Merck KgaA to restructure French pharma activities

Merck KgaA, of Darmstadt in Germany, is planning to restructure its pharmaceutical activities in France, including the closure of its Lacassagne r&d and production site in Lyon, which will affect 320 jobs.

The recommendation for this project came as a result of two major independent restructuring and optimisation studies covering production and supply-chain as well as pre-clinical R&D. The studies were initiated in 2002 and 2003 to enhance efficiency and realise synergies in Merck's pharmaceutical business sector to secure the global competitiveness of Merck in these key areas.

According to the project plan, pre-clinical r&d in the area of diabetes and its complications, conducted by 160 employees, would be terminated at Lacassagne by the end of 2004. Merck intends to refocus and concentrate research activities in France at its existing diabetes research center in Chilly-Mazarin near Paris. Non-clinical development activities would be shifted to existing centres within the Merck Group, where and if appropriate.

This step also comes as a consequence of Merck's earlier decision to stop development of three early-stage diabetes projects. In spite of this setback, Merck will continue its diabetes research and will actively pursue clinical development in that area.

Pharmaceutical production in Lacassagne, also accounting for 160 employees, would be closed by mid-2006. However, with its existing Semoy facility, Merck wants to keep France as the second-most important European production site for ethical pharmaceuticals in the Merck Group.

Exceptional costs arising from the closure of the site are already part of the provisions that Merck announced in May 2003 and expects to book this year.