Germany-based Merck KGaA won't be restocking its ailing R&D pond via megadeals this year, despite major setbacks in the pharma and chemical company's drug pipeline. Company CEO Karl-Ludwig Kley informed investors today that his company would be focusing on its previously revealed cutbacks while avoiding large M&A deals through 2013, Reuters reported.
German Merck has struggled on the pharma front in recent years. Notably, the FDA shot down Merck Serono's MS pill cladribine last year, damaging the company's future plans to grow its multiple sclerosis drug business. And the cladribine fiasco is only a symptom of a much wider ailment in a Serono pipeline that has failed to inspire. Now the company believes that it has to tighten its belt and reduce its workforce.
Kley hasn't specified how many workers will get the ax. According to Reuters, the company plans to slash costs through 2018, with job cuts as one area of emphasis for reducing expenses. The firm wave of restructuring is expected to last through 2013, during which time Kley plans to shun big and expensive takeovers, Dow Jones Newswires reported. Yet the silver lining for biotechs could be that smaller deals and licensing agreements remain on the table.
"We do not plan to make any major acquisitions during this first phase of the program. However, we will continue to strengthen our business through in-licensing or targeted acquisitions if the opportunities arise," CEO Karl-Ludwig Kley said, as quoted by Reuters based on his prepared remarks for Merck's annual shareholder meeting.