After another record quarter, Germany’s Merck expects a COVID-19 windfall of €1 billion in 2021, the bulk of which coming from its Process Solutions unit.
The German biopharma giant reported double-digit growth across all its segments in the second quarter 2021, but highlighted significant contributions from its ‘Big 3’: its Healthcare pipeline, Process Solutions, and Semiconductor Solutions units.
The Process Solutions business, which falls under its Life Science business MilliporeSigma and offers biopharmaceutical products and services, pulled in €1.15 billion ($1.34 billion) of sales, representing an organic growth of 33.8% year-on-year.
Merck CEO Belen Garijo told stakeholders that while Life Science is “the star performer,” the Process Solutions unit continues to be “the main growth engine” due to “rising comps…continued sequential uptake in…and the successful ramp up of digital capacities. Furthermore, order intake remained very robust with growth of over 60% again.”
COVID bonus and expansions
The full Life Science business clocked sales of €2.23 billion, up 28% year-on-year.
According to the firm, the core business grew around 15% while COVID-related sales contributed the remaining 13% to growth.
“We are providing critical products and services urgently needed for the development and manufacturing of COVID-19 vaccines, therapies and diagnostics. On the other side, the pandemic has ramifications for our business that go above and beyond Life Science,” said Garijo.
She added the overall situation remains dynamic and thus forecasting is a challenge, but the firm now expects at least €1 billion of COVID-related sales in 2021 within Life Science, with at least €900 million of this coming from Process Solutions. Furthermore, Merck expects at least €700 million in COVID-related sales for 2022.
To support both the COVID tailwind and continued growth, Garijo highlighted the firm’s capacity growth and M&A strategies.
“We see our strategy is going to keep a balance between driving organic growth and…integrate smaller acquisitions that can help strengthen our portfolio, offer longer term and to continuously boost our competitiveness.
“When it comes to capital allocation, I can tell you, that our top priority is investing CapEx on building capacity for Life Science and Electronics to actually drive growth and get the benefit of the organic potential that we see in our portfolio.”
Recently, the firm has credited COVID-19 to expediting product launches, a $30 million single-use facility expansion in France, $47 million in US capacity expansions, and bolt-on acquisitions, such as CDMO AmpTec in January.