|Publicly traded KGaA|
|Traded as||FWB: MRK|
|Founder||Friedrich Jacob Merck|
|Karl-Ludwig Kley (CEO and Chairman of the executive board), Wolfgang Büchele (Chairman of the supervisory board)|
|Products||Liquid crystals, life science and performance chemicals, over-the-counter medicines, small molecules and biopharmaceuticals|
|Revenue||€11.362 billion (2014)|
Number of employees
|Ca. 50,000 (2016)|
Merck KGaA, commonly known as Merck, is a German multinational chemical, pharmaceutical and life sciences company headquartered in Darmstadt, with around 50,000 employees in around 70 countries. Merck was founded in 1668 and is the world's oldest operating chemical and pharmaceutical company, as well as one of the largest pharmaceutical companies in the world.
Merck operates in Europe, Africa, Asia, Oceania and the Americas. It has major research and development centres in Darmstadt, Boston, Tokyo and Beijing. Merck pioneered the commercial manufacture of morphine in the 19th century.
Merck was privately owned until going public on the Frankfurt Stock Exchange in 1995, and is listed on the DAX index of Germany's top companies. The Merck family still controls a majority 70.3% of the company's shares. The American pharmaceutical company Merck & Co. was established as a subsidiary of Merck in 1891, but became an independent company in 1917, known as MSD outside of North America. The original Merck of Darmstadt holds the rights to the name Merck in all countries except the U.S. and Canada, where it is known as EMD. In 2015 Merck adopted a new uniform brand identity for all its subsidiaries, and the company has stressed its intention to protect the brand of "the real Merck" globally.
In 1816, Emanuel Merck took over the pharmacy. Thanks to his 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(e) Merck established himself in the United States and set up Merck & Co. in New York. Merck & Co. was confiscated following the First World War and set up as an independent company in the United States. Today, the US company, which operates as Merck Sharp and Dohme (MSD) outside the U.S. and Canada, has about 86,000 employees (December 2011) in 120 countries. It is one of the top 5 pharmaceutical companies worldwide, larger than its German ancestor, which employs around 40,700 people in 67 countries (December 2011). While Merck in Darmstadt is the legal successor of the original Merck and retains the rights to the name "Merck" in all countries except the U.S. and Canada, it is sometimes known as the "German Merck" or "Merck Darmstadt" in North America. The company was formerly also referred to as "E. Merck" (Emanuel Merck).
Merck Korea received the "Leading Investor Award" at the 5th Korea-EU Industrial Cooperation Day in 2011.
On March 13, 2006, Merck announced a takeover bid for Schering AG, 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 which was once part of Schering AG but was acquired by Merck & Co. in 2009.
In September 2006 the company announced a takeover bid of $13.2 billion for Serono SA, Switzerland's largest biotech firm. The deal included 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 2006. The combined company has 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, Merck Serono, began operations in 2007.
With the acquisition of Millipore, Merck is consolidating its US holdings and shutting down the Gibbstown facility and warehouse. Gibbstown operations will be transferred to the new Philadelphia office and Millipore headquarters.
In September 2014 Merck halted the clinical development of two drug candidates in development with Oxygen Biotherapeutics. One drug candidate suffered a lack of success in patient recruitment, with its MUC1 antigen-specific cancer immunotherapy drug, tecemotide (L-BLP25), missing its Phase I/II endpoint of increasing overall survival in patients with Stage III non-small cell lung cancer. Later in September it was announced that the company would acquire Sigma-Aldrich for US$17 billion. After the acquisition was completed in 2015, Merck has around 50,000 employees.
In October 2015, Merck revealed it would return the rights of the Kuvan drug to BioMarin Pharmaceutical Inc.. The drug is effective in the treatment of the rare genetic disorder PKU, however Merck is moving away from genetics into cancer treatment, immunology and neurology.
In October 2015, it was announced that Karl-Ludwig Kley, CEO of Merck since April 2007, would retire in April 2016, and be succeeded by Stefan Oschmann, who has been a member of the executive board since 2011.
