Research spending by the new Merck Serono division nearly doubled in its first year of operation to €879 million, equivalent to 20% of the division’s total revenues. This percentage is above the global average for research-based pharmaceutical manufacturers. One of the objectives of the integration of the former Serono Group is to deploy R&D resources even more efficiently. Alongside Oncology, Merck Serono focuses on innovative specialist therapies for the treatment of Neurodegenerative Diseases such as multiple sclerosis and Parkinson’s disease, Autoimmune and Inflammatory Diseases and – under the heading Fertility – therapies designed to help infertile couples conceive. Development projects in Endocrinology are also part of the portfolio.
As part of the consolidation process, the division decided to reconsider the further investment in diabetes research and development and is seeking suitable partners to pursue these activities. Continued success in a competitive environment would have required additional measures in terms of research & development and marketing, of a scale similar to the establishment of a new business in this area. The rights to a drug candidate (GRC 8200) to treat type 2 diabetes were returned to Glenmark Pharmaceuticals of India. The required write-off amounted to €28 million.
Portfolio streamlining and realignment allows Merck Serono to utilize synergies between individual therapeutic areas.
Instead, Merck Serono is targeting resources toward reinforcing the leadership position already achieved in the division’s therapeutic areas. Realigning research and development opens up opportunities for synergies between the various therapeutic areas. An example is the recombinant fusion protein atacicept, which is being investigated both for oncology indications and for its potential in treating neurodegenerative diseases, autoimmune and inflammatory diseases.
Collaborations expand the portfolio
A multi-year agreement on the discovery, development and marketing of innovative aptamer-based cancer therapies was entered into with Archemix of Cambridge, Massachusetts, USA. Aptamers are a new class of drugs uniting the best properties of small molecules and antibodies. Unlike monoclonal antibodies such as Erbitux®, aptamers are synthesized chemically, which can bring significant cost benefits.
To advance the businesses successfully, Merck Serono is strengthening its partnering and licensing strategy. Examples are the strategic alliance with ZymoGenetics on the expansion of the pipeline for autoimmune and inflammatory diseases, and a cooperation agreement with École Polytechnique Fédérale de Lausanne in the fields of neurology, oncology and nanotechnology.
In addition, Merck entered into a worldwide licensing and collaboration agreement with Idera Pharmaceuticals, Inc. of Cambridge, Massachusetts for the research, development and commercialization of Idera’s Toll-like Receptor 9 (TLR9) agonists for the treatment of cancer. Toll-like Receptors (TLRs) function in human immune cells as the sensors of pathogens. Under the terms of the agreement, Merck has agreed to pay an upfront license fee of US$ 40 million to Idera.