Merck KGaA reported a 16% year-on-year growth for its MilliporeSigma Process Solutions business and expects continued strong demand from biomanufacturers to drive high single-digits in the long-term.
“Thank you sir, can we have another (Q like this one),” Evercore ISI analyst Luke Sergott wrote in an note describing German Merck’s third quarter 2018. While group sales grew 6.6% year-on-year to €3.7 billion ($4.2 billion), it was the life sciences MilliporeSigma division which really shone.
The Process Solutions business unit grew 16.3% organically to €619 million, attributed by the firm to sustained strong demand from biopharmaceutical manufacturing.
“We’re seeing some terrific momentum in the short-term,” said Udit Batra, CEO of Life Science on a call discussing the results. “This is largely driven by two factors: One, we have a portfolio that is advantageous, really weighed towards bioprocessing where we are a leader; [and two] we also see our Applied portfolio with recent launches in innovation really kicking in.”
The robust third quarter was helped by a low base in Q3 2017, but looking at the mid to long-term perspective, Batra said he expects high single-digit.
MilliporeSigma’s results fall in line with some of the other bioprocessing vendors’ Q3s. Pall and Sartorius both reported robust quarters, while Thermo Fisher’s services business grew 28% year-on-year thanks to the addition of CDMO Patheon.
Filtration and single-use
Adding more detail, Batra told stakeholders the growth is coming from a mix of hardware replacements, consumables sales coming through, and sales in downstream processing.
“The single-use in hardware business is growing close to 30% and the downstream processing, which is our classical consumables business – especially in filtration – is even in excess of that”
He added the firm continues to introduce new single-use products and alluded to the recently launched Pellicon Single-Pass Tangential Flow Filtration (TFF).
“In the past 15 to 20 years, we really led [the tangential filtration] market. We’ve reexamined it and we introduced a disposable capsule instead of cassettes, which are open.”
He continued: “For now, I would say all three drivers are relevant. The portfolio breadth, the fact that we have innovation across this portfolio breadth, the global presence and the end-to-end contract manufacturing piece as well.”