Affiliate
A company that is not included in the scope of consolidation due to its minor importance.
Biomarkers
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.
Biosimilars
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.
Business free cash flow
This key performance indicator is equivalent to EBITDA pre one-time items less (1) investments in property, plant, equipment and software, (2) changes in inventories, as well as (3) changes in accounts receivable trade as reported in the balance sheet.
Cash flow
Equals cash receipts minus cash payments over a given period of time.
CHMP
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.
Commercial paper program
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.
Compliance
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.
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.
DAX ®
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.
Debt issuance program
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.
Earnings per share
Earnings per share are calculated as specified in IAS 33 by dividing the Group profit by the weighted average number of shares.
EBIT
Earnings before interest and taxes on income. Equals the operating result.
EBITDA
Earnings before interest, taxes, depreciation and amortization: depreciation and amortization are added back to EBIT.
EBITDA pre
EBITDA before one-time items.
EGFR
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.
EMA
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.
Equity method
The basic idea behind the equity method is to present the carrying amount of the equity investment in the investor’s balance sheet so that it mirrors the development of the proportional share of equity in the investment.
FDA
Food and Drug Administration: U.S. government agency responsible for protecting and advancing public health, especially as concerns food and drugs.
Financial covenants
Financial figures stipulated in loan contracts to which the company must adhere during the duration of the loan.
First, second and third line therapy
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.
Free cash flow
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.
GDP
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.
GHS
Globally Harmonized System of Classification and Labelling of Chemicals. An international standard system to classify chemicals, including labels and safety data sheets.
Global Grade
Merck is working with the Global Grading System developed by Towers Watson, a market-focused method to evaluate company positions.
Goodwill
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.
GPHF
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™.
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.
Greenhouse Gas Protocol
Most widely used accounting and reporting system for greenhouse gas emissions.
Hedging
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.
ICCA
International Council of Chemical Associations.
IFRS
International Financial Reporting Standards (until 2001 known as International Accounting Standards, IAS) are the standards that publicly traded companies must apply if their headquarters are domiciled in the European Union.
IMF
The International Monetary Fund, with headquarters in Washington, D.C., is a United Nations organization.
Interest rate swap
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.
KRAS
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.
LED
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.
Liquid Crystals (LC)
These specialty chemicals are used in LC displays (LCD), for example, in flat-panel televisions, notebooks, mobile telephones, etc.
LTIR
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.
Lupus erythematosus (LE)
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).
Monoclonal antibodies
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.
MUC1
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.
Multi-currency credit facility
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.
Net current assets
Current assets less current liabilities.
Net present value
This parameter is based on the discounted cash flow method and is calculated as the sum of the discounted free cash flows over the projection period of a project. Consistent with the definition of the free cash flow, the weighted average cost of capital is used as the discount rate.
OLED
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
Organic growth is the part of a company’s growth that is not derived from acquisitions or currency effects.
Progression-free survival
In oncology, the amount of time between a patient’s enrollment in a clinical trial and disease progression or the patient’s death.
Provisions/reserves
Provisions are set aside for liabilities whose amount or maturity are uncertain. Reserves, on the other hand, are part of a company’s equity.
PS-VA
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.
Purchase price allocation
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.
Randomized study
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
REACH stands for the Registration, Evaluation, Authorization and Restriction of Chemicals. This is an EU regulation that entered into force in mid-2007.
Recurrent
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 ratio
Research spending as a proportion of the sales of the company or division.
Schistosomiasis
Schistosomiasis is a parasitic disease that is spread in warm lakes and ponds by snails that serve as intermediate hosts.
Tax rate
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.
Tax ratio
The tax ratio indicates the ratio of total taxes to profit before tax.
Total revenues
Sum of sales as well as royalty, license and commission income. Royalties are earned primarily through patents held by the Merck Serono division.
VCI
Verband der Chemischen Industrie (German Chemical Industry Association) represents the economicpolitical interests of 1,600 German chemical companies.