By Marleen Kaesebier
(Reuters) -German pharmaceuticals and technology company Merck KGaA slightly improved its mid-term guidance for its healthcare business ahead of its capital markets day on Thursday.
Merck now expects mid-term annual organic sales growth in the low- to mid single-digit percentage range for its healthcare business, having guided for “slight growth” last year. It expects mid-to-high single-digit percentage growth for life science, after guiding for 7% to 9% last year.
For the group, Merck is now targeting mid-term annual organic sales growth in the mid single-digit percentage range.
PANDEMIC ASSUMPTIONS FAIL TO MATERIALIZE
The company confirmed that it is aiming to achieve net sales between around 20.5 billion euros to 21.7 billion euros in 2025, a target it has cut twice this year.
This is far below the 25 billion euros the Darmstadt-based firm had previously guided for at its capital markets day in 2021.
“We had made a number of assumptions on the pandemic that never materialized,” Merck’s Chief Executive Belen Garijo said in an interview.
FURTHER M&A PLANS
Garijo, who is stepping down at the end of April, said the company has “appetite for M&A with the priority on life science.”
The company is looking at a broad spectrum of life science companies, both private and public, she added.
Merck is already in the process of acquiring multiple companies, in July announcing its acquisition of U.S. biotech firm SpringWorks in a $3.9 bln deal and on Wednesday announcing that its MilliporeSigma business would acquire the chromatography unit of JSR life sciences.
U.S. TARIFF STRATEGIES
Garijo said Merck has identified several areas for potential collaborations with the U.S. government as tariffs set in.
She named fertility treatments as a potential common interest and also confirmed that the company would likely consider direct distribution to U.S. patients.
(Reporting by Marleen Kaesebier, Patricia Weiss and Matthias Inverardi; editing by Matt Scuffham)
