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. [...]

Merck aspires to be a successful player in the pharmaceutical, life science tools and speciality chemicals industries, with leading positions in attractive segments of these markets. To achieve this, we are building on our leading brands in all four of our divisions in order to create a revenue stream that, in our current understanding, is widely protected from economic cycles. Furthermore, Merck has a solid market position in the Emerging Markets shown by a high exposure of more than one-third of Group sales. Current and future investments are targeted to benefit from future volume growth in the Emerging Markets. Merck is in the midst of a transformation, which [...]

During the year, the main operational focus was on implementing the new organizational structure of Merck Serono in R&D, which now comprises two major functions. The Global Research and Early Development function is responsible for projects in discovery and pre-clinical stages through to Proof of Confidence, when the available clinical data are judged sufficient to justify significant investment in large-scale clinical development. In this function teams are clustered around certain therapeutic areas as well as platform technologies. The Global Development and Medical function is responsible for the late-stage clinical development of products, managing their [...]

[...] 2006; Member of the Executive Board since September 2006 Responsibility for Group functions: Group Strategy; Group Communications; Group Legal & Compliance; Group Internal Auditing Bernd Reckmann Responsible for the Performance Materials and Merck Millipore divisions Born in 1955, biochemist; Joined Merck in 1986; Member of the Executive Board since 2007 Responsibility for Group functions: Environment; Health; Safety; Security; Quality Stefan Oschmann Responsible for the Merck Serono and Consumer Health divisions Born in 1957, veterinarian; Joined Merck in January 2011 as a Member of the Executive Board Responsibility for Group functions: Patents & [...]

[...] the markets differ in their structure and economic cycles. This is also an expression of the Merck strategy to remain an integrated pharmaceutical, chemical and life science company. Political and regulatory risks As a global company, Merck faces political and regulatory changes in many countries and markets. In 2012, increasingly restrictive requirements were imposed in the pharmaceutical environment in terms of drug pricing, reimbursement and approval, a trend that can be seen in many countries. These requirements can negatively impact the profitability of our products and jeopardize the success of market launches and new approvals. Close communication with [...]