Glossary

A company that is not included in the scope of consolidation due to its minor importance.

A collective term for similarly acting drugs that act as inverse agonists on the body’s beta receptors and thus inhibit the effect of stress hormones (notably, norepinephrine and epinephrine). They lower the heart rate and blood pressure, decrease the strength of heart beat, and reduce the heart’s excitability.

Abbreviation for tetrahydrobiopterin, a key coenzyme in amino acid metabolism. BH4 lowers the blood phenylalanine levels in patients with BH4-responsive phenylketonuria.

The term refers both to substances in the body and cell properties. Biomarkers can help doctors to identify a patient’s disease. Certain genes tend to play a role in the treatment of cancers, in terms of whether they are “normal” (wild type) or have undergone transformation (mutant). A predictive biomarker is a parameter or a status that can help to predict whether a patient’s disease, e.g. cancer, will respond to a certain treatment.

A biosimilar medicine is a biological medicine that is developed to be similar to an existing biological medicine (the ‘reference medicine’). Biosimilars are not the same as generics, which have simpler chemical structures and are considered to be identical to their reference medicines. The active substance of a biosimilar and its reference medicine is essentially the same biological substance, though there may be minor differences due to their complex nature and production methods. Like the reference medicine, the biosimilar has a degree of natural variability.

Capital spending as a proportion of sales.

Equals cash receipts minus cash payments over a given period of time.

European Chemical Industry Council.

Committee for Medicinal Products for Human Use: a scientific committee of the European Medicines Agency. It prepares the Agency’s opinions and handles the authorization and risk assessment of medicinal products.

A commercial paper program provides the contractual framework for the issuance of commercial paper, which is a short-term debt instrument issued by a corporation.

This term refers to compliance with laws and regulations as well as with voluntary codices that are internal to the Merck Group. Compliance is an element of diligent corporate governance.

This term covers compliance with laws and regulations; the application of recognized standards and recommendations; the development of and adherence to internal guidelines; as well as the creation and implementation of guideline and control structures.

Deutscher Aktienindex (German stock index): Its value is based on the stock prices of the 30 largest German companies by trading volume and free float market capitalization.

A debt issuance program provides the contractual framework for the issuance of bonds. Thanks to the current terms and conditions, the program allows the company flexibility when issuing bonds.

The ratio of the dividend per share to the share price.

Earnings per share are calculated as specified in IAS 33 by dividing the Group profit by the weighted average number of shares.

Earnings before interest and taxes on income. Equals the operating result.

Earnings before interest, taxes, depreciation and amortization: depreciation and amortization are added back to EBIT.

EBITDA before one-time items.

Epidermal Growth Factor Receptor: It is upregulated in various tumor types and/or present in mutated form, resulting in uncontrolled growth and replication of tumor cells. Novel cancer therapies are aimed at blocking EGFR’s oncogenic signal and hence stopping tumor growth.

European Medicines Agency: an official body of the European Union, headquartered in London. It is responsible for evaluating and monitoring medicines and plays a key role in the marketing authorization of medicinal products.

Indicator that shows equity capital in proportion to total capital, serving to evaluate the financial stability and independence of a company.

Food and Drug Administration: U.S. government agency responsible for protecting and advancing public health, especially as concerns food and drugs.

Financial figures stipulated in loan contracts to which the company must adhere during the duration of the loan.

First-line therapy is the first therapy that patients receive after having been diagnosed. If they do not respond or cannot tolerate first-line therapy, second-line, or in a further step, third-line therapy follows.

Film patterned retarder (FPR) technology is used in 3D displays and permits the concurrent presentation of two images. FPR technology can be used not only for liquid crystal, but also LED and OLED displays and cell phones. Reactive mesogens from Merck, i.e. polymerizable liquid crystals, are used in film patterned retarder (FPR) products.

Sum of the net cash flow from operating activities minus investments in intangible assets, property, plant and equipment, acquisitions as well as investments in other financial assets, plus proceeds from the disposal of assets and changes in securities.

Gross domestic product: The total value of all goods (products and services) intended for final consumption that are produced within a country’s borders in a given year.

Ratio of net debt including pension provisions to net equity.

Globally Harmonized System of Classification and Labelling of Chemicals. An international standard system to classify chemicals, including labels and safety data sheets.

Merck is working with the Global Grading System developed by Towers Watson, a market-focused method to evaluate company positions.

Goodwill arises when a company acquires another company and primarily represents the difference between the fair value of the acquired net assets and the purchase price paid.

Global Pharma Health Fund e.V. is a charitable organization funded by Merck. The organization’s goal is to promote health care within the scope of development assistance, especially with respect to the fight against counterfeit medicines through the use of the GPHF-Minilab®.

With the GPHF-Minilab®, the GPHF offers a unique mobile compact laboratory that is capable of testing the quality of medicines very quickly.

Most widely used accounting and reporting system for greenhouse gas emissions.

