Merck 2014 Annual Report Download - page 50

45GROUP MANAGEMENT REPORT → FUNDAMENTAL INFORMATION ABOUT THE GROUP → The Group
containing the active ingredient metformin, the drug of choice
for
first-line treatment of type 2 diabetes, as well as to Concor®
containing bisoprolol, the leading beta-blocker for chronic cardio-
vascular diseases such as hypertension, as well as Euthyrox®
(levothyroxine) as the leading treatment for hypothyroidism.
Particularly in emerging markets, there is a continuous rise in
demand for cardiometabolic therapies. This is due to both increas-
ing life expectancy and in part also to growing prosperity in this
region, along with the resulting changes in lifestyle and dietary
habits. Beyond developing life cycle management products to
cap-
italize on the Biopharmaceuticals division’s strong brand equity,
the
company entered into a long-term strategic partnership with
Lupin Ltd. of India to broaden the General Medicine portfolio in
emerging markets with affordable, high-quality medicines.
The Biopharmaceuticals division is continuously working to
improve ways to administer medicines and active ingredients. For
several years, the Biopharmaceuticals division has been developing
novel injection devices, which make injections more user-friendly
and at the same time more reliable for patients than conventional
or prefilled syringes. In addition, these products make it easier for
health care practitioners and patients to ensure adherence and
thus to reach their treatment goals. Examples are the easypod™
electromechanical injection devices for the delivery of Saizen®
(somatropin) and RebiSmart™ for Rebif® (interferon beta-1a).
Additionally, both easypod™ and RebiSmart™ are able to wireless-
ly transfer data such as injection
times, dates and doses to the
Web-based software systems
easypod™ connect and MSdialog.
The Biopharmaceuticals division is advancing its research and de-
velopment (R&D) portfolio across the areas of oncology, immuno-
oncology and immunology, and continues to invest in devel
oping
programs in multiple sclerosis. With its expertise in discovery
and
early development, as well as approximately 25projects in clinical
development, the Biopharmaceuticals division is focused
on deliv-
ering differentiated new therapies to patients with unmet medical
needs.
In addition, Merck KGaA, Darmstadt, Germany, has two further
pharmaceutical business units that operate as independent busi-
nesses within the Healthcare business sector since the new organi-
zational structure took effect on January 1, 2015. Allergopharma
is specialized in developing high-dose hypoallergenic products for
specific immunotherapy and diagnosis of type 1 allergies (such as
hay fever or allergic asthma). Biosimilars is developing biological
medicines that are similar to an existing registered biological
medicine (the “reference medicine”). The company is moving
ahead with the development of a portfolio of biosimilar compounds
applicable to various disease areas including oncology and auto-
immune diseases. The focus is on developing molecules through
in-house research and development as well as through partnerships.
As of January1, 2014, two product groups were transferred
from the Biopharmaceuticals division to Consumer Health. These
are Neurobion®, a vitamin B-based analgesic, and Floratil®, a
leading brand in the probiotic antidiarrheal segment in Brazil.
Sales of the two products totaled €265 million in 2013. The effects
of the product group transfers on the Biopharmaceuticals divi-
sion’s figures for 2013 are presented in the following table.
BIOPHARMACEUTICALS →
ADJUSTED
2013
€ million reported adjustment adjusted
Sales 6,325.8 – 265.4 6,060.4
Total revenues 5,953.6 – 265.2 5,688.4
Operating result (EBIT) 893.0 – 99.9 793.1
Margin (% of sales) 15.0 13.9
EBITDA 1,886.5 – 99.9 1,786.6
Margin (% of sales) 31.7 31.4
EBITDA pre one-time items 1,955.0 – 99.9 1,855.1
Margin (% of sales) 32.8 32.6
Business free cash flow 1,875.7 – 88.6 1,787.1