August 18, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Merck & Co. ’s India unit has apparently put a group of products on sale in what appears to be yet another move to streamline its operations to focus on newer products.
According to The Economic Times, at least in India, Merck is trying to unload older, legacy drugs, such as injectable steroidal hormones Decadurabolin and Sustanon. An unnamed source told the Times, “The products are old but have maintained a good recall among doctors.”
There has been speculation since about 2014, when Merck sold its consumer health unit to Bayer AG for $14.2 billion, that offloading patent-cliff products was in the cards. This was, and remains, a trend of larger drug companies selling off divisions that aren’t viewed as part of their core business. In the same period, Novartis and GlaxoSmithKline inked a consumer joint venture, with GSK selling its oncology units to Novartis, which sold its vaccines business to GSK and its animal health business to Eli Lilly & Co. .
Merck was rumored to be selling its so-called “diversified brands,” which is an interesting term for drugs whose patents have expired. Analysts in 2014 projected that a sale of the entire division could be worth about $15 billion.
In July, Merck’s chief executive officer, Kenneth Frazier, dodged specific questions about selling its diversified brands, saying, “As we look across our entire business we continue to challenge ourselves to determine whether specific assets including—diversified brands—would have more value outside Merck or as part of our business. We are really focused on prioritization.”
This year alone has marked a number of smaller acquisitions, deals and restructuring. In January, Merck acquired IOmet, a privately-held UK-based company that focuses on immuno-oncology and metabolism. In that deal it also picked up IDO, TDO and IDO/TDO inhibitors.
In March, Sanofi Pasteur and Merck ended their joint vaccines operations in Europe. That venture started in 1994.
In June, it announced it was buying Afferent Pharmaceuticals. Under that deal, Merck’s acquiring all outstanding Afferent stock for $500 million upfront in cash, and an additional $750 million in various development and commercial milestone payments.
In July, Merck Animal Health acquired a controlling interest in Vallee S.A., a Brazilian animal health company. Vallee has more than 100 products ranging from parasiticides, anti-infectives to vaccines. Merck Animal Health bought about 93 percent of the company’s shares for $400 million.
On jobs, in August the company announced it was slashing 300 jobs from U.S.-based east coast locations. Those jobs were related to changes in the company’s commercial structure.
“It’s important to note that this action is separate and distinct from the organizational changes we are making within our discovery, pre-clinical and early development (DPEP) area in Merck Research Laboratories to enable earlier access to emerging external science and technology to augment our leading discovery and development capabilities,” Lainie Keller, a Merck spokeswoman told BioSpace on August 15. “Those changes include increasing our investment in exploratory biology in areas where biomedical research is converging, specifically in Cambridge, Mass. and the San Francisco Bay area, Calif.”
It’s not completely clear if the sale in India is part of a larger restructuring strategy. The Economic Times speculates that Merck will likely focus in on a few specific areas, like diabetes, next-generation cancer drugs like Keytruda, and vaccines. An unidentified industry executive told the Time, “The idea is perhaps to shift gears from a mass market-based revenue generation strategy to improving qualify of revenues.”
