Merck 2014 Annual Report Download - page 72

67GROUP MANAGEMENT REPORT → FUNDAMENTAL INFORMATION ABOUT THE GROUP → Research and development at the group
RESEARCH AND DEVELOPMENT AT THE GROUP
Merck KGaA, Darmstadt, Germany, conducts research and
development worldwide in order to develop new products and
services designed to improve the quality of life of patients and
customers. In 2014, the company focused on further optimizing
the relevance and efficiency of its research and development
activities. For this purpose, the Group increased the number of
new collaborations with external research and development
partners.
Around 4,700 employees work for Merck KGaA, Darmstadt,
Germany, researching innovations to serve long-term health
and technology trends in established and emerging markets as
well as in developing countries.
The company spent around €1.7 billion on research and devel op-
ment in
2014. In our research and development activities, we focus
on both
in- house research and external collaborations, which
enable us to
increase the productivity of our research while
simultaneously
reducing financial outlay.
The organizational set-up of our research and development
activities reflects the structure of the Group. Within the Executive
Board, Stefan Oschmann, who became Vice Chairman of the
Executive Board at the beginning of 2015, was responsible for the
Biopharmaceuticals and Consumer Health divisions until Decem-
ber31, 2014. Effective January1, Belén Garijo assumed this re-
sponsibility as a Member of the Executive Board. Bernd Reckmann
is responsible for Performance Materials and Life Science.
BIOPHARMACEUTICALS
General
The Biopharmaceuticals division's R&D continues to evolve with
a
focus on both strategic and operational improvements. In the
course of 2014, with new leadership in place after the appointment
of Luciano Rossetti, MD, as Executive Vice President and Head of
Global R&D in July, the R&D organization further enhanced the
structure of R&D to strengthen collaboration across the spectrum
of Research, Development and Commercial, prioritized key devel-
opment programs, and created a governance model founded on
collaboration, agility and objectivity in science.
Along with a sustained effort to foster an environment of
end-to-end development– from early research through to late-
stage development and product registration– there is also a reso-
lute commitment to ensuring the patient’s needs are the primary
driver in all decision-making. A patient-centric approach to R&D
is becoming increasingly inherent across the Biopharmaceuticals
division
, from research of the highest quality through to quick
and efficient clinical development. Across the continuum of
R&D, there is a renewed energy to build a solution-oriented,
collaborative and accountable culture that delivers value to the
business and to
patients. With an unwavering focus on world-
class science and the development of strategic external opportuni-
ties, the Biopharmaceuticals division R&D aims to accelerate its
pipeline.
Research and development strategy
In 2014, the Biopharmaceuticals division's R&D continued its
change strategy to better position the organization for success in
the years to come. Today, founded on a solution-oriented and col-
laborative mindset, almost 2,300 R&D professionals are working
to advance innovation across the Biopharmaceuticals division
R&D pipeline.
In Research, the early phases of discovery remain structured
across three distinct yet closely aligned Translational Innovation
Platforms (TIPs): Oncology, Immuno-Oncology, and Immunology,
as well as a specific department focused on Global Health, which
targets critical health needs in vulnerable populations.
With early development now part of Global Development,
R&D teams share the common goal of advancing programs in a
seamless fashion, collaborating to identify the right strategies for
key programs as they progress along the pipeline, and aligning
with Commercial from the earliest stages in the process, in order
to build the right target product profile in the most effective way
possible.
Program prioritization became a critical priority in 2014,
streamlining the R&D portfolio based on key data milestones,
among other things. With a core set of compounds now targeted
as high-priority, the R&D organization can better distribute re-
sources across its programs to optimize their potential for success.
With hubs in Darmstadt, Germany; Boston, Massachusetts,
USA; Tokyo, Japan; and Beijing, China, the broad footprint of the
Biopharmaceuticals division gives it access to innovation in its
key markets. Across the entire biopharma spectrum– from aca-
demia and hos
pitals to research institutions and other companies
in the bio
pharmaceutical industry – the Biopharmaceuticals divi-
sion complements its internal expertise by leveraging the experi-
ence and knowledge of others through partnerships. In 2014,
the Biopharmaceuticals division delivered clear examples of this
strategic priority, announcing agreements with several companies
and academic institutions around the world, as
well as awarding
external grants for research innovation in several
disease areas, as
detailed in the next section.