Business strategies of the divisions Audited

Merck Serono

Merck Serono aims to become a preferred global biopharmaceutical partner, providing innovative specialty medicines, leading brands, and high-value solutions. Global megatrends such as world population growth and a general increase in life expectancy are bolstering the demand for our products. The aim is to grow at least in line with the global pharmaceutical market.

Innovative drugs are the key to competing in mature markets, which remain the largest and most profitable markets for our products. In addition, we will use customized products and dosage forms to systematically capture the growth potential of emerging markets in order to further expand our leading position in key cardiometabolic diseases mainly based on our General Medicine products such as Glucophage®, Concor® and Euthyrox®.

The division continues to focus on the therapeutic areas of Oncology, Multiple Sclerosis, Fertility and General Medicine.

In Oncology, Merck launched the Erbitux® Reloaded program, the strategic focus of which is on building on the existing business to expand market share and to ensure market leadership in first-line therapy of metastatic colorectal cancer in patients with KRAS wild-type tumors. Based on the results of the FIRE 3 study as well as further retrospective analyses of pivotal trials, Merck Serono is emphasizing the importance of offering patients complete testing for RAS status in order to ensure optimum treatment. In Multiple Sclerosis, the vision is to remain a leader by providing innovative solutions that include drugs, devices and services to help people living with multiple sclerosis. Merck Serono plans to fully exploit the potential of Rebif®, its top-selling product, in an increasingly competitive multiple sclerosis market and to position it as the best interferon-based therapeutic option for patients who suffer from the relapsing form of the disease. Merck Serono intends to further expand its market leadership in Fertility especially by leveraging the comprehensive portfolio of products and life cycle management activities, and by capturing growth opportunities in emerging markets. In General Medicine, Merck Serono will focus on further boosting its efforts in emerging markets and enhancing the life cycle management of its products. In addition, Merck Serono intends to continue to strengthen its current portfolio through suitable partnerships.

China and Brazil are key growth markets for the division. Merck Serono wants to step up its activities in these countries by 2018. At the same time, Merck Serono intends to further expand its activities in North America. The division is therefore examining potential business models such as alliances, acquisitions of start-ups as well as the launch of new products..

Consumer Health

In 2012 and 2013, the Consumer Health division undertook steps to strategically realign the internal organization while sharpening its focus on core brands and particularly attractive key markets. As of 2014, Consumer Health intends to push ahead with its growth agenda, particularly in emerging markets of Latin America and Southeast Asia. To this end, the division is pursuing a clear strategy: The aim is for Consumer Health to achieve a market share of at least 3% by 2021 in each of the division’s top 20 markets (including France, Mexico, Brazil, Germany and the United Kingdom), with at least three brands in leading positions. An important milestone within the framework of this strategy will be the transfer of the Neurobion® and Floratil® brands from the Merck Serono to the Consumer Health division in 2014. Neurobion® is a leading global brand in the vitamin B segment and Floratil® is a leading brand in the probiotic antidiarrheal segment in Brazil. Their transfer to Consumer Health will allow a stronger focus on consumer needs. As a consequence, the emerging markets exposure of Consumer Health will increase from 28% in 2013 to 51% in 2014, and Consumer Health will also increase the market share of the division in key markets such as Brazil, Mexico, India and Indonesia.

Performance Materials

The demand for high-tech products in general and for innovative display solutions in particular has seen high global growth in recent years. Nor is this trend expected to weaken in the coming years. Instead, Merck assumes that there will be increasing demand for these types of consumer goods from a growing middle class in emerging markets. Therefore, Performance Materials will defend its position as the market and technology leader for liquid crystals and further expand it as far as possible.

Since the typical life cycle of liquid crystal mixtures is less than three years, innovation will remain the key success factor. The liquid crystals pipeline is well-stocked with new technologies such as self-aligned vertical alignment (SA-VA), advanced fringe field switching (FFS) as well as projects beyond displays. The division wants to further position itself in the OLED market and play a leading role in this market segment in the medium to long term. Lower production costs for OLED displays are a precondition for this. External partnerships will also be used in the future to ensure the required exchange of technology and expertise.

In addition, the planned acquisition of AZ Electronic Materials and the resulting combination of two research and development teams will lead to further innovative solutions for customers in the electronics industry.

Within its Pigments & Cosmetics business unit, Merck will continue to focus on customers as well as the effect pigments business and selected technology segments in the functional materials business.

Merck Millipore

In order for Merck Millipore, the life science tools division of Merck, to continue to outperform its peers, the division is pursuing various strategic approaches. Merck Millipore will maximize the potential of the combined portfolio, drive market share growth in North America, Asia and Latin America, and increase sales generated by new products. The division’s profitability is to improve by globalizing the entire portfolio and reducing organizational complexity. Merck Millipore will secure operational excellence by implementing systems such as Enterprise Resource Planning (ERP), delivering the highest standard of customer service, and cultivating talent in the organization. These measures are to be fully implemented by 2017.