MERCK KGAA The Sigma-Aldrich deal, which got regulatory approval this week, will make Merck's Life Science business the world's second-largest supplier of biotech labs and drug companies after Thermo Fisher.
As a supplier of substances and devices to the drug industry, Merck is benefiting from a long-term shift from chemical to more complex biological drugs, which require a far wider range of inputs in production.
The third quarter stood out as extremely strong at Life Science, driven by customers in the biopharmaceutical industry, finance chief Marcus Kuhnert told reporters.
Merck now sees adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of 3.58-3.65 billion euros ($3.84-$3.92 billion), where it had previously expected 3.45-3.55 billion.
In the third quarter, adjusted EBITDA rose 10 percent to 944 million euros, beating the 882 million expected on average by analysts in a Reuters poll.
Merck's decision to halt tests on unsuccessful cancer vaccine Stimuvax and another drug, for which Merck had set aside money, turned out to be less expensive that anticipated, accounting for most of the surprise element in the earnings.
Sales at Merck's existing lab supplies business gained a currency-adjusted 8.1 percent in the quarter, boosted by demand for products to handle viruses and to purify therapeutic proteins, among others.
"Overall, solid numbers and good margins," UBS analyst David Evans wrote, describing growth at the Life Science business as particularly impressive.
Merck's shares rose 2.8 percent to a three-month high by 1051 GMT, among the top gainers on Germany's blue-chip index.
(Reporting by Ludwig Burger; editing by Tom Pfeiffer and Jane Merriman)
By Ludwig Burger