"Merck" name legal dispute
- In 191 of 193 countries Merck KGaA owns the rights to the "Merck" name, in the USA and Canada the company trades under the name, EMD.
- In the USA and Canada Merck & Co. have the rights to the "Merck" name, in the rest of the world the company trades under the name, Merck Sharp & Dohme.
In 2015 the company adopted a new logo and said it will be "much more aggressive" about protecting the brand of "the real Merck."
In January 2016, Merck & Co. filed a federal lawsuit which accused Merck KGaA of infringing on its trademark through actions that included the increased usage of “Merck KGaA” and “MERCK” in branding in the US as well as on its social media presence. Further Merck & Co. has also accused Merck KGaA of federal trademark dilution, unfair competition, false advertising, deceptive trade practices, breach of contract, and cybersquatting. The case came to a head when a research scientist believed they were communication with Merck & Co regarding a research grant in oncology, when in fact they were talking with Merck KGaA. As a result, Merck & Co. asked the federal court to stop Merck KGaA from using “Merck” on any products or marketing materials. As a direct result, Merck & Co is seeking “all monetary gains, profits, and advantages” made by Merck KGaA and three-times the damage, plus additional punitive damages.
However, Merck KGaA scored a legal victory over Merck & Co. when a British court found that the Merck & Co. entity, Merck Sharp & Dohme, breached an agreement with Merck KGaA by using the name "Merck" solely, in the UK. The court concluded that this breached a 1955 signed agreement.
Price fixing settlement
Generics UK (Merck's former British subsidiary, the global Generics business being sold on October 2, 2007) paid a £12M out-of-court settlement with the Department of Health over involvement in an alleged price and supply fixing cartel.
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 the supply 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. 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.
The following is an illustration of the company's mergers, acquisitions, spin-offs and historical predecessors:
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 also played role 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. 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. Products 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.
Merck currently employs over 2500 people in its 4 R&D hubs viz. Boston, Darmstadt, Beijing and Tokyo. In the year 2013, Merck invested over €1183 million in its R&D operations. 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.) Other products from Merck include Metformin, Bisoprolol, Levothyroxine and Digitoxin. Merck's clinical research strategy consists of a partnership with Quintiles in which the latter helps the former in the clinical development of all its compounds.
In the chemicals sector, work started on effect pigments in 1957. An example for these pigments are alumina effect pigments sold under brand name Xirallic® 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. Currently they're the world leader in producing liquid crystals for Flat-TV's and monitors.
The Merck Millipore business was created in July 2010 following the completed acquisition of the US company Millipore. This division comprises all Millipore activities and major segments of the former Merck division Performance & Life Science Chemicals. Merck Millipore has three business units: Bioscience, Lab Solutions and Process Solutions. The Bioscience business unit is dedicated to solutions and reagents for protein research and cell biology, cell culture solutions, as well as to products and services for the development of biopharmaceutical agents. The scope of activities of Lab Solutions includes laboratory chemicals and other materials for research, science and industry, products and services for sampling, and test kits for the pharmaceutical, foods and diagnostics industries, along with products, consumables and services surrounding highly purified laboratory water for science and industry. Process Solutions focuses on products and services for the production of chemical and biopharmaceutical agents.
Merck is a pioneer in the field of LCD technology and the world’s largest producer of liquid crystals, which are required for the manufacture of LC/TFT displays. The global market share is over 60%. As a result, the company is considered to be a so-called hidden champion. In March 2005 Merck acquired Covion Organic Semiconductors GmbH, a part of the Avecia Group. The company, originally a split-off from the Hoechst AG, and headquartered in the Höchst Industrial Park, produces organic light-emitting materials for OLEDs. Now renamed in Merck OLED Materials GmbH, the company is an essential element in the liquid crystal segment. Merck paid 50 million Euros for the acquisition, which included a research and development unit in the polymer electronics sector, and which is located in Manchester.
