A history of… Merck KGaA

Hannah Blake

pharmaphorum

Our latest article looks into the history of German company Merck, which is the oldest pharmaceutical company in the world.

Merck is the oldest pharmaceutical company in the world. Its origin dates back to the year 1668, making it nearly 350 years old! But it’s also one of the most confusing, so let me try and explain briefly, before we go deeper into the history…

1668 – Friedrich Jacob Merck acquires the Angel Pharmacy, which became the heart of Merck (and is still owned by the Merck family today).

1891 – Merck in Germany became Merck KGaA or “German Merck” and a United States subsidiary called Merck &amp, Co., Inc. was established in New Jersey.

1917 – As a consequence of World War I, Merck lost its subsidiaries abroad, including its American subsidiary Merck &amp, Co., which then became an independent U.S. company.

2013 – Today, Merck KGaA and Merck &amp, Co are two separate companies. Merck &amp, Co. holds exclusive rights to the name Merck in North America (and is known as MSD outside of America and Canada), while Merck KGaA in Germany holds the same rights in the rest of the world (and is known as EMD Chemicals in the US).

In this article, we will be looking into the 350 years of Merck KGaA and then in next month’s ‘A history of…’ article, we will look into Merck &amp, Co, since its establishment in 1891.

Merck KGaA – the beginning

“So where did this pharma company begin?” I hear you ask. Well, it began with a 20-year-old from Schweinfurt in Germany whose dream was to be successful.

After completing an apprenticeship at a pharmacy in Schweinfurt, Friedrich Jacob Merck left his hometown of Schweinfurt in 1641 and went on to manage the court pharmacy in Danzig. He also owned a pharmacy in Wesselburen, located in Schleswig-Holstein, before moving to Darmstadt in the 1660s.

As luck would have it, also during the 1660s, court pharmacist Samuel Böckler received permission from Landgrave Georg II to establish Darmstadt’s second public pharmacy, which he then put up for sale.

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“…it began with a 20-year-old from Schweinfurt in Germany whose dream was to be successful.”

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In 1668, Friedrich Jacob Merck acquired the pharmacy, which he called Angel Pharmacy. And this is where it all began. Even to this day, the Angel Pharmacy still belongs to the Merck family.

During the 1660s, pharmacists used a variety of natural ingredients to produce medical compounds, as found in The Pharmacopoeia Augustana. (Published in 1564, this remained as the definitive reference work until the beginning of the 18th Century.) However, the formulations were often imprecise and the regulations inconsistent. When Friedrich Jacob Merck died in 1678, his nephew, Georg Friedrich Merck succeeded, but it wasn’t until 1682 that he received permission to continue operating the Angel Pharmacy.

It was at the turn of the 18th century when major changes were made to drug legislation. Government regulation of medical professions increased and the institutional supply of the population began to be regulated by what was known then as the “medical police”. The increase in regulation strengthened the position, reputation and profits of pharmacies.

It was in 1720 that the third generation of the Merck family came face-to-face with these new regulations. Johann Franz Merck was sentenced to pay a fine after issuing a substance to a man “contrary to medical regulations”. However, after investigations, Johann was relieved of all guilt, even by the Church, and the punishment was abated.

Johann Franz Merck’s Baroque gravestone says he was a man who “made great contributions to the pharmaceutical arts” and it features a coat of arms with a figure dressed in medieval clothing holding a flowering branch in his hand. In the 19th Century, it was this image of the “Chamomile man” that became the Merck family’s coat of arms and also the symbol for the pharma company. (This logo was used as until the 1950s.)

The company was then run by Merck’s fourth generation, Johann Justus Merck. However, in the year 1958, both Johann Justus and his wife Anna Sophie died. Their designated heir, Johann Anton, was not even two years old and what happened to the management of the company during the next two decades is unclear. Merck’s history states that an “acting pharmacist” took over until Johann Anton was old enough to run the business. But Johann Anton took his time and visited the University of Strasbourg in Switzerland to learn more about pharmacology and medicine. During this period, Johann Anton gained “a reputation for outstanding knowledge through research into natural products” which “makes him far better educated than the other pharmacists of his era”.

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“It was during the 1820s when Merck first established business relationships in other European cities…”

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In 1816, another member of the family, Emanuel Merck, took over the Angel Pharmacy. His scientific education led to a fascination of the chemistry of natural substances, especially alkaloids. In 1827, his knowledge enables him to succeed in the preparation of multiple kinds of pure alkaloids, which attracted the attention of the scientific community. In 1826, he published the results of his work on opium and morphine in the “Magazin für Pharmacie”. This represented a milestone in the transformation from pharmacy handcraft to a research-based industrial company.

It was during the 1820s when Merck first established business relationships in other European cities, including Basel and Paris. In 1891, Merck publicly established its American branch under the name Merck &amp, Co in New York for the “sale of excellent chemicals, alkaloids and pharmaceutical preparations”. By 1900, Merck had set up business relationships on every continent.

In 1895, Merck established a department of bacteriology in Germany. Production comprised smallpox vaccines, diagnostics for tuberculosis and typhus, as well as sera for anthrax, streptococci, pneumococci and diphtheria.

The effects of the two World Wars

The year 1918 marked the 250th anniversary of Merck.

“A company must not only pursue production and sales objectives, but also meet far-reaching social responsibilities.”

Willy Merck, partner in the company in 1918.

However, this anniversary was overshadowed by World War 1.

As a consequence of World War 1, Merck lost its subsidiaries abroad, including its American subsidiary Merck &amp, Co, which went on to become an independent company.

(Read next month’s ‘History of…’ to find out what happened to Merck &amp, Co.)

Around this period of change, Merck systematically patented many drugs – the focus was directed at vitamins as a new product category. In 1927, Merck and Bayer co-marketed the first standardized vitamin D product called Vigantol (cholecalciferol) which was urgently needed to treat rickets – at the time rickets was still a common deficiency disease, particularly among children. Following the success of Vigantol, Merck manufactured additional vitamins that were derived from natural raw materials. The first vitamin C product was launched under the name Cebion (Acidum ascorbicum) in 1934.

During World War 2, many employees of Merck were conscripted into the army so to make up the shortage of staff, women were encouraged to work. In December 1944, a targeted air raid destroyed most of the German site.

“It did not appear as though the company could operate in the global market again in the foreseeable future,” said a contemporary witness in 1946, according to Merck.

Following World War 2, research and development formed the basis for Merck’s growth. The company also succeeded in requiring some of its lost subsidiaries, including those in Spain and South America. Merck resumed its export business in 1947.

In 1949, Merck launched Digitoxin Merck (which has been known as Digimerck since 1953), which became an indispensible cardiology drug. In 1953, Merck launched cough medicine Pectamed.

In the early 1950s, corticoids were a highly topical research field, providing hope for many patients. Merck acquired licenses for a microbiological process to manufacture prednisone and prednisolone. Between 1959 and 1970, Merck was granted 34 patents in Germany involving the use of biotechnology.

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“Today, NASA equips its space missions with Merck’s decongestant oxymetazoline…”

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In the mid-1950s, gerontology played an increasingly important role, started with the launch of Gerobion, which was the first vitamin combination product for geriatric health.

One small step for mankind, one giant leap for … Merck

On July 21st 1969, Apollo 11 accomplished the highlight of its mission as Neil Armstrong and Edwin Aldrin became the first men to set foot on the moon.

Intensive research was conducted beforehand into the effects of weightlessness on the human body. The astronauts had to be kept under special medical observation on their trip and NASA provided an on-board pharmacy for medical emergencies.

Weightlessness is known to cause the nasal mucous membranes to swell, so it was essential to have a decongestant on board. Today, NASA equips its space missions with Merck’s decongestant oxymetazoline, which is known as Nasivin in Germany.

Merck in the 90s and beyond

In the 90s, research continued to be the basis for product development. The foundation for Merck’s oncology research were laid in the mid-1980s and continued throughout the 90s. Diabetes also became an important therapeutic area for Merck, after the launch of global blockbuster and type 2 diabetes treatment, Glucophage (Metformin).

