Investment opportunity assessment and deal making
Hanna Zwietering on her internship at Merck Serono, August 2009
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“Merck Serono is the pharmaceuticals division of the Merck KGaA Group, which also has a chemicals division. The pharmaceuticals branch of the company was merged with Serono, when that company was acquired by Merck, in 2007. Together the company is now called Merck Serono and still under the ownership of the Merck family. Today it is the 12th generation of this family that controls most of the company: Merck KGaA was first listed on the Frankfurt stock exchange in 1995, and currently around 30% of the total capital is publicly traded, with most of the remainder privately held by the family. See fig 1 for an illustration of the organization of the Merck Group.
Despite the worldwide economic crisis, total revenues for the Merck Group increased in 2008 by 7% to around € 7.6 billion. Last year nearly three quarters of the total revenue came directly from Merck Serono, with the remainder generated by the chemicals division of Merck.
The Merck Serono product portfolio is divided over five core therapeutic areas:
Neurodegenerative Diseases (NDD), Auto‐ Immune Diseases (AIID), Oncology, Endocrinology and Fertility. Some of the major blockbusters are Rebif® to treat Multiple Sclerosis and Erbitux for metastatic colorectal cancer and head and neck cancer. See also fig. 2 for sales per Therapeutic Area.Merck Serono is headquartered in Geneva, Switzerland, where around 1,200 individuals from more than 50 countries work in one of eight different departments:
Portfolio Development, Research and Development, Marketing, Business Unit Oncology, Europe/US/International, Technical Operations, Human Resources, Communication, Legal and Controlling.
The Portfolio Development (PD) department aims to create and deliver a value‐ and risk‐balanced pipeline to help achieve Merck Serono’s growth and sales targets. Different functions fall within this objective. One of them is to fill potential gaps in Merck Serono’s internal product pipeline by sourcing and harvesting strategically aligned external opportunities that can yield the targeted revenue growth and profitability.
For this purpose the Merck Serono Corporate Venture (MSVC) Fund was recently (March 2009) launched. MSVC has the strategic investment focus to invest in promising early stage biotech companies that operate in one of the five core Therapeutic Areas of Merck Serono. The Fund has an initial commitment to invest up to 40 million Euros in the coming five years.
The goal of my internship was to gain professional experience in the field of biotech venture capital investments and licensing and to learn about the network of VC investors with whom Merck Serono works. The work I did provided me with an inside view of biotech licensing and business development as well as a clear perspective of external venture capital and the general environment at Merck Serono.
Activities related to this internship included (i) the analysis of business plans and investment proposals submitted to Merck Serono Ventures (strategic, financial and scientific analyses), (ii) supporting deal making in externalization, and (iii) preparing for and participating in discussions with VCs and other biotech companies.
I would recommend Merck Serono as an excellent organization for SBB students to do their internship, especially if they have the opportunity to work for the Merck Serono Ventures Group. Not only did working for this corporate venture fund give valuable insights in science‐ and business‐related topics, but it also provided learning experience in a dynamic culture, an inspiring collegiate atmosphere where people are enthusiastic about teaching and involving one another in their many exciting projects.
All of these elements together made my internship an extremely valuable and memorable learning experience.”Find more information on SBB internships and more SBB internship experiences on our website.
