Merck 2010 Annual Report Download - page 52

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Sales by the Merck Serono division grew far more strongly than the fore-
casted average for the pharmaceutical industry. Nearly two-thirds of this
growth is attributable to the biopharmaceuticals Rebif ® and Erbitux ®.
In 2010, the Merck Serono division increased total revenues by 7.6% to EUR 5,754 million. Sales
increased by 8.3%, with positive currency effects accounting for 2.6% of the increase. This
excellent growth, which exceeded the sector average of 4% to 5% estimated by IMS Health,
was once again due to the success of our biopharmaceuticals. We generated EUR 3,288 million
or 61% of our sales with our five top-selling biopharmaceuticals Rebif ®, Erbitux ®, Saizen ®,
Gonal-f ® and Serostim ®. Rebif ®, a treatment for relapsing-remitting multiple sclerosis,
was once again the top-selling product, with sales increasing by 8.6% to EUR 1,668 million.
Erbitux ®, our targeted cancer therapy, posted another double-digit increase in sales, which
rose by 18% to EUR 820 million. In March, Erbitux ® received approval in the key market of
Japan for extended usage in combination with chemotherapy for the first-line treatment of
metastatic colorectal cancer (KRAS wild-type tumors). Cladribine tablets (brand name Movectro ®)
were approved in Russia in July, becoming the world’s first oral disease-modifying treatment
for relapsing-remitting multiple sclerosis. Approval in Australia followed in September. In
November, the U.S. Food and Drug Administration granted approval of Egrifta™ (tesamorelin
for injection) to reduce excess abdominal fat in HIV-infected patients with lipodystrophy.
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EUR million / % of divisional sales
1 Rebif ® 1,668 31%
2 Erbitux ® 820 15%
3 Gonal-f ® 504 9%
4 Concor ® franchise 373 7%
5 Glucophage ® franchise 316 6%
6 Other products 1,727 32%
At EUR 344 million, royalty, license and commission income was slightly below the previous
year’s level. In comparison with 2009, the division’s gross margin increased by 6.9% to
EUR 4,793 million. Due to strong exchange rate effects and investments in new products and
emerging markets such as China, marketing and selling expenses were 10% higher than in
2009. Research and development costs declined moderately by 1.4% to EUR 1,167 million. In
total, non-recurring expenses were lower than in 2009. The largest single non-recurring item
was the impairment loss for safinamide (see page 19). Overall, the operating result improved by
59% to EUR 565 million. Return on sales (ROS) increased to 9.8% in 2010. Underlying free cash
flow grew by 51% to EUR 1,308 million.
Five top-selling biopharmaceuticals
account for 61% of sales
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3
4
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Merck Annual Report 2010 48