* Top executive says private equity could co-fund R&D
* Merck trying to rebuild pipeline after setbacks
FRANKFURT Oct 14 Merck KGaA said it
was in talks with private equity firms and other investors to
share the cost of some clinical trials, part of the German
healthcare group's effort to secure long-term growth.
Merck, which is seeking to rebuild a drugs pipeline weakened
by a slew of setbacks, is vying with much larger global rivals
such as Novartis and Pfizer for licensing
deals with biotech research firms.
Pharmaceutical companies often team up with each other to
share the financial burden of testing drugs, developed either by
themselves or biotech firms, on humans. Costs can run to
hundreds of millions of euros.
But Merck is hoping to tap a new source of funding in the
shape of private equity, which has largely shunned the high-risk
business that requires deep knowledge of medicine and regulatory
With 6.9 billion euros ($9.4 billion) in sales from
prescription and over-the-counter drugs in 2012, the German
group, which has no affiliation with its namesake U.S. peer
Merck & Co, is about 1 billion short of the global pharma
sector's top 20.
However the drugmaker, controlled by the Merck family of
about 150 descendants of the company's founder, has said it was
determined to hold its own against larger rivals.
Merck is also exploring more "risk-sharing" deals under
which the company would receive a fee linked to the success of
some of its products including in-vitro fertility treatments,
the Financial Times cited head of healthcare Stefan Oschmann as
Late-stage trials for a cancer drug typically costs between
150 million and 400 million euros. That cost rises to as much as
600 million euros for multiple sclerosis drugs, he said.
According to Deutsche Bank analysts, trials in the third and
last phase of testing required for market approval account for
over 35 percent of a drug company's research and development
spending on average.
Analysts expect Merck's two main products, multiple
sclerosis drug Rebif and cancer drug Erbitux, to reach peak
sales in 2013 and 2014, respectively.