Merck KGaA is banking on its newer multiple sclerosis product Mavenclad to pick up the slack as sales of Rebif continued to decline in the second quarter.
Multiple sclerosis is a chronic disease of the central nervous system that causes damage to nerve cells in the brain and spinal cord, resulting in an unpredictable array of symptoms. The condition affects 2.3 million people globally.
Rebif belongs to a class of drugs called interferon beta and is approved for treating remitting-relapsing forms of MS. The therapy's second-quarter sales were hit by a difficult competitive situation in Europe and North America's interferon markets as well as competition from oral dosage forms, resulting in an organic sales decline of 16.1% to €331 million.
Sales of Mavenclad — an oral short-course treatment for MS — more than tripled in the same period to €61 million. The therapy was approved in the U.S. in March, and 24% of the drug's sales during the quarter came from North America.
The Darmstadt, Germany-based company's CEO, Stefan Oschmann, is optimistic that the declining sales of Rebif — one of the company's most profitable products — will continue to be compensated by Mavenclad.
"Mavenclad is also very, very profitable. From the second half of this year onwards, we expect more Mavenclad contributions than Rebif decline," Oschmann said during the company's Aug. 8 earnings call. "And that should also give some relief on the gross margins from now on."
Oschmann is also sanguine about Mavenclad's use in the U.S. due to improved clinical perception, but the CEO admitted that the country is a "very different market" compared to international markets. The product will have a different label in the U.S., where 86% of neurologists are willing to prescribe Mavenclad, the executive said.
Life sciences growth
Merck's second-quarter pre-exceptional EBITDA totaled €1.14 billion, an increase of 23.8% from €920 million in 2018. Net sales were €3.97 billion, an increase of 6.9% from €3.71 billion in the year-ago period.
The company's life sciences segment, which saw its sales grow by 9% on an organic basis to €1.71 billion during the quarter, was the largest contributor to Merck's overall sales.
Oschmann, speaking about the sustainability of the segment's growth, said the company has a "certain portfolio advantage" that focuses on the higher growth segments of the market such as bioprocessing diagnostics.
"We think we also outperform the market, we grow faster than others in the relevant market segments," Oschmann said. "We have a broad range of differentiated products and services and we believe that we have a superior platform."