Darmstadt, Germany-based Merck KGaA saw its profit after tax crash 75% to 60.2 million euros, after posting a particularly strong result for the year-ago period and as flat revenues were dragged down by significant substantial-time charges and a poor performance by its Chemicals unit.

The company booked total sales of 1.9 billion euros for the quarter, slipping just 0.2% from the first quarter of 2008, as significant falls in its Chemicals and Liquid Crystals divisions were buffered by a strong rise in pharmaceutical sales.

“All in all, the Merck Group performed solidly during the first quarter of 2009. However, Merck is not an island [and] the recession is affecting the company’s results, mainly in the Chemicals business sector,” the group explained in a statement.

Merck’s Pharmaceuticals segment enjoyed a 9.7% rise in turnover to 1.4 billion euros, driven by an 11% increase in sales from Merck Serono to 1.3 billion euros on the back of solid growth of products such as: Rebif (interferon beta-1a) for MS, up 18% at 368 million euros; the cancer drug Erbitux (cetuximab), climbing 11% to 162 million euros; and Gonal-f (follitropin) fertility products, jumping 17% to 134 million euros.

Costs up
However, research and development costs climbed 9.1% to 272 million euros, the division booked a charge of 145 million euros relating to the acquisition of Serono in 2007, and other expenses were also on the rise, driving the unit’s operating result down 3.1% to 176 million euros.

Still, the company remains confident that the pharmaceuticals unit will continue to perform well despite the tough economic conditions. Commenting on the coming year, Dr Karl-Ludwig Kley, Chairman of the Executive Board of Merck KGaA, said it will be a “challenge for Merck” but stressed that the pharmaceuticals business remains strong.

For 2009, the group is predicting revenue rises from Merck Serono, by 6%-9%, and Consumer Health Care, by 5%-9%, but is expecting a 20%-30% drop in Liquid Crystals sales and zero growth in its Chemicals division. Overall, this should see the Merck Group book sales growth of 0%-5% for 2009.