Back to top

Analyst Blog

Merck KGaA (MKGAF) recently announced a definitive agreement to acquire Berlin, Germany-based Biochrom AG. Biochrom AG, which specializes in the production and marketing of cell culture media and buffer solutions, posted sales of approximately €13 million in 2011. The company also reported a total workforce of approximately 60 in 2011.

The financial terms of the deal were not disclosed. Subject to the necessary regulatory approvals, the transaction is expected to close in the fourth quarter of 2012.

The acquisition should support Merck Millipore’s Process Solutions business unit, which concentrates on simplifying the complexities faced by pharmaceutical and biopharmaceutical manufacturers.

The innovative cell-culture media products at Biochrom AG complements Merck Millipore’s Process Solutions business unit by adding liquid cell-culture media and buffers.  These include disposable packaging solutions and serum-free products.

Merck Millipore, a division of Merck KGaA, consists of three units - Bioscience, Lab Solutions and Process Solutions. This division was formed following the acquisition of Millipore Corp. in July 2010.

We note that Merck KGaA was in the news recently due to a collaboration agreement signed between Dr. Reddy’s Laboratories Ltd. (RDY - Analyst Report) and Merck Serono, a division of Merck KGaA, for the co-development and commercialization of a portfolio of biosimilar compounds in oncology, primarily focused on monoclonal antibodies (MAbs).

As per the deal, Dr. Reddy’s will be responsible for early product development and will complete phase I studies. Depending on the success of the phase I program, Merck Serono will take over manufacturing of the compounds and initiate phase III development. Research and development costs (R&D) will be shared by the partners.

Merck Serono will commercialize compounds developed under the agreement globally, outside the US and a few areas which are co-exclusive or where Dr. Reddy’s enjoys exclusive rights. In the US, both companies will co-commercialize products on a profit-sharing basis.

Our Recommendation

Merck KGaA currently retains a Zacks #4 Rank (short-term Sell rating).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
PLANAR SYST… PLNR 4.34 +4.58%
CENTURY ALU… CENX 22.47 +4.22%
ERBA DIAGNO… ERB 2.89 +3.58%
MALLINCKROD… MNK 71.99 +3.57%
GTT COMMUNI… GTT 12.03 +3.26%