Marketing and selling expenses rose slightly by 3.0% to EUR 468 million. Royalty and commission expenses rose by 26% to EUR 122 million mainly due to increased sales of the multiple sclerosis drug Rebif® in the United States and the cancer treatment Erbitux® in Japan. In 2010, Merck began reporting royalty and commission expenses separately in the income statement. In the past, these expenses were reported under marketing and selling expenses.
Administration expenses decreased by 2,4% to EUR 104 million compared to the first quarter 2009.
Other operating expenses and income rose by EUR 50 million to EUR –135 million. These mainly include EUR 24 million of transaction costs related to the planned acquisition of Millipore Corporation, Billerica, Massachusetts, United States. Also included are impairments on intangible assets due to termination of research alliances.
Research and development costs rose by 11% to EUR 347 million in the first quarter. A major element of the Merck business model is a focus on new, high-value products and solutions, which naturally require a greater investment in R&D. The Merck Serono division currently has a large number of expensive late-stage clinical trials underway. These are necessary to prove to regulatory authorities that a medicine is safe and effective.
Amortization of intangible assets, mainly stemming from the purchase of Serono in 2007, decreased by 4.7% to EUR 141 million mainly due to the impairment made in the fourth quarter of 2009 for licensing rights and the expiration of the amortization period for an intangible asset.