On April 2, 2007, Merck announced the liquidation of OLED Materials GmbH, with assets to be transferred to Merck KGaA. 100 employees were integrated into the liquid crystal division. The Liquid Crystals sector also includes materials for photovoltaics and the lighting industry.
Pigments & Cosmetics
This business unit pools all activities for pigments in lacquering, printing and plastic applications, in the field of security technology (for instance counterfeiting protection), pigments for applications in the food and pharmaceutical areas, functional materials, and active substances and pigments for cosmetics.
- "Press Release: Merck Completes Sigma-Aldrich Acquisition".
- Das älteste Chemieunternehmen der Welt. In: Manager Magazin 21 September 2006
- M. Richter and I. Gomez: Zum Verwechseln gleich. In: Financial Time Deutschland 21 January 2010 Archived July 26, 2010 at the Wayback Machine
- A Tale of Two Mercks as Protesters Take On Wrong Company, Bloomberg
- Merck KGaA (Editor): „Was der Mensch thun kann...“ – Ein Streifzug durch die Geschichte des pharmazeutisch-chemischen Unternehmens Merck. September 2003
- Palmer, A. Mitchell (April 1919). "Report of the alien property custodian on the chemical industry". Ind. Eng. Chem. 11: 364. doi:10.1021/ie50112a030.
I am of the opinion, however, that indirect ownership of this kind cannot be recognized under the Trading-with-the-Enemy Act, and I have, therefore, determined that the whole of this stock is enemy owned and it has accordingly been taken over.
- Staff (15 January 2016). "Legal Wrangle Pits Merck vs. Merck". Gen. Eng. Biotechnol. News. Retrieved 17 January 2016.
- Schering rät zur Annahme der Bayer-Offerte. In: Manager Magazin Online 19 April 2006
- Serono-Übernahme – Mercks Milliardendeal. In: manager magazin 21 September 2006
- "STOCKS NEWS US-Merck KGaA to buy Millipore for $6 bln". FinanzNachrichten.de. 1 March 2010.
- Merck KGaA and Millipore Announce Transaction
- "Merck KGaA to Buy Chemical Maker AZ for $2.6 Billion". December 6, 2013.
- "Merck KGaA, Oxygen Suspend Development of Drug Candidates". GEN.
- Staff (22 September 2014). "Merck KGaA to Acquire Sigma-Aldrich for $17B". Genetic Engineering & Biotechnology News. Retrieved 5 April 2015.
- Pfizer dampens Astra bid hopes with German Merck cancer deal. Reuters, 17 November 2014
- "Germany's Merck sells rights to Kuvan back to BioMarin Pharma". Reuters. 1 October 2015.
- Divac, Natascha (13 October 2015). "Germany’s Merck Names New CEO". WSJ. Retrieved 14 October 2015.
- "Legal Wrangle Pits Merck vs. Merck". GEN.
- Bowers, Simon (June 30, 2005). "Merck subsidiary pays £12m over price-fixing claims in sales to NHS". The Guardian (London). Retrieved 2007-10-11.
- Lister, Sam (April 6, 2006). "Drug chiefs on price-fixing charges". The Times (London). Retrieved 2007-10-11.
- Merck KGaA, Darmstadt, Germany (14 October 2015). "Innovation - R&D overview - EMD Group". merckgroup.com.
- "Merck Serono discusses its strategic partnership with Quintiles at PCT". Outsourcing-Pharma.com.
- Merck KGaA, Darmstadt, Germany. "EMD Performance Materials - Xirallic® – for coatings with strong colored sparkle effects". emd-performance-materials.com.
- H. Simon: Hidden Champions des 21. Jahrhunderts: Die Erfolgsstrategien unbekannter Weltmarktführer. Campus, 2007. ISBN 978-3-593-38380-4. p. 20.
- W. Huber: Merck KGaA übernimmt OLED- und Polymerelektronik-Aktivitäten von Avecia. Pressemitteilung der Merck KGaA vom 8. Februar 2005
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