Vendors continuing to reap the COVID windfall

Danaher expects COVID-19 vaccine and therapy-related revenue for its bioprocess businesses Pall and Cytiva to reach $2 billion, while the pandemic fuelled “an exceptionally strong start” to Sartorius’s 2021.

In June last year, the evolving coronavirus pandemic was marked out as a $14 billion opportunity for bioprocess vendors by analysts. Ten months on, with several vaccines and therapies being used commercially and several more moving through the clinic, the service firms are experiencing unprecedented demand for their equipment and tools and reaping the rewards.

Danaher Corporation, which owns Pall Corporation and Cytiva, saw a 58% year-on-year growth in revenues for the first quarter to $6.9 billion.

Image: iStock/Yakobchuk

While the firm does not break down its numbers across its subsidiaries, CEO Rainer Blair told investors that “accelerating demand for COVID-related vaccines and therapeutic development and production drove a combined core revenue growth rate of more than 60% at Cytiva and Pall Biotech.”

He added: “We believe that our ability to continue meeting customer’s needs across their bioprocessing workflows enabled us to gain market share in the quarter, particularly within our cell culture media and single-use product line.”

Without the impact of COVID-19 related activity, the bioprocess businesses grew in the low 20% range, he continued, highlighting the high demand in the sector outside of the pandemic.

“There has not been any slowdown in the double-digit growth trend we’ve seen over the last several quarters across non-COVID-related biopharma activity. Within COVID-related biopharma activity, the significant ramp-up of vaccines and therapeutics is driving record bioprocessing demand.

“We’re involved in the majority of COVID-19 vaccine and therapeutic projects underway around the world today, including all of those in the US that are currently on the market or in later-stage clinical trials.”

As such, Blair upped its expectations for 2021 to include an estimated $2 billion of revenue at Cytiva and Pall associated with vaccines and therapeutics, up from the previous expectation of $1.3 billion.

Similarly, Sartorius reported an “exceptionally strong start in fiscal 2021 and grew substantially in order intake, sales revenue, and earnings” with businesses related to the coronavirus pandemic helping to fuel the growth.

“Many of our products play an essential role in helping to overcome the pandemic. In addition to a very positive general business performance in the first quarter, we accordingly experienced strong demand for our products and technologies used in the development and production of vaccines as well as of coronavirus tests and achieved a sharp increase in sales,” CEO Joachim Kreuzburg stated.

As such, the firm’s Bioprocess Solutions business clocked in Q1 sales of €611 million ($737 million), up 55% on the previous year. The ramp-up in coronavirus vaccine production by manufacturers. “contributed a good 23 percentage points to this increase,” management said. Meanwhile the quarter saw an order intake of €953 million – up 88% year-on-year.

Investing in capacity

To support the continued demand for COVID programs and others, both companies spoke about the need to expand capacity and accelerate investment projects.

“In many areas, we are working at the limits of our capacity and are therefore continuing to move ahead with accelerating the expansion of our production facilities and are hiring additional employees,” Kreuzburg said.

Meanwhile, recent investments “of production capacity at Cepheid, Cytiva, Pall Biotech, and Beckman Life Sciences” over the past six months were cited by Danaher’s Blair.

“Near term, these investments will support COVID-related demand, but they’re equally important to support the long-term growth of these businesses, where we see tremendous runway ahead given the underlying growth drivers and the durability of the markets they serve.

“Between these four businesses, we’re investing more than $1 billion in 2021 to continue to meet our customer’s needs today and well into the future.”