Merck sells biosimilars business to Fresenius to focus on innovative drugs

Merck to receive upfront payment of € 170 mn & milestone payments of up to € 500 mn on future sales

Stefan Oschmann, chairman & CEO of Merck

BS B2B Bureau Darmstadt, Germany

Last Updated : Apr 25 2017 | 8:54 PM IST

Germany-based science and technology company Merck has divested its biosimilars business to Fresenius Kabi as part of Merck’s strategy for its healthcare business to focus on the pipeline of innovative medicines.

As per the agreement, Merck will receive an upfront payment of € 170 million, milestone payments of up to € 500 million plus royalties on future product sales. The parties agreed to enter into supply and services agreements, which include drug development support and manufacturing services. Closing is expected in the second half of 2017, subject to regulatory approvals and other customary closing conditions.

“Developing and marketing innovative products and services are at the forefront of our group strategy and all the business strategies. Today’s step reflects our ambition to resolutely continue the transformation of Merck into a science and technology company,” commented Stefan Oschmann, chairman of the executive board and CEO of Merck.

Belen Garijo, member of the executive board of Merck and CEO healthcare, added, “The divestment of our biosimilars business is a major step towards strategically aligning our R&D resources to Merck's healthcare priorities. We have increasing confidence in our biopharma pipeline and this transaction will help prioritise innovative drug development of high quality and first-to-market best-in-disease assets. The partnership with Fresenius will allow us to exploit our biosimilars portfolio to full potential while granting Merck a substantial return on prior investments.”

Biosimilars are a fast-growing segment within the pharmaceutical market. Some of the largest biological branded products will go off patent over the next years. “With this acquisition, Fresenius Kabi enhances its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio. The acquisition creates a platform for further growth,” emphasised Mats Henriksson, CEO of Fresenius Kabi.

The biosimilars unit is part of the healthcare business of Merck and is located in Aubonne and Vevey in Canton de Vaud, Switzerland. The business is developing a biosimilars portfolio focused on oncology and inflammatory disorders. After completion of the transaction the biosimilars unit will continue to operate in these locations.