Serona buyout gives us a footprint in the US: Merck

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Executive board member, Merck, Elmar Schnee's company has just bought over a biotech firm, Serono. So, what are the other moves, he plans to make to take forward the synergy, which this acquisition has afforded him? Excerpts from an interview given to CNBC-TV18

Q: About the company's recent acquisition of the biotech firm Serono?

A: Ofcourse with this acquisition we have now first class, world-class knowledge on both sides -meaning we acquired Serona a fantastic biotechnology platform on which we can build. On the Merck side, being a old chemical and pharmaceutical company, we have world class knowledge on the chemical side and I think the combination will give the best from both worlds, and that is a extremely good platform to go ahead on.

Q: Will you be looking at such possibilities also from the Indian context?

A: In India, we have our own operations, India is extremely interesting country because there is a lot of knowledge created even in chemicals but also in biotechnology now and we have tried to work together with Indians. We have some people now based in India who look at pipelines and companies, and we are permanently screening the market, not only in India, but worldwide, to see where we can find some new products which can complement our own pipeline.

Q: You are probably the strongest in Europe with you strong biotech lineup, how do see that spreading across the globe, do you have some bigger plans coming up in North American markets?

A: The acquisition of Serono did not only bring us the biotechnology platform but it also brought us a bigger footprint in USA and that was one area we needed. The second one was, we could double our R&D expense, we are spending currently roughly euros 1 billion a year in R&D, which allows us to improve our pipeline better and we always have some projects which have a higher risk but are very innovative. Before, we were not able to do this because you cannot have everything on a higher risk level as a company.

Q: What are the future key growth drivers?

A: With Serono, we acquired one of the most efficient producers of biotechnology. If you look at their margins last year, there was constantly an upgrade in gross margins and we are well positioned now.