Merck Serono: The Power of Two - Pharmaceutical Executive


Merck Serono: The Power of Two
When Merck KGaA and Serono merged last September, some said it was a shotgun wedding, while others called it a good fit. Now that the honeymoon is over, Pharm Exec takes the measure of the match.

Pharmaceutical Executive

EMD Serono's innovative specialty marketing may be a partial bulwark against the encroaching threat of biosimilars. Already authorized in Europe, follow-on biologics increasingly appear to be a fait accompli in the United States, although serious concerns over their efficacy and safety may stall legislation for a year or two. For biopharmas like Merck Serono, there are also serious concerns about innovator exclusivity.

Firouz is an engaged but fair-minded partisan on the issue. "My position is not that we should not have follow-on biologics. But in order for them to be a realistic and viable option for patients, two things need to happen," he says. "First, any company producing biosimilars needs to run the proper clinical trials. Second, the innovators, like Merck Serono, need proper incentives in order to keep up our intensive, high-risk investment in the next wave of innovation. Because, ultimately, what we are here for is to come up with cures."

It is not every day that a pharma leader talks passionately about patient support and cures for disease. As for the bottom line, Merck Serono's second-quarter filings record pharma sales rising 11 percent against last year's, with Rebif up 8.2 percent to a record $420 million for the quarter and Erbitux jumping 44 percent to $156 million. It saw its first drug go to market since the merger—Pergoveris, the first-ever recombinant combo to stimulate fertility. If its late-stage pipeline pans out, Merck Serono could be launching new drugs for major diseases like MS and Parkinson's as well as several treatments for small, but serious, unmet medical needs.

Conventional wisdom has it that the failure rate of mergers—in terms of achieving greater-than-average productivity, not to mention intended goals—is slightly less than that of marriages, about 50 to 80 percent. But based on the bottom line, at year one, it looks like Merck Serono may beat the odds.


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