This is both a continued merging of resources with the purchase of Schering Plough and better utilization of present facilities. Merck is heavy in cash resources too and a few months ago purchased Millipore in Massachusetts which is an outsourcing company involved in many areas of R and D to include clinical trials so now that they own Millipore, the need for their own internal research and development could be a duplication or as usual more effectively done cost wise with an outsourced company. Millipore has many international locations.
Also earlier this year Microsoft purchased their Rosetta Biosoftware so things are changing a a lot of rethinking an new organizations going on.
Merck is also making it’s presence in the Biosimilar business and this could also stand to enhance this effort as well with creating biosimilar or follow me drugs at a smaller fraction of the cost of what we see on the market today.
It certainly appears that diversification is the name of the game here as recent purchases will enable the company to cover more than just single market areas and actually sell some services to other pharma companies in the process. One thing too that Merck has done in their chemical division is manufacture the the component that makes our computer screens come to life, as the chemical division puts a lot of profit to the bottom line with their product being used in many computer monitors we have today. BD
Questions about where Merck’s cost-cutting ax would fall have been answered.
The pharma giant said today it would wind up operations at eight research sites and eight manufacturing facilities in order to achieve the projected $3.5 billion in savings the company promised as part of its purchase of Schering-Plough. You can read the complete Dow Jones Newswires story here.
The plans announced today get the company to between $2.7 billion and $3.1 billion of the way to its target, Merck says.
Research sites being shuttered over the next two years are in Montreal, the Netherlands (three facilities), Denmark, Germany, Scotland and Cambridge, Mass. Manufacturing plants are in Italy, Portugal, Mexico (two sites), Brazil, Argentina and Miami Lakes, Fla. Merck will also phase out chemical manufacturing at one site in Singapore but will continue to make drugs there and at another Singapore facility that was part of Schering-Plough.
Together with prior site closures, Merck's global manufacturing network will shrink to 77 facilities from 91 at the close of the Schering merger. This includes 29 animal-health plants slated to become part of a planned joint venture with Sanofi-Aventis SA's (SNY) Merial unit.