Profitable Growth as of 2019

Mer­ck expects strong growth impe­tus start­ing next year, as the com­pa­ny report­ed today 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.