Biosimilars were ‘plan B,’ says portfolio pumped Merck KGaA

By Dan Stanton contact

- Last updated on GMT

Germany's Merck is in negotiations to sell its biosimilar division. Image: iStock/wildpixel
Germany's Merck is in negotiations to sell its biosimilar division. Image: iStock/wildpixel
Germany's Merck has confirmed it is divesting its biosimilars division in order to concentrate on its innovative product pipeline.

There was some speculation that Merck was looking to offload its biosimilars business last November, and yesterday the Darmstadt, Germany-headquartered Big Biopharma confirmed it was in sale negotiations.

“We entered the sector of biosimilars at a time when our pipeline wasn’t really good and it was a good decision at the time,”​ CEO Stefan Oschmann said during a press conference to discuss end-of-year results.

“Our biosimilar division has seen some good developments but we can see now that our pipeline in total is very good and so we have to find some priorities, and we think our core business is better in the field of innovative products. For this reason we intend to sell our biosimilar business.”

While he added Merck has made “great progress”​ in its negotiations, he refused to give further the details about a potential sale. “We can assume that this going to be a complex deal and the impact on individual employees, I cannot say anything on that.”

The unit was set-up in 2012 in Canton de Vaud, Switzerland, with the firm saying at the time it intended to leverage the nearby biologics manufacturing facilities in Aubonne and Corsier sur Vevey to support the business.

However, Merck’s pipeline (see below) has come on since then and the firm discussed potential commercial products set to support the three products which clock in over €500m annually – Rebif, Erbitux and Gonal-f – during a follow up investor call yesterday.

 

Merck 2017 pipeline
Merck's pipeline

“In a way us getting into biosimilars was a plan B,”​ Oschmann reiterated. “And the fact that we are now focusing on our innovative pipeline, we ourselves interpret this as a sign of confidence.”

Over €400m invested

Merck's interest in biosimilars grew further in 2012 when the firm established a partnership with Dr. Reddy’s to co-develop a portfolio of oncology biosimilars in oncology.

In 2014 the company also partnered with Bionovis to develop biosimilars for the Brazilian market, and in a separate deal made an in-licensing agreement for a late-stage biosimilar​ details of which have not been disclosed. The following year​, more biosimilars were added to the pipeline.

In 2014, it invested €100m ($111m) into the unit, and pledged a further €130-150m for the following year to support Phase II trials of a version of AbbVie’s best-selling monoclonal antibody Humira (adalimumab).

And during yesterday’s press conference, Oschmann said biosimilar research spend in 2016 on amounted to around €100m.

The firm is yet to have generated any sales from the unit.

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