Germany’s Merck KGaA says that fourth-quarter 2007 net income soared but its operating profit fell 20.6% as the Darmstadt-based firm reported higher-than-expected charges.

Net income came in at 3.40 billion euros, up from 130.6 million euros in the like, year-earlier quarter, boosted by the sale of its generics business to Mylan Laboratories for 4.9 billion euros. Most of the proceeds were used to repay essentially all the debt resulting from the purchase of Serono, which closed in January 2007.

Hoiwever analysts were slightly disappointed with the results as operating profit fell to 166.1 million euros, hurt by a 54 million euro charge connected with Serostim (somatropin) to treat muscle wasting in patients with AIDS and a further 75 million euros involved with restructuring after the purchase of Serono.

Nevertheless the contribution of the latter has proved highly beneficial to turnover growth for Merck. Group sales leapt 56.8% to 1.81 billion euros and pharmaceutical revenues more than doubled to 1.26 billion euros.

Sales of the multiple sclerosis treatment Rebif (interferon beta-1a) rose 11% (or 5.1% due to currency effects) to 317 million euros. The cancer drug Erbitux jumped 33% to 127 million euros in the quarter while full-year sales of Merck’s “classical pharmaceuticals” were impressive. The beta blocker Cardicor/Concor (bisoprolol) was up 9.0% to 379 million euros, while its Glucophage (metformin) diabetes products increased 6.6% to 266 million euros.

Merck chairman Karl-Ludwig Kley said that 2007 “was a year of major accomplishments” and the firm produced the strongest financial results in its long history. The board has an increased regular dividend of 1.20 euros and a one-time sweetener to shareholders of 2.00 euros, and Dr Kley added that “even in these uncertain economic times, we expect 2008 will be another year of solid growth”.

Matuzumab development terminated
On a less positive side, Merck and partner Takeda Pharmaceutical Co have decided to halt the development of cancer drug matuzumab after its mid-stage trials failed to meet expectations.

The decision to terminate development comes as no surprise as a Phase II trial investigating matuzumab, a humanised monoclonal antibody, in combination with irinotecan in patients with metastatic colorectal cancer who had already failed on multiple prior treatments, did not meet its predefined endpoint of activity.