Life sciences ‘continues to rip’ for Germany’s Merck

With a 14.8% year-on-year growth in its Process Solutions business, Merck KGaA has reported another strong year for its life sciences division.

For the full year 2018, Germany’s Merck KGaA reported net sales of €14.8 billion ($16.6 billion) across all its divisions, a growth of 2.2% year-on-year. Its life sciences business pulled in €6.2 billion ($7 billion), up 5.2% on 2017 with a large contribution from its Process Solution business – which includes its MilliporeSigma unit – of €2.5 billion, representing organic sales growth of 14.8%.

According to Evercore ISI analyst Luke Sergott, not much changed in terms of business trends and market dynamics, and “life sciences continues to rip,” he wrote in a note.

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The double-digit growth in bioprocessing is in line with the other vendors. GE Healthcare, Thermo Fisher, Pall and Sartorius all reported high annual growth over the past 12 months.

Merck said in its annual report that the demand for Process Solutions products is dependent on the sales of biologics, as well as on the productivity of biopharma’s R&D activities. The market volume of biopharmaceuticals grew in 2018 to €249 billion – equivalent to 27.9% of the global pharmaceutical market – the firm said, citing IQVIA’s ‘Market Prognosis 2018 – 2022’ report, and so with 7,800 biotechnological drug candidates were in preclinical to phase II, the division is not likely to slow down.

“Process Solutions is likely to remain the strongest growth driver,” Merck said.

The firm also noted that the division benefitted from $280 million of cost and sales synergies from the acquisition of Sigma-Aldrich that were realized in 2018, as planned. The firm paid $17 billion for Sigma-Aldrich in 2015, augmenting its life science offering. No incremental synergies are expected for 2019.

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