Merck KGaA

Merck KGaA is a German-based chemical and pharmaceutical company. Merck (also referred to as “German Merck” or “Merck Darmstadt”) was founded in Darmstadt, Germany, in 1668 and is one of the oldest still-operating chemical/pharmaceutical companies in the world. The company was privately owned until going public in 1995. However, the Merck family still controls a majority of the company's shares.

Following World War I, Merck lost possession of its foreign sites, including the Merck & Co. subsidiary in the United States. Merck & Co., called Merck Sharp and Dohme (MSD) outside the US and Canada, is now an independent company.

Merck KGaA operates mainly in Europe. Since Merck & Co. has rights to the Merck name in the US and Canada, the company operates under the umbrella brand EMD in North America, formed from the initials of Emanuel Merck, Darmstadt.  

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History

Merck has a colorful and varied history. The roots of Merck reach back into the 17th Century. In 1668, Friedrich Jacob Merck, an apothecary, assumed ownership of the "Engel-Apotheke" (Angel Pharmacy) in Darmstadt, Germany.

In 1816, Emanuel Merck took over the pharmacy. Thanks to his good scientific education he was successful in isolating and characterizing alkaloids in the pharmacy laboratory. He began the manufacture of these substances "in bulk" in 1827, touting them as a "Cabinet of Pharmaceutical and Chemical Innovations". He and his successors gradually built up a chemical-pharmaceutical factory that produced — in addition to raw materials for pharmaceutical preparations — a multitude of other chemicals and (from 1890) medicines.

In 1891, Georg Merck established himself in the United States and set up Merck & Co. in New York, USA. Merck & Co. was confiscated following the First World War and set up as an independent company in the United States. Today, the US company has about 70,000 employees in 120 countries and 31 factories worldwide. It is one of the top 5 pharmaceutical companies worldwide, much larger than its German ancestor, which employs around 30,962 people in 62 countries (as of September 30 2007).

Pharmaceuticals

Many popular and successful products have emerged from Merck's laboratories. After Wilhelm Adam Sertürner's isolation of morphine from opium in 1805, Merck pioneered (from 1827) the commercial manufacture of morphine for an expanding global market. From 1884 onwards, Merck played a vigorous role too in the production and marketing of cocaine. Sigmund Freud, author of Über Coca (1884), was an enthusiastic collaborator in Merck's coca research, though the methodological sophistication of his self-experimentation studies has been challenged.

Around World War I, Merck systematically patented many drugs including MDMA (ecstasy) [1] and several of its analogues, though no uses for them were given. Attention was directed at vitamins as a new product category, and Vigantol was introduced in 1927, followed by Cebion in 1934.

Following the defeat of Germany in World War II, Merck was granted permission by the military government to produce drugs, pesticides, food preservatives, reagents, and fine chemicals for laboratory use. Soon afterwards the boom commonly known as the "Wirtschaftswunder" (economic miracle) set in. For Merck this meant two-digit sales-growth figures for many years. Successful pharmaceutical agents of this time included corticoid preparations — for example Fortecortin, which is still used today —, the cold remedy Nasivin or the hormone preparations Gestafortin and Menova.

The focus of Merck's current pharmaceutical R&D is on oncology and cardio-metabolic care. In the former therapeutic area, its first marketed product is Erbitux (cetuximab), for which it has marketing rights worldwide, apart from North America. (Cetuximab was discovered by Imclone Systems, and is marketed in North America by Bristol-Myers Squibb.) Erbitux is expected to be Merck's top-selling product in 2006.

Other products from Merck include Metformin, Bisoprolol and Digitoxin.

Chemicals

In the chemicals sector, work started on pearl-lustre pigments in 1957. Ten years later the company initiated its involvement in liquid crystals, leading to its market leading role today. Liquid crystals account for the bulk of Merck's profits at present.

In the area of analytical chemistry, Merck played a leading role in the development of chromatographic methods.

Schering Takeover Bid

On March 13, 2006, Merck announced a takeover bid for Schering, the world's largest producer of oral contraceptives. On March 23, 2006, Bayer AG made a supported offer for Schering and Merck decided to drop out of the bidding for the company. Schering is not to be confused with Schering-Plough, an American pharmaceutical company.

Acquisition of Serono SA

In September 2006 the company announced a takeover bid of $13.2 billion for Serono SA, Switzerland's largest biotech firm. The deal includes a buy-out of the Bertarelli family's 64.5% stake in Serono to be followed by a public tender offer for the remaining shares starting in November. The combined company will have an R&D budget of approximately $1.1 billion and sales of approximately $4.6 billion. Its approximately $2 billion in sales of biologics would make it 7th among pharmaceutical/biotech companies. The new entity will be called Merck-Serono and is expected to begin operations sometime during or after January 2007.

Price fixing settlement

Generics UK, a former British subsidiary of German drugs firm Merck (global Generics business sold by Merck October 2nd 2007) paid a £12m out-of-court settlement with the Department of Health over involvement in an alleged price and supply fixing cartel.^[1]

The NHS alleges various drugs companies exploited the oligopolistic market conditions, forcing the NHS to pay inflated prices. NHS fraud investigators believe there was a conspiracy to limit of 30 of its most commonly prescribed drugs, including a class of penicillin antibiotics and to a generic version of best-selling ulcer treatment Zantac.^[2] The NHS has so far filed claims in relation to just three drugs, seeking damages of more than £150m, while the Serious Fraud Office (SFO) is conducting a parallel investigation into the price-fixing allegations limited to the supply of blood-thinning pill warfarin and penicillin-based antibiotics. Homes and offices of executives at six firms, including Ranbaxy, Generics UK, Norton Healthcare, Goldshield and Regent-GM.were raided by the SFO in May 2002.

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