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16 | Merck Annual Report 2008
the goodwill of € 42 million of our former subsidiary Lexigen subsequent to the termi-
nation of the relevant research projects. In 2008, we discontinued the development of a
high-dose recombinant human growth hormone for HIV-associated adipose redistribu-
tion syndrome (HARS) and wrote off in full the intangible assets that had previously
been capitalized at € 20 million in this connection.
We booked write-downs of € 29 million for financial assets due to lasting declines
in share prices. The Merck Serono division incurred charges totaling € 26 million in
connection with the restructuring of its sales force in various European countries.
The Chemicals business sector restructured the Performance & Life Science Chemicals
division at its sites in the United States and Brazil. Merck recognized expenses of € 46
million as exceptional items in this connection.
In 2007, exceptional items related mainly to write-downs of inventories, which were
remeasured within the scope of the Serono purchase price allocation.
Sharp decline in interest expenses
The financial result for 2008 was € –156 million compared to € –311 million in 2007,
which was mainly attributable to interest payments for the Serono acquisition. Proceeds
from the sale of the Generics business, which were booked in the fourth quarter of 2007,
were used to lower financial liabilites. As a result, Merck could considerably reduce
its interest expenses in 2008. In 2008, exchange rate differences lowered the financial
result by € –18 million, while in 2007, we had booked exchange rate gains of € 9 million.
In 2007, we sold the Generics business to Mylan Inc. and reported it under Discon-
tinued operations in the Group financial statements. As part of the divestment agree-
ment, Mylan received an option to purchase the rest of the business that remained with
Merck after the transaction closed. To date, this business has not been transferred to
Mylan. It is immaterial for Merck and is reported as part of the Merck Serono division
since 2008.
Divestment of Generics helped
lower financial liabilities.
Operating result by business sector*
€ million
2004 2005 2006 2007 2008
1,600
1,200
800
400
Laboratory
Distribution
Chemicals
Pharmaceuticals
655
54%
558
46%
Operating result by business sector*
€ million
*excluding Corporate and Other *excluding Corporate and Other