Merck 2010 Annual Report Download - page 23
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projects and research alliances, but also to altered market conditions, which lead us to expect
lower sales than previously assumed. In 2010, we recorded EUR 25 million for exchange rate
gains, whereas in 2009 we recognized exchange rate losses of EUR 7 million. Research and
development costs increased by 3.9% to EUR 1,397 million. Thus, the ratio of R&D expenses
to total revenues was 15% compared to 17% in 2009.
EUR million
1,400
1,050
700
350
2006* 2007 2008 2009 2010
Chemicals Pharmaceuticals
Amortization of intangible assets, which previously related mainly to the Serono purchase price
allocation, now also include amortization of the intangible assets identified within the scope of
the purchase price allocation for Millipore. These are mainly customer relationships and tech-
nologies as well as trademarks and brands, which are amortized over a period of 8 to 17 years.
Consequently, depreciation and amortization rose significantly, totaling EUR 96 million for
the Merck Millipore division. This item also includes expenses for amortization of intangible
assets resulting from the previous Serono purchase price allocation. Due to a reassessment of
the potential future sales for safinamide, we recorded an impairment of EUR 134 million to
a residual value of EUR 63 million. This reassessment was based on the results of a Phase III
study conducted by our development partner Newron. The results led to a reassessment of
the market potential especially with regard to the achievable indications. In addition, the new
valuation covers a delay in the project as well as an increase in R&D costs owing to increased
regulatory requirements.
Overall, the operating result of the Merck Group amounted to EUR 1,113 million, corresponding
to an increase of 72% over 2009.
Group operating result
increases by 72%
Company 19Management Report Corporate governance Consolidated Financial Statements More information
Financial position and results of operations