First-quarter sales in Merck KGaA's Serono unit fall 1 percent on currency effects

Merck KGaA announced Thursday that first-quarter sales in its Serono unit slipped 1 percent versus the year-ago period to 1.4 billion euros ($1.9 billion) as growth was offset by negative foreign currency effects of 5.2 percent. The company said that revenue from Rebif increased 1.2 percent to 459 million euros ($628 million) "despite the increasingly difficult competitive situation" in the multiple sclerosis market.

In the quarter, sales of Erbitux declined to 209 million euros ($286 million) from 222 million euros ($304 million) in the prior-year period. In addition, revenue from Gonal-F rose 5.3 percent year-over-year to 152 million euros ($208 million) as Merck explained that the product had "a relatively weak year-earlier quarter."

CEO Karl-Ludwig Kley remarked "within the Merck Serono division, we want to further expand our business with existing medicines, both in emerging markets...and in the United States." The executive suggested that for the unit, "inorganic growth through partnerships and acquisitions will also be possible in 2014." Kley said earlier this month that Merck could pursue additional acquisitions, noting that in-licensing agreements in pharmaceuticals, as well as planned investments of around 100 million euros ($137 million) in the biosimilars business, are also feasible options.

According to Merck, quarterly sales from its consumer health division declined less than 1 percent to 180 million euros ($246 million), while overall revenue slipped 3.5 percent to 2.7 billion euros ($3.7 billion). Net income in the three-month period jumped 22.2 percent to 325 million euros ($444 million), mainly as a result of cost cuts. "Merck got off to a solid start in 2014," Kley said, adding "especially in view of the challenging market environment...our cost control and targeted growth initiatives are paying off."

The executive noted that the company will "face negative exchange rate effects" for the remainder of the year, commenting "therefore, we remain cautious." The company expects stable organic sales in the Serono unit this year, as growth in emerging markets offsets declines in sales of Rebif in the US and Europe. In 2014, overall sales at Merck are predicted to be about 10.9 billion euros ($14.9 billion) to 11.1 billion euros ($15.2 billion), with earnings between 3.3 billion euros ($4.5 billion) and 3.4 billion euros ($4.6 billion), up from 3.25 billion euros ($4.4 billion) last year.

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