Despite revenue growing 61 per cent to €1.7bn, mainly thanks to the company's purchase of Serono, the company has conducted a business review and decided diabetes R&D is not for them.
Cuts are relatively common across the industry at the moment as bigger firms struggle to plug pipeline gaps created by loss of patents on key drugs coupled with a dearth of internally discovered drugs.
Merck Serono has decided to focus its R&D on specific therapeutic areas, namely oncology, neurodegenerative diseases, autoimmune and inflammatory diseases, fertility and, in development, on certain areas within endocrinology.
"As a consequence, Merck is considering not investing further into diabetes research and development but is investigating partnerships for its existing diabetes R&D projects," the company said in a statement.
Whether or not this will include Glucophage (metformin), the firm's marketed Type II diabetes treatment is unclear.
Currently, more than six million patients are prescribed a product from this drug franchise.
The company also has at least two other diabetes drug in its pipeline.
The first is EMD387008, which is in Phase II trials in patients with Type II diabetes and the second is an unnamed Dipeptidyl Peptidase IV ( DPP IV) inhibitor, which is also in Phase II clinical trials.
Elmar Schnee, the board member with responsibility for the pharmaceuticals business sector added that he sees Merck as a company which should develop drugs in specialist indication.
"The goals of our review were to create as much value as possible from our current compounds by better managing risk across the portfolio and directing resources to our most promising projects," he added.