New trials may change modest mood at Merck KGaA
Darmstadt – German pharmaceutical and chemical company Merck KGaA has set a downbeat tone for 2012. CEO Karl-Ludwig Kley said the recently launched cost-cutting programme and tough economic conditions will weigh on profits this year. Nevertheless, stock holders can expect a higher dividend this year. The German conglomerate expects a slight rise in revenues and sales this year. Merck faces price cuts in its business with the liquid crystals that are used such as in TV screens. However, the most pressure lies on the pharma business after potential blockbusters like the MS pill cladribine or the Parkinson treatment safinamide failed during the approval process. Merck recently licensed a cancer drug from Threshold Pharmaceuticals Inc. in a potential multi-million dollar deal. Even in the light of the announced cost-cutting, Kley said he will stick to the company's present licensing strategy. However, he denied that major acquisitions are likely to happen this year. The modest mood at Merck may turn if the company's drug candidates perform well in running clinical trials. In 2012 and 2013, the Darmstadt-based conglomerate expects a string of data: A phase III study of Erbitux in adjuvant colon cancer in the second quarter 2012 and in gastric cancer. The peptide Cilengitide could prove itself in phase III as a treatment for brain cancer in the first half of 2013. The most interesting substance in the pipeline is Stimuvax, a vaccine to treat lung cancer. Phase III results are expected in 2013. Finally, phase II data from ONO-4641 in multiple sclerosis and of Atacicept in rheumatoid arthritis could bring good news in 2012.