Less than a week after issuing an uninspiring earnings guidance for 2009, Merck & Co has made observers sit up again after it unveiled plans to creating a $1.5 billion division, Merck BioVentures, which will develop both follow-on and novel biologics.

At its annual business briefing, the New Jersey-based major said that Merck BioVentures will employ the glyco-engineering technology secured through the acquisition of GlycoFi in 2006, to become “a leading provider of follow-on biologics”. The latter “represent a significant market opportunity due to the extensive patent expiries of leading biologics scheduled to occur through 2017”, the firm added.

Merck's first follow-on biologic programme, MK-2578 for anaemia, is in clinical development and the company plans to launch the compound in 2012. It anticipates having at least five such follow-on biologics in late-stage development by then.

The firm added that emerging markets will also become more of a focus and Merck is on track to achieve its goal of $2 billion in sales in those areas by 2010. The company is also making significant investments in countries such as China and India, “with the goal of attaining a leadership position in those markets over the long term”.

Also at the meeting, Peter Kim, president of Merck Research Laboratories, noted that the drugmaker expects to file three New Drug Applications next year, including MK-0974 (telcagepant) migraines and MK-7418 (rolofylline) for acute heart failure. It will also file MK-0653C (ezetimibe/atorvastatin), ie a combination of Lipitor and Zetia, for the treatment of dyslipidemia which being developed by the Merck-Schering Plough joint venture. If approved, the drug will not be launched until 2011 when Lipitor loses patent protection.

The company is also working on two supplemental filings for its human papillomavirus vaccine Gardasil (for adult women up to 45 and for men) males) and one for the HIV drug Isentress ((raltegravir) for use in treatment-naïve patients.

Chief executive Richard Clark said that “next year will continue to be a period of fundamental transformation that establishes Merck as a different competitor for the next decade”. He claimed that the firm will “emerge leaner and more responsive to our customers' needs and with a pipeline that offers significant potential…this new Merck will be built for the new era that our industry has entered – and it will be built for long-term success".