Historically at Merck Serono, both the length and costs of all stages of clinical development were higher than industry average. In response to this, Merck Serono is striving to both speed up drug development and make it more cost efficient. In order to achieve this, the organization is in the process of simplifying its structure, reducing the number of decision-making bodies and outsourcing certain functions and tasks. A net decrease in R&D costs by € 120 million by 2014 is planned. Processes are underway to shift relative spending away from fixed costs towards mainly project-related expenditure in order to increase the value of the pipeline and its output.
In order to improve the interface with scientists, clinicians and regulators worldwide, the division is increasing its focus on North America and Asia by further developing the R&D hubs in Boston (United States), Beijing (China) and Tokyo (Japan). At our R&D headquarters in Darmstadt, Merck Serono will continue to build upon the legacy of strength in areas such as oncology and immunology. In North America, Merck Serono will build upon its current Boston footprint at EMD Serono in Rockland, Massachusetts as well as developing the new state-of-the-art research facility in Billerica, Massachusetts. The three global R&D hubs of the division will optimize the ability to deliver innovative science and medicines globally and importantly will enhance the ability to attract and grow biopharma talent for the future development of the Merck Serono division.
Research at Merck Serono is strongly committed to innovation. In the new structure, teams are given enhanced freedom to operate. The cost structure is being adapted in order to free up resources for projects. A Scientific Peer Review process has been put in place in the form boards of external advisors in order to discuss, challenge and thereby improve research projects and plans. To broaden its capabilities, Merck Serono will continue to expand its external networks beyond the many collaborations it already has in place.
Oncology remains the key pillar of Merck Serono’s research strategy, focusing on differentiated molecules in selected clusters both in solid tumors and hematological malignancies. The division also aims to leverage novel-novel combinations and it will continue with its biomarker strategy in order to drive personalized health care solutions. Immuno-Oncology has the potential to strengthen the existing oncology pillar by adding innovative treatment approaches like therapeutic cancer vaccines and immunomodulation. A medical consortium made up of world-class centers offering access to state-of-the-art clinical development in this field has been established.
Multiple sclerosis (MS) remains an important focus area in which Merck Serono has extensive development expertise; however, other neurological disorders are also being investigated depending on the unmet medical need they represent and their strategic fit. Merck Serono will continue to use innovative ideas whether internally or externally generated, through collaborations like Fast Forward™ (founded by the National Multiple Sclerosis Society, USA) with smaller biotech companies, as well as the recently announced Grant for MS Innovation with academia.
Given its in-house expertise in the field of immunology and perceived scientific opportunities Merck Serono plans to establish the study of immune-mediated diseases as a significant new pillar of its research strategy.
In April 2012, Merck Serono launched the Entrepreneur Partnership Program (EPP) to support former employees in the creation of start-up companies focused on continuing activities and compounds that originated at Merck Serono. During 2012, more than eighty proposals were assessed. Four viable endeavors were approved, including small companies founded around pre-clinical work in Alzheimer’s and Parkinson’s disease. Selected investments will be managed by Merck Serono Ventures, which will be represented on each of the companies’ board of directors.
The Global Development and Medical function aims to become globally competitive on productivity, value, cost and speed in conducting clinical development. Merck Serono aims to attract and retain key talents to build up world class capabilities. Simplified processes are being put in place in compliance with highest quality standards in order to improve efficiency. Consolidated worldwide regulatory, safety, quality and clinical operation functions are being implemented and a lean and flexible organization well connected with all relevant external stakeholders is being built. Merck Serono aims to increase the value of its development pipeline and become more efficient and effective at developing new products.
Biosimilars, which according to IMS Health will represent a strongly growing market of US$ 11 billion to US$ 25 billion by 2020, aim to be similar to marketed biological drugs. In contrast to classic generic drugs, which are made from relatively easily duplicated chemical-based active ingredients, biosimilars are much more complex molecular structures and usually differing slightly from the original. As a result their development, manufacturing and approval processes are much more demanding and complex. Merck Serono aims to participate in this growing market, by taking advantage of its biopharmaceutical expertise in the area of development, regulatory and manufacturing. In 2012, Merck Serono and Dr. Reddy’s Laboratories announced that the two companies will collaborate to jointly develop and globally market follow-on biologics, with a primary focus on monoclonal antibodies. The strategic rationale of this collaboration is to leverage Merck Serono’s biopharma strengths with Dr. Reddy’s strong expertise in biosimilars.
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