Businessmodel of Merz

Customer Segments

Merz produces products that are meant for the general consumer. However, these products are not always sold to the retail consumer – some of them require experts, often physicians, to apply them. One example is the Botox injection product for skin wrinkles – these have to be applied by a qualified physician as they can be highly dangerous if injected into the wrong area or into the bloodstream.

• Aesthetics – Merz has five major aesthetics brands – Merz Aesthetics (various products), Belotero (dermal fillers made of hyaluronic acid), NEOCUTIS (topical cosmetics), Radiesse (dermal fillers), and Ultherapy (ultrasound skin therapy). Of the five, none are sold over the counter – even NEOCUTIS, which manufactures topical cosmetics, requires dispensation from physicians.
• Dermatology – Merz has three major dermatological brands – Contractubex (scar treatment), Mederma (scar treatment), and Pantogar (hair loss). All three are available for sale to the general public, with or without a prescription.
• Consumer Care – Merz has two major consumer care brands – Merz Spezial (oral and topical skin and hair products) and tetesept (general pharmaceutical products – certain European countries only). Both sell products to the general public.
• Others – Aside from the above mentioned products, Merz also has products and research targeted at liver disease (Hepa-Merz) and Alzheimer’s (no brand). Neither sells products to the general public. ### Value Proposition

Merz is a well-known and old company with a history of making effective products. This adds to its attractiveness to consumers. Further, it produces certain treatments that are unique to it.

For example, it is one of the world’s leading producers of botulinum toxin-based products, including Botox injections.

Channels

As the bulk of its products are available only through physicians and medical institutions, Merz sells directly to these. It also sells to distributors, who in turn sell to pharmacies, or to major pharmacy brands.

Customer Relationships

Merz creates customer relationships through the use of marketing, either directly (through campaigns and personal professional representatives) or through partnerships, either internal (i.e. intra-group partnerships/agreements) or external.

An example of an intra-group partnership is Merz Pharma Canada’s exclusive distribution agreement with Ulthera, a subsidiary of Merz Group, to distribute Ulthera’s products throughout Canada. An example of an external partnership is Merz North America’s exclusive distribution agreement with Tanner Pharma Group granting Tanner the exclusive right to distribute Cuvposa, a Merz product, in Latin America.

Key Activities

Merz is involved in the research, development, production, distribution, and sale of medical products, primarily cosmetic products and treatment options, to licensed physicians.

Key Partners

Aside from research and production partners, Merz also distributes its products through partners. Examples are covered in the “Customer Relationships” section above.

Merz also puts in venture capital into companies and/or other investments that it finds that will provide research, production, distribution or other forms of benefits – these venture strategies can take the form of joint ventures formed with some of Merz’s partners.

Key Resources

While hard data is unavailable, it is likely that Merz’s key resources are similar to other global pharmaceutical companies - key resources are its Property, Plant and Equipment, its Goodwill, and its intellectual properties (i.e. patents for drugs and other pharmaceuticals) and other intangible goods.

Cost Structure

While hard data is unavailable, it is likely that Merz’s key resources are similar to other global pharmaceutical companies - key costs are in: Materials and production, marketing and administration, and research and development.

Revenue Streams

Merz splits its revenue streams by region and not by business segment. The highest performing region by sales is North America, followed by Europe. The fastest growing region is the Asia-Pacific region, where Merz is only just expanding.

Source of Revenue Revenue (FY 2015, million EUR) % of Total Revenue Revenues 1,157.0 100% EMEA 422.6 37% North America 588.4 51% Latin America 48.4 4% APAC 97.6 8%