Merck wants to make China leader in oncology treatment

The headquarters of Merck Serono SA, in Geneva, Switzerland. Its Chinese division sells 14 products in eight major medical areas, including fertility, oncology and diabetes. [Photo / Associated Press]

Belen Garijo, president and CEO of German pharmaceutical company Merck Serono SA, has pledged to build the company's Chinese division into a world leader in oncology treatment, during an interview after a panel discussion at the APEC CEO summit.

"We will bring the research to China, develop the compounds, and become a leader in oncology here in the next five to 10 years," she said.

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"We have a clear vision in China - by 2020, we will achieve $1 billion in sales and during this process we will keep bringing new medicines to the country."

Established in Darmstadt, Germany in 1668, Merck operates in 66 countries with 38,000 employees. Merck Serono is its bio-pharmaceutical division and specializes in treating prevalent chronic conditions such as cancer and metabolic diseases.

The company's 2013 financial report shows sales of 5.95 billion euros ($7.42 billion), with Europe contributing 42 percent, North America 21 percent and emerging markets, especially China and Brazil, 30 percent.

"Sixty percent of our growth comes from emerging markets," Garijo said, noting that the global pharmaceutical industry is growing at mid-single digit levels, and China is among the fastest-growing markets. The Chinese division now sells 14 products in eight major medical areas, including fertility, oncology, thyroid disease and diabetes.

In August it broke ground on a new 80 million euro manufacturing facility in Nantong, Jiangsu province, which will become its second-largest manufacturing site when fully operational in 2017.

"To start with the manufacturing center will mainly focus on Chinese needs, but in longer term we hope it will become a site supplying the global market," Garijo said.

"Most of our biological products are made currently at our European site, so this plant will be the first to serve China - we are calling it our 'China for China factory'."

Merck Serono currently has four research and development centers around the world, in Boston of the United States, Darmstadt in Germany, Beijing and Tokyo. While those centers operate on a global basis, they also have a mission to determine regional requirements which can also feed into its global development platform.

In Beijing, its research clinic has a special focus on oncology and immunology, as the diseases are more prevalent in China than in Western countries. New patients with esophageal cancer, for instance, in China represent around half of the world total.

The company is also actively involved in China's ongoing healthcare reforms, it said, by aiming to provide essential medicines at affordable prices.

Allan Gabor, its president and CEO in China, said basic medicine is the cornerstone of the country's healthcare reform, and that the company plans to stay in line with that.

"It's not all about margins," he said. "We know the technology and have had these products for a long time. We can transfer those high-quality products to China and will also be producing locally to help bring down the cost."

Garijo said there is a constructive conversation going on between the industry and the government to achieve affordable and effective treatment for patients.