Protection against or limitation of certain clearly identified risks that might result from occurrences such as changes in foreign exchange rates or share prices. Fair value hedge: This primarily involves protecting against potential market value fluctuations of those assets and liabilities already recognized in the balance sheet. The primary purpose of a cash flow hedge is to protect against uncertain cash flows that especially result from future transactions.

International Council of Chemical Associations.

International Financial Reporting Standards (until 2001 known as International Financial Accounting Standards, IAS) are the standards that publicly traded companies must apply if their headquarters are domiciled in the European Union.

The International Monetary Fund, with headquarters in Washington, D.C., is a United Nations organization.

An interest rate swap is an agreement between two contractual parties to exchange various interest payments. Thus, a company can transform a variable interest item into a fixed interest item and vice-versa.

This international environmental management standard sets globally recognized requirements regarding an environmental management system.

This is a joint undertaking in which at least two legal, economically separate enterprises participate.

A biomarker that can show whether a patient with metastatic colorectal carcinoma is likely to respond to EGFR antibody therapy. This is done by testing the status of the KRAS gene in the tumor to see if it is normal (wild type) or abnormal (mutant). The KRAS acronym stands for Kirsten Rat Sarcoma.

A light-emitting diode (LED) is an electronic semiconductor device. When an electric current passes through it in the flow direction, it emits visible light, infrared radiation (IR diode) or ultraviolet radiation (UV diode). The wavelength of this depends on the semiconductor material used and the doping level.

These specialty chemicals are used in LC displays (LCD), for example, in flat-panel televisions, notebooks, mobile telephones, etc.

Lost time injury rate: indicator for workplace safety. The number of workplace accidents with one or more days of lost time per million hours worked.

An autoimmune disease linked to inflammatory rheumatic disease and classified as a collagen disease. There are two main types: lupus of the skin, and systemic lupus erythematosus (SLE). It may affect other organ systems apart from the skin and joints, e.g. the kidneys in lupus nephritis (LN).

Marketing and selling expenses as a proportion of sales.

Biologically active form of folate that occurs naturally in the human body and is utilized better by the body than folic acid. Folic acid and Metafolin® are important for cell division and blood formation and therefore the development and growth of new life.

Highly specialized targeted antibodies synthesized using biotechnological methods. What makes them special is their ability to activate the body’s natural mechanisms to fight disease. Monoclonal antibodies have mainly been used for cancer treatment and to suppress adverse immune responses.

Also known as PEM (polymorphic epithelial mucin), MUC1 is a glycoprotein group mucin embedded in cell membranes and occurring in all human organs. The MUC1 mucin is an established tumor marker. In oncology, this tumor marker is the starting point for several new cancer therapies.

A contract between a company and a bank (or several banks) under which the bank gives the company the possibility to access a predefined amount of money at certain conditions. Depending on the agreement, payment can be made in different currencies.

Organization for Economic Co-operation and Development, with headquarters in Paris, is a forum of 34 countries committed to the principles of democracy and market economy.

Organic light-emitting diodes. New technology for displays and lighting used, for example, in mobile telephones, MP3 players, and since recently also in televisions and lamps.

Organic growth is the part of a company’s growth that is not derived from acquisitions or currency effects.

Over-the-counter drugs is the term used for pharmaceuticals that are available at stores and pharmacies without a prescription.

In oncology, the amount of time between a patient’s enrollment in a clinical trial and disease progression or the patient’s death.

Provisions are set aside for liabilities whose amount or maturity are uncertain. Reserves, on the other hand, are part of a company’s equity.

Polymer-stabilized vertical alignment: A polymer layer pre-aligns the molecules inside the display in a certain direction. In the black state, the liquid crystals are not exactly vertical, but slightly tilted: This allows the liquid crystals to switch more quickly. The light transmittance of the display is significantly higher, thus reducing the backlighting, one of the most costly components to produce.

The purchase price allocation allows a company’s acquisition costs (purchase price) to be assigned to the tangible and intangible assets and liabilities that were acquired with it.

In medical research, randomization refers to the random assignment of subjects to treatment groups. The goal is to prevent the investigator from influencing the trial and to ensure that known and unknown influencing factors are distributed evenly across all groups.

REACH stands for the Registration, Evaluation, Authorization and Restriction of Chemicals. This is an EU regulation that entered into force in mid-2007.

Polymerizable liquid crystals that can be used, for example, as material for optical films. They help to enhance the display image quality.

In oncology, recurrent cancer means that the disease returns after it seems to have completely disappeared. This is often caused by the incomplete removal of the tumor.

Research spending as a proportion of the sales of the company or division.

A proteohormone occurring as a growth hormone in the human and animal organism. Somatotropin is essential to the achievement of normal height.

The tax rate indicates the percentage rate by which Group profit before tax is to be multiplied in order to calculate the theoretical tax expense.

The tax ratio indicates the ratio of total taxes to profit before tax.

Sum of sales as well as royalty, license and commission income. Royalties are earned primarily through patents held by the Merck Serono division.

Verband der Chemischen Industrie (German Chemical Industry Association) represents the economic-political interests of 1,600 German chemical companies.