Company Analysis - Merck Serono
Merck Serono: A new force to be reckoned with?
September 21st 2006 saw the announcement that Merck KGaA had entered into an agreement with Serono's owners, the Bertarelli family to purchase the majority stake of the Geneva-based company.
Subsequently, in January 2007, Merck Serono was launched as a subsidiary of Merck KGaA. Michael Römer, Chairman of Merck KGaA's Executive Board, hopes that the synergy between the two companies will allow Merck KGaA's pharmaceuticals business to adopt "a leading position in the world of biological medicines".
Merck KGaA's business strategy appears to focus on the long-term potential of its pharmaceuticals division, by building a robust pipeline of novel pharmaceuticals with blockbuster potential. By acquiring Serono, Merck KGaA is increasing its number of biological products, which were somewhat lacking in comparison to its chemical entities in development (Graph 1).
Whilst Serono has a similar number of chemical entities in development to Merck KGaA, it also has 50% more biologicals, including 8 recombinant proteins. This strategic acquisition will not only allow Merck KGaA access to a pipeline Serono has built up in therapeutic areas outside of Merck KGaA's previous core areas, but will also contribute a greater level of expertise in the area of biopharmaceuticals.
