Merck Aims to Return to Profitable Growth as of 2019

Performance Materials realigns R&D

16-Oct-2018 - Germany

Merck expects strong growth impetus starting next year, as the company reported to analysts and investors at its Capital Markets Day. “2018 has been a challenging year for Merck. We have made future-oriented decisions that will lead to profitable growth as of next year,” said Stefan Oschmann, Chairman of the Executive Board and CEO of Merck.

Healthcare expects pipeline-driven earnings growth

In the Healthcare business sector, the core business (excluding Consumer Health), has achieved an annual growth rate of around 3% since 2013. On October 12, Merck announced positive results from its Phase II study with evobrutinib in relapsing multiple sclerosis (MS). In September, Merck and Pfizer announced that in a Phase III study, Bavencio (avelumab) plus Inlyta (axitinib) showed a significant improvement in progression-free survival in non-pretreated patients with advanced renal cell carcinoma. In addition, seven further Phase III studies are underway with avelumab. On July 30, Merck announced that the U.S. Food and Drug Administration (FDA) had accepted for filing the application for regulatory review of cladribine tablets as a potential treatment for patients with relapsing forms of MS.

Life Science growing faster than the market

In the midst of the Sigma-Aldrich integration over the past three years, the Life Science business sector has grown faster than the market while expanding its position as the most profitable supplier in the life science industry. Whereas the life science market grew annually by an average of 4%, from 2015 to 2017 the Life Science business sector grew by an average of around 6%. In order to maintain this dynamic growth, Life Science intends to rigorously focus on growing its pipeline of innovations and launching new products.

Performance Materials realigns R&D

As announced on July 3, the Performance Materials business sector aims to further expand its position as a leading supplier of solutions for the electronics industry. For the years after 2019, it expects to resume average annual sales growth of 2% to 3%. One pillar of the transformation program is the realignment of research and development (R&D). To this end, the business sector will target its resources more strongly to existing end-customer needs. Moreover, decisions relating to the assessment of projects and allocation of resources will be made centrally and the business sector will push forward with integrated and cross-disciplinary R&D.

Merck confirms outlook for 2018 and growth prospects for 2019

Merck confirmed its expectations for full-year business performance in 2018 as recently communicated in the announcement of half-year results on August 9 as well as the expectation that it will return to sustainable growth in 2019 with respect to the key figures, in other words net sales, EBITDA pre and EPS pre.

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