Merck Completes Sale of Consumer Care Business to Bayer AG for $14.2 Billion
October 1, 2014 10:30 am ET
Worldwide Collaboration to Market and Develop Portfolio of Soluble Guanylate Cyclase (sGC) Modulators Commences
Merck (NYSE:MRK), known as MSD outside the United States and Canada,
said today it has completed the previously announced sale of the Merck
Consumer Care (MCC) business to Bayer AG. Effective today, Bayer will
acquire Merck’s existing over-the-counter business, including the global
trademark and prescription rights for CLARITINTM and AFRINTM,
for $14.2 billion or approximately $9 billion in after-tax proceeds,
less customary closing adjustments as well as certain contingent amounts
held back that will be payable upon the manufacturing site transfer in
Canada and regulatory approvals in Mexico and Korea.
“The proceeds from this sale, combined with our strong operating cash
flow, give us greater flexibility to invest in opportunities that
augment the company’s pipeline and product portfolio, such as the
purchase of Idenix to strengthen our hepatitis C portfolio, while at the
same time continuing to return capital to shareholders,” said Kenneth C.
Frazier, chairman and chief executive officer, Merck.
In conjunction with this transaction, Merck has also entered into the
previously announced worldwide collaboration between the companies to
develop and commercialize soluble guanylate cyclase (sGC) modulators.
This collaboration, effective today, includes Bayer’s ADEMPASTM
(riociguat), the first in a novel class of compounds and the only
treatment approved for both pulmonary arterial hypertension (PAH) and
chronic thromboembolic pulmonary hypertension (CTEPH), as well as the
investigational compound vericiguat that is currently in Phase 2
development. The collaboration also includes opt-in rights for other
early-stage sGC compounds in development by both companies. Merck will
be making an upfront payment of $1 billion in connection with the sGC
As previously communicated, the two companies will equally share certain
costs and net sales for all products and candidates included in the
collaboration, with additional milestone payments due upon the
achievement of agreed-upon sales goals. For ADEMPASTM, Bayer
will continue to lead commercialization in the Americas, while Merck
will transition to lead commercialization in the rest of the world. In
order to preserve business continuity in markets outside of the Americas
where ADEMPASTM is launching, Bayer will continue to provide
commercialization support on behalf of Merck for a period of time.
Working together, both companies will have the resources, capabilities
and experience to realize the full potential of ADEMPASTM and
the promising class of sGC modulation therapy.
Today’s Merck is a global healthcare leader working to help the world be
well. Merck is known as MSD outside the United States and Canada.
Through our prescription medicines, vaccines, biologic therapies and
animal health products, we work with customers and operate in more than
140 countries to deliver innovative health solutions. We also
demonstrate our commitment to increasing access to healthcare through
far-reaching policies, programs and partnerships. For more information,
and connect with us on Twitter,
This news release includes “forward-looking statements” within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. These statements are based
upon the current beliefs and expectations of Merck’s management and are
subject to significant risks and uncertainties. There can be no
guarantees with respect to pipeline products that the products will
receive the necessary regulatory approvals or that they will prove to be
commercially successful. If underlying assumptions prove inaccurate or
risks or uncertainties materialize, actual results may differ materially
from those set forth in the forward-looking statements.
Risks and uncertainties include but are not limited to, general industry
conditions and competition; general economic factors, including interest
rate and currency exchange rate fluctuations; the impact of
pharmaceutical industry regulation and health care legislation in the
United States and internationally; global trends toward health care cost
containment; technological advances, new products and patents attained
by competitors; challenges inherent in new product development,
including obtaining regulatory approval; Merck’s ability to accurately
predict future market conditions; manufacturing difficulties or delays;
financial instability of international economies and sovereign risk;
dependence on the effectiveness of Merck’s patents and other protections
for innovative products; the exposure to litigation, including patent
litigation, and/or regulatory actions.
Merck undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise. Additional factors that could cause results to differ
materially from those described in the forward-looking statements can be
found in Merck’s 2013 Annual Report on Form 10-K and the company’s other
filings with the SEC available at the SEC’s Internet site (www.sec.gov).
Pamela Eisele, 267-305-3558
Steve Cragle, 908-423-3461
Joe Romanelli, 908-423-5185
Justin Holko, 908-423-5088