Merck 2008 Annual Report Download - page 97

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[10] Exceptional items
Exceptional items comprise:
€ million 2008 2007
Impairment losses on product technologies –194.5 –
Impairment losses on licenses –42.9 –
Impairment losses on goodwill –41.7 –
Impairment losses on development technology –20.2 –
Impairment losses on financial assets –29.2 –
Restructuring –71.5 2.0
Write-down of Serono inventories – –734.0
Environmental protection measures – –38.5
Disposal of the Genmab interest – –11.5
Release of the provision for Electronic Chemicals – 6.4
Exceptional items –400.0 –775.6
The product technologies capitalized for the product Raptiva® within the scope of the
Serono purchase price allocation were written off in full due to a sharp decline in
sales expectations.
Based on new estimations of the amount and timing of royalty income, we partially
wrote down the relevant licensing rights to Enbrel® (Amgen), which were capitalized
within the scope of the Serono purchase price allocation.
In connection with the termination of research projects, the goodwill resulting from
the acquisition of the EMD Lexigen Research Center Corp., United States, was written
off in full. This relates to the Merck Serono division.
The assets relating to technology and research know-how that were capitalized
within the scope of the Serono purchase price allocation for the development of a
high-dose recombinant human growth hormone for the indication HIV-associated adi-
pose redistribution syndrome (HARS) were written off since the development of this
indication has been terminated.
Write-downs of financial assets were made owing to the decline in the stock market
value of the interest in ZymoGenetics, Inc. These were charged to the Merck Serono
division.
Exceptional items for Restructuring relate on the one hand to closures and busi-
ness disposals amounting to € –45.9 million within the Performance & Life Science
Chemicals division and concern sites in the United States and Brazil. In addition, in
the Merck Serono division we recognized expenses of € 25.6 million in connection
with the restructuring of the sales force in a number of European countries.
92 | Merck Annual Report 2008