Biotech Values

[DewDiligence]

MRK Makes Big Bet on China

[See #msg-66847069, #msg-59590951, #msg-49465915, #msg-53041685, #msg-48221898, #msg-47908751, and #msg-47510095 for related stories.]

http://www.thestreet.com/_yahoo/story/11334445/1/merck-betting-big-on-growth-in-china.html

›By Alexandra Zendrian
12/06/11 - 01:54 PM EST

NEW YORK (TheStreet) – Merck (MRK) is putting $1.5 billion into research and development in China over the next five years starting with an R&D headquarters in Beijing.

Six hundred employees are expected to be put to work once the first phase of construction is completed in 2014. The facility will operate in drug discovery, translational research, clinical development, regulatory affairs and external scientific research programs, Merck said.

"The establishment of the MSD Asia R&D headquarters represents an important milestone as we implement our strategy of building capabilities, and relationships to succeed in fast growing geographic regions," said Peter Kim, the president of Merck Research Laboratories, in a press release. "By strategically locating in China, we are able to complement our existing R&D capabilities, and facilitate new collaborations with scientists in the region and across emerging markets."

Merck said in November that it views the United States, Japan and China as its three critical markets. The Dow component is hoping to reach 400,000 physician customers in China by the end of 2012, up from its current 207,000 customers in the country.

Merck's competitors, including Pfizer (PFE) and Abbott Laboratories (ABT), are also expecting significant growth from China [see #msg-59590951].

Pfizer has said it expects China to be its third largest market by 2015, and its second largest market in 2017.

Approximately 25% of Abbott's sales in 2010 came from the emerging markets, according to its 2010 annual report. That number is anticipated to reach one-third of total sales by 2015.‹