs – helped operating profits at the biopharmaceutical division climb nearly 8 per cent to €501m and margins firmed to 33.8 per cent from 30.8 per cent a year earlier.
All told, Merck Serono has trimmed nearly 9 per cent – equivalent to €46m – off its third-quarter sales and admin costs compared to the same period of 2012.
“This repeatedly strong result illustrates once again that the transformation of our company is well on track,” commented Merck chairman Karl-Ludwig Kley.
“Merck is already stronger today and more profitable than when it started the change process a few years ago,” he added.
Matthias Zachert, chief financial officer of Merck Serono parent Merck KGaA, noted that the biopharma unit enjoyed “solid organic sales growth of 5 per cent” – driven by emerging markets and Japan – which was overshadowed by exchange rate factors and the loss of €30m-worth of royalty income on sales of Biogen Idec’s MS drug Avonex (interferon beta-1a) in the quarter.
Among its other products, sales of Merck Serono’s fertility treatment Gonal-f (follitropin alfa) slipped fractionally to €137m while growth hormone Saizen (somatropin) brought in €61m, in line with one year earlier.
There were gains for beta blocker Concor (bisoprolol) – up nearly 20 per cent to €100m – while Glucophage (metformin) for diabetes continued to perform well with an 8 per cent rise to €98m.
Merck Serono’s solid performance was mirrored by the group as a whole, which posted a 3 per cent decline in revenues to €2.75bn accompanied by a 10 per cent hike in operating profit to €831m.
For full-year 2013, the group still expects sales to come in between €10.7bn and €10.9bn, but it has raised profit forecasts to €3.2bn-€3.25bn an earlier estimate of €3.1bn-€3.2bn.