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Merck KGaA completes the divestment of its biosimilars business as part of its strategy to focus on developing a pipeline of innovator drugs.
Merck KGaA completed its previously announced divestment of its biosimilars business to Fresenius Kabi, a German specialty and generic pharmaceuticals company and a subsidiary of Fresenius SE & Co. KGaA, on Sep. 1, 2017 for the purchase price of EUR 656 million (US$788 million). The reduction in the purchase price from the previously announced EUR 670 million (US$806 million) is related to the phasing of R&D expenditures between signing and closing of the acquisition, according to Fresenius Kabi. The closing of the transaction follows the receipt of regulatory approvals.
Under the transaction, Fresenius Kabi paid Merck an upfront payment of EUR 156 million (US$187 million) upon closing and will pay up to EUR 500 million (US$601 million) in milestone payments, plus royalties on future product sales. In addition, the companies entered into supply and services agreements, which include drug development support and manufacturing services for biosimilars. The biosimilars pipeline is focused on oncology and autoimmune diseases and addresses a market with current annual branded sales of around $30 billion, according to Fresenius Kabi.
The biosimilars business was part of Merck’s healthcare businesses sector and is located in Vevey and Aubonne in Canton de Vaud, Switzerland. The biosimiliars business will continue to operate in both sites following completion of the transaction. The business is developing a biosimilars portfolio focused on oncology and inflammatory disorders. Merck’s decision to divest its biosimiliars business aligns with its strategy to focus on a pipeline of innovator drugs in oncology, immuno-oncology, and immunology.
“The transaction is part of our continued active portfolio management and marks another step in the transformation of Merck KGaA, Darmstadt, Germany, into a science and technology company”, said Stefan Oschmann, Merck KGaA’s chairman of the executive board and CEO, in a company press release.
In a related move executing its company strategy, Merck KGaA announced in September 2017 that it is also considering options for its Consumer Health business, including potentially selling it.