Merck may sell consumer health business to focus on new drugs

Firm, which has been present in India for over five decades, operates through five main companies

German drug maker Merck is exploring sale or strategic partnership for its consumer health business, including the unit’s India operations, as it continues its focus to develop innovative drugs.

The plan to hive off the business is the second such move by the drug maker. The company had sold its biosimilars business to another German drug maker, Fresenius Kabi, earlier this year. 

Merck operates in 66 countries and its business is spread across pharmaceuticals, laboratory solutions, chemicals and liquid crystals. In 2016, it had global sales of ^15 billion — consumer health contributed ^850 million. Merck, which has been present in India for over five decades, operates through five main companies, including its listed entity Merck Ltd. Merck Ltd’s 2015 annual report shows that the consumer health business contributed over Rs 200 crore, or around 24 per cent, of its Rs 904-crore sales in the country (the company follows January-December calendar). The segment includes brands such as vitamin-B tablets Neurobion Forte (which in 2015 became the first Rs 100-crore brand for the firm), health supplement Seven Seas, oral electrolyte Electrobion and cold medicine Nasivion.

The contribution of the consumer health segment would be significantly higher as the company in 2016 included vitamin brands — Polybion and Evion — and anemia treatment tablet Livogen in its consumer health division. Merck did not give sales figure for the division in 2016. Other than these drugs Merck Ltd also sells anti-diabetic and cardiovascular drugs.

In the recent years, the company has ramped up its investment and focus on drugs to treat cancer and infertility. These include drugs such as Erbitux and Gonal sold through an unlisted firm that contributed to around Rs 100 crore in sales last year, according to company filings with the Registrar of Companies. The company also plans to introduce some of novel therapies in the domestic market. “It is too premature to speculate on our growth strategy excluding consumer health. Until a final decision is taken, consumer health continues to be part of our business plans. Additionally, please note that Merck, through its legal entities, has a strong presence across health care, life sciences and performance materials in India and will also continue to focus and prioritise the same,” a Merck spokesperson said in an email response.

The stock gained 2.4 per cent to close at Rs 1,235.40 on the BSE on Wednesday. “Over the past couple of years, we have invested around 10 million Euros to develop capabilities in India and expect to continue investing at that level over the next couple of years as well. India continues to be one of the growth drivers of our emerging market strategy, which has been very successful in the past five years,” said in an interview with Forbes last December.