Merck serono : l’industrie pharmaceutique
The pharma business and how to cope with uncertainty
Riccardo Lampariello, MSc, MBA Associate Director – Portfolio Management SKEMA Business School- Paris 5 Oct 2010
POKER • 5 cards randomly drawn from a full deck of 32 • What is the probability of three of a kind at the opening?
• 5.3%.
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Summary
High uncertainty in the pharmabusiness Merck Serono International Evaluation of R&D projects
– NPV – Dynamics of NPV: uses, abuses and misuses
Copying with project uncertainty Copying with portfolio uncertainty Conclusions
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
The pharma business
High uncertain business
Main causes of uncertainty
– Risk nature
• • • • Technical Operational Commercial MarketAccess
– Long-term results
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Clinical drug development pipeline
5%
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Technical risks
Source: PhRMA,2008 – Paris, 5 Oct 2010 7 R Lampariello – MerckSerono
Operational risks
R&D expenses vs. NME output(1)
70 60
Global R&D expenditure [Bn EUR] # NME approvals (FDA)
60 50 4030 20 10 0 2007e 1980 1983 1986 1989 1992 1995 1998 2001 2004
50 40 30 20 10 0
R&D expenditure
NME approvals
(1)
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Parexel Bio/Pharmaceutical R&D Statistical Sourcebook 2006/2007
R Lampariello – MerckSerono – Paris, 5 Oct 2010
Commercial risk: will be a new world order?
(market size: value of sales)
Source: IMS, 2010
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The global recession is exerting pressure on consumers’ and governments’ spending Gross Domestic Product Indices of Major Market Economies
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Source: Burrill & Co and IMS Health analysis, 2009
Merck Serono: company profile
“We will create an innovative, successful pharmaceuticals business withglobal reach by leveraging our core strengths. We want to build a company being recognized as “best pharma.” Our success will benefit patients and reward employees and owners.’’ Elmar Schnee, MerckSerono President
Merck Serono Headquarters, Geneva, Switzerland
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Merck Serono is Merck’s largest division
Merck Group
PharmaceuticalsChemicals
Merck Serono Consumer Health Care
Merck Millipore Performance Materials
Central functions
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Divisions
Key facts & figures
Largest division of Merck KGaA Established: Business: Employees: President: Total revenues: Headquarters: Key growth drivers: January 5, 2007 Innovative small molecules & biopharmaceuticals ~17,000Elmar Schnee € 5.3 billion in 2009 Geneva, Switzerland
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
WHO WE ARE
Focused on specialist therapeutic areas
Merck Serono
Oncology
Autoimmune & Inflammatory Diseases (AIID)
Neurodegenerative Diseases
Fertility Endocrinology
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Cardio Metabolic Care
WHO WE ARE
Salesby region
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R Lampariello – MerckSerono – Paris, 5 Oct 2010
Our group: Merck KGaA
Merck manages its operating activities under the umbrella of Merck KGaA, Darmstadt, Germany
– Listed on the Frankfurt Stock Exchange since 1995 and included in the DAX® 30 index since June 2007 – Around 30% of the total capital is publicly traded – The Merck family, as general partner, indirectly holdsapproximately 70% of the capital
Merck operates in two main business sectors: Pharmaceuticals and Chemicals
The Pützer Tower and Pyramid at Darmstadt headquarters
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Merck Serono Portfolio
Aug 5, 2010
Phase I
ATX-MS-1467, immune tolerizing agent Relapsing Forms of MS MEK inhibitor (AS703026) Solid tumors and hematological malignancies…