Merck KGaA details savings targets for biotech cuts

Merck KGaA (Xetra:MRK) hopes to achieve EUR 300 million ($386.6 million) in net cost savings by 2014 through the previously announced restructuring of its Merck Serono biotech division. The target, announced Tuesday along with the group's 1Q12 financial results, follows last month's news that the pharma will shutter Merck Serono's headquarters in Geneva, Switzerland, and eliminate 500 (40%) of the 1,250 positions at the site. Merck plans to rebuild the division's pipeline through internal research and early in-licensing, and increase the division's focus on biologics. Merck Serono also will shift investments to regions outside of Europe and potentially expand its footprint in cancer.

The division's sales are expected to grow 2-6% from EUR 5.6 billion ($7.3 billion) in 2011 to EUR 5.7-EUR 5.9 billion ($7.3-7.6 billion) in 2014. EBITDA before one-time items is expected to grow 15-21% by 2014 to EUR 1.8-EUR 1.9 billion ($2.3-$2.4 billion). Merck Serono's 1Q12 sales grew 5% to EUR 1.4 billion ($1.9 billion), with EBITDA before one-time items declining 2% to EUR 394 million ($525.6 million). ...