Costs and takeover charge hit Merck net

By George Frey | July 25, 2009, Saturday |

Print Edition

GERMAN drug and chemical maker Merck KGaA said yesterday its second-quarter net profit tumbled 48 percent as higher research costs and one-time effects from the acquisition of Serono weighed on the bottom line.

The Darmstadt-based company reported a net profit of 108 million euros (US$153 million) in the April-June period compared with 207 million euros a year earlier.

Sales for the quarter were nearly unchanged at 1.9 billion euros.

The company changed guidance slightly on some of its business units, but reiterated its previous overall guidance of 2009 group revenues remaining steady or rising up to 5 percent. The group's return on sales is expected at between 15 percent and 20 percent for the year.

"It is clear to see that the world remains in the midst of the economic crisis," Karl Ludwig Kley, the company's chief executive, said. "Merck is also feeling its effects but to a lesser extent than many companies. We are able to continue investing in the development of innovative products that will secure our future."

The company said its research and development costs jumped by about a quarter to 341 million euros in the April-June period, which was attributable to clinical trials on medicines. Also, it said it booked a charge of 146 million euros related to the acquisition of Serono, a Swiss biotechnology company Merck bought in 2006.

Manufacturing

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Costs and takeover charge hit Merck net

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