Merck Delivers Resilient Growth Across All Divisions in Q1 2025, Advances Strategic Expansion with SpringWorks Acquisition
Merck, the global science and technology powerhouse, began 2025 on strong footing, demonstrating solid financial and operational performance in the face of ongoing macroeconomic challenges and geopolitical uncertainty. In the first quarter of the year, the company delivered organic growth across all three of its core business sectors—Life Science, Healthcare, and Electronics—highlighting the strength of its diversified portfolio, the success of its efficiency measures, and its continued focus on innovation.
Driven by an encouraging recovery in Life Science, robust performance in select franchises within Healthcare, and ongoing strength in Electronics—particularly in semiconductor materials—Merck increased its group net sales to €5.3 billion, a 2.5% organic rise compared with the same quarter last year. The company also posted a notable 5.8% organic year-on-year increase in EBITDA pre, reaching €1.5 billion, with an improved margin of 29.1% (up 0.7 percentage points from Q1 2024). Pre-earnings per share (EPS) rose modestly to €2.12 from €2.06.
CEO Highlights Resilient Strategy and Innovation
Commenting on the quarter’s performance, Merck Chair of the Executive Board and CEO Belén Garijo emphasized the resilience of the company’s innovation-led growth model and region-focused operational strategy. “Our solid first-quarter results underscore the resilience of our dynamic, innovation-driven business and our region-for-region approach,” said Garijo. “Process Solutions has performed strongly, accelerating growth for Life Science. We continue to resