Merck KGaA Considers Strategic Options for OTC Business

Merck KGaA reports that it is preparing strategic options for its Consumer Health business, including a potential full or partial sale of the business as well as strategic partnerships.

The company’s Consumer Health business is part of the company’s healthcare segment, which includes prescription biopharmaceuticals and pharmaceuticals and its Allergopharma business, which focuses on diagnostics and prescription drugs for allergen immunotherapy. It also had contained its biosimilars business, but the company completed the divestment of its biosimilars business to Fresenius this week.

The Consumer Health business provides over-the-counter products, including remedies for relieving muscle, joint and back pain, colds and headaches as well as products for supporting physical activity and mobility. It also includes probiotic food supplements, vitamin C, and products with vitamins, minerals, and nutrients that support women’s and children’s health.

The company said that it its biopharmaceutical/pharmaceutical business is the leading focus for its healthcare segment and that it anticipated funding constraints in investing in its Consumer Health business to meet critical mass.

“We have continued to transform Merck KGaA, Darmstadt, Germany, over the last years into a leading science and technology company. Thereby we regularly review our portfolio in the context of our innovation-driven strategy. Healthcare largely focuses on its Biopharma pipeline,” said Stefan Oschmann, chairman of the Executive Board and CEO of Merck KGaA, in a company statement.

“Our Consumer Health portfolio has been continuously enhanced over the past years. We have maintained a solid position in attractive markets, and demonstrated a pattern of profitable growth. We expect increasing internal constraints to fund the business to reach the required scale. Fully anticipating this, we are preparing strategic options,” said Belén Garijo, member of the Executive Board of Merck KGaA and CEO Healthcare, in the statement.

Healthcare is one of three main business segments for Merck KGaA, which also includes its life-science business, which sells products and services to biopharmaceutical companies, and its performance-materials business, which includes electronic chemicals. In 2016, healthcare accounted for revenues of EUR 2.13 billion ($2.54 billion), its life-sciences business had revenues of EUR 1.65 billion ($1.97 billion), and its performance-materials business had revenues of EUR 1.11 billion ($1.32 billion). The company’s most recent high-valued move was the $17-billion acquisition of Sigma-Aldrich in 2015, which added to the company’s life-science business.

Over the past several years, Merck KGaA has overhauled its healthcare business and is now focusing on executing its three-pronged strategy, namely driving key projects such as the cancer immunotherapy, avelumab; maximizing its existing portfolio such with its multiple sclerosis drug, Rebif (interferon beta-1a), and its oncology drug, Erbitux (cetuximab), respectively the company’s number one and two top-selling drugs; as well as expanding further in growth markets.

Source: Merck KGaA

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