At € 1,225 million, research and development spending in 2011 was 5.0% higher than in 2010. This was partly due to the continued high number of costly trials in late-stage clinical development. We operate research centers in Europe, the United States and Asia. This allows us to optimally exploit strong local networks and ensures diversity. The pipeline comprises eleven programs in Phase I clinical trials, seven in Phase II and five in Phase III.
Oncology, multiple sclerosis and immune system-related disorders are our key areas of focus. In addition, we continue to conduct product development in Fertility and Endocrinology. We intend to increasingly apply our strengths in biotechnology to immune-related diseases and explore new indications in this area.
In order to balance our presence globally, we are increasing our R&D activities in the United States and China. We expanded our engagement in the Beijing area through a strategic partnership with Pharmaron and opened an R&D laboratory on the Pharmaron campus in August 2011. As of December 31, 2011, around 2,850 people worked for the research and development function of the Merck Serono division.
To meet the growing demands on pharmaceutical companies, we are realigning our R&D organization. Research and Early Development was separated from late-stage Development and Medical. The transition between the two takes place at “proof of confidence,” when the available data is sufficient to justify significant investment in further clinical development. Our aim is to create an agile, flexible and innovative organization for research and early-stage development, strongly supported by scientific networks and focusing on translational science and medicine. In late-stage clinical development, we are aiming to ensure that standardized processes run reliably, effectively and in compliance with the highest quality standards in order to enhance our chances of satisfying the requirements of regulatory authorities for drug approval.
We worked further to build a collaborative scientific enterprise in 2011, investing specifically in partnerships with pharmaceutical companies, small biotech firms as well as academic institutions. Having the appropriate tools is one of the levers in the discovery of new medicines and we are therefore engaging in new technologies.
In 2011, we further expanded our relationship with Ablynx and entered into a third agreement to co-discover and co-develop Nanobodies® against two targets in osteoarthritis. Nanobodies® are a novel class of antibody-based therapeutic proteins that combine the advantages of antibodies with those of small-molecule drugs. The agreement with F-Star is another example of our engagement in new technologies. Here our intention is to discover new antibody-derived therapeutics against inflammatory disease targets, using F-Star’s modular antibody technology. We initiated our relationship with F-Star in 2010 through Merck Serono Ventures, our corporate venture capital fund.
In 2011, we set up the Merck Serono Israel Bioincubator Fund, a strategic and corporate initiative targeting Israeli biotechnology start-ups. The fund will offer both seed financing and the opportunity to use certain labs at Merck Serono’s Israeli R&D center. We will commit a total of € 10 million to the program over a seven-year period.
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