In 1995, Merck KGaA was formed – it was a corporation with general partners with a volume of DM 2.4 billion. At the time, this represented the largest public offering in German history. Merck KGaA manages the operating business of the Merck Group. The Merck family still owns a majority interest in Merck KGaA via the general partner E. Merck KG.

Merck KGaA reached an important turning point in 1995 when its shares began trading on the stock exchange.

At the end of 2003, the active ingredient cetuximab was approved as Erbitux for the treatment of colorectal cancer. Merck licensed the marketing and development rights to Erbitux outside of the United States and Canada from ImClone Systems in 1998. In Japan, Merck shares the exclusive marketing rights with ImClone (now a 100% subsidiary of Eli Lilly) and Bristol-Myers Squibb. Erbitux ranks among the most successful oncology product launches in Europe.

2007 was a big year for Merck. It was the year in which Merck sold its Generics business for €4.9 billion to Mylan Laboratories Inc, Canonsburg, Pennsylvania, USA. The transaction enabled Merck to focus on the further growth of research-driven specialty businesses in pharmaceuticals, chemicals and life science.

It was also the year in which Merck acquired Serono for € 10.3 billion – the largest ever acquisition in Merck’s history. The company had attempted to buy Schering in 2006, but lost out in a bidding war with Bayer. But Merck wanted to increase its pharmaceuticals business, so made an offer for the Geneva-based biotech company and on completion, improved the company’s global presence.

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“It was also the year in which Merck acquired Serono for € 10.3 billion – the largest ever acquisition in Merck’s history.”

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Another major acquisition for Merck, was that of the Millipore Corporation in 2010. The Millipore Corporation at the time was a leading life science company based in Massachusetts, USA. This became one of Merck KGaA’s main divisions: Merck Millipore, which today employs 10, 000 people in 64 countries.

Merck KGaA in 2013

With around 39,000 employees, Merck is represented today in 67 countries around the world. The current CEO of Merck KGaA is Karl-Ludwig Kley. In 2012, the company generated total revenues of over €11 billion.

Today, Merck KGaA focuses on four main divisions:

1.  Merck Serono

a. This is the largest division, which markets prescription drugs in highly specialized therapeutic areas, including neurodegenerative diseases, oncology, fertility, endocrinology and rheumatology.

2.  Consumer Health

a. This division focuses on over-the-counter pharmaceuticals in the fields of women and children’s health, coughs and colds and everyday health protection. These brands are available in many countries in Europe, North and South America, Asia and Africa.

3.  Performance Materials

a. The Performance Materials division focuses on innovative products within the consumer electronics, lighting, printing, plastics and cosmetics industries.

4.  Merck Millipore

a. This division, created through the acquisition of Millipore in 2010, today offers solutions for scientists to conduct life science research easily, efficiently and economically.

According to Merck the “basis for [its] entrepreneurial success is the six Merck Values communicated in 2007: courage, achievement, responsibility, respect, integrity and transparency.”

References

•  http://www.merckgroup.com/en/index.html

•  http://www.merckgroup.com/en/company/history/history.html

•  http://www.merckmillipore.co.uk/history/c_1RGsHfET0RoAAAE22lZwtBwZ

Previous ‘A history of…’ articles include:

•  A history of Bayer

•  A history of Novo Nordisk

•  A history of Pfizer

‘A history of Merck &amp, Co’ will be published on the 28th May.

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About the author:

Hannah joined pharmaphorum in early 2012, after graduating with a degree in Magazine Journalism &amp, Feature Writing in 2011, and leads our news coverage, in addition to liaising with new and existing feature authors. With over three years’ experience working within the journalism industry alongside university, Hannah has written for a number of different print and online publications, within the women’s lifestyle, travel and celebrity sectors. Now focussed on the pharma sector with her role at pharmaphorum, Hannah is embracing the challenges of working within a fast growing media organisation in this rapidly changing industry sector.

For any queries or contribution suggestions, please contact her here or via Twitter @Hannah_Blake2.

What do you think the future holds for Merck KGaA?