Merz Group experiences successful 2006/07 financial year

Merz GmbHMerz GmbH & Co. KGaA, based in Frankfurt am Main, was able to continue the dynamic growth of the previous years during their 2006/07 financial year (ending June 30th). Group revenue increased by 12.8% to 535.5 million Euros (previous year: 474.6 million Euros) due to new product introductions and internationally successful marketing and sales measures. Results prior to taxes were disproportionately high, increasing by 17.9% to 115.4 million Euros (previous year: 97.8 million Euros).

"The growth of the Merz Group can be attributed to the qualification and focus of our research, marketing, and sales work," says Dr. Jochen Hückmann, Chairman of the Shareholders' Council. Merz achieved the largest share of its Group revenue within the Pharmaceuticals segment (Merz Pharmaceuticals GmbH/Merz Dental), amounting to 67.1%. Earnings could be increased by 17.6% for a sum of 359.4 million Euros. The Consumer Products segment (Merz Consumer Care GmbH) contributed to 20.7% of sales revenues and increased sales by 7% for a total of 110.9 million Euros. 12.2% of Group sales were contributed by the Writing Instruments/Promotional Materials segment (Senator GmbH & Co. KGaA), meaning that revenues were comparable to those of the previous year.

Core pharmaceuticals business grows
The main flagships for revenue and growth are products within the strategic core category of the central nervous system (cns). The active ingredient Memantine, which is used for the treatment of moderate to severe Alzheimer’s dementia and whose growth has remained stable over the past several years, surpassed the one-billion us dollar mark for sales for the first time – earlier than expected. Memantine is sold in conjunction with license partners Forest Laboratories and Lundbeck. An entrance onto the market within the area of neuromuscular illness was successful as well. The preparation Xeomin, designed by Merz for the treatment of neurological movement disorders,1 received positive decision through the European Commission for 13 countries, as well as approval in Mexico and Argentina. Merz continues to ambitiously pursue a position as leading expert for non-operative aesthetic medicine; this occurred during the reporting year through targeted acquisitions of preparations and success in new product approvals.

Determined expansion of the research and product pipeline
The Merz Group increased their Group research and development expenditure by 18.9% during the financial year, amounting to 60.1 million Euros (previous year: 50.6 million Euros); a considerable increase from the previous year. In doing this, they created job positions for 70 further research associates. The background for this decision is an increase in phase-III and phase-IV projects and intensified pre-clinical activities. Further important success was obtained by positive study results for the treatment of arm spasticity following a stroke and of tinnitus.

Growth through internationalization
Successful activities abroad form an important pillar of Merz' corporate success, which now amount to approximately 65% of the Group's revenue. The pushed establishment of its own country-based locations was continued with the foundation of new subsidiaries in France, Spain, and Russia.

1) approved for the indication cervical dystonia of a predominantly rotational form (wryneck) and blepharospasm (dystonia of the eyelid).

Consumer Products successful
Despite intense competition, Merz Consumer Products under the brand names tetesept and Merz Spezial were able to increase their sales by 7%. They could claim a leading position as the 2nd-largest brand name on the market for medications sold outside of the pharmacy. They were able to maintain their first place position on the mass market for medicinal baths and bath additives; their market leadership for cold remedies sold outside of the pharmacy was significantly expanded.

Senator takes its place on the international promotional materials market
Senator, one of the leading manufacturers of writing instruments on the worldwide promotional materials market, was able to sustain its position through innovative product and service concepts, the highest of quality standards, and the most modern of production facilities despite growing international competition.

Through an acquisition made in November 2007, Senator purchased the US-company Dart Manufacturing Co. (Dallas), an established manufacturer of promotional materials for all aspects of the office. With the acquisition and the current range of writing instruments Senator, will be able to expand its position in the USA even further.

Profitable and sustainable growth
The Merz Group is striving to increase its sales and results in all of its divisions and subsidiaries during the current financial year. In addition, the resources allocated to pharmaceutical research will be amplified considerably.

About Merz
Merz specializes in drugs for the treatment of neurological and psychiatric illnesses and is a leader in the field of Alzheimer's research. Merz developed Memantine, the world's first drug for the treatment of moderate to severe stages of Alzheimer's disease. Among drugs to combat Alzheimer's, Memantine ist he second most-often sold in the world. Another area of competence at Merz is clinical and cosmetic dermatology. Along with the pharmaceuticals market, Merz is active in the healthcare sector outside of the pharmacy as well. With its brand names tetesept® and Merz Spezial®, Merz Consumer Care is a leading provider of products for self-medication, dietary supplements and skin care in German-speaking countries. A Merz subsidiary, Senator GmbH & Co. KGaA is one of the leading manufacturers of high-quality promotional writing instruments worldwide. The Merz Group employs 2,050 employees worldwide (previous year: 1,915 employees). The company achieved revenues of approximately € 535 million in the 2006/07 financial year (previous year: approximately € 474 million). For more information visit www.merz.com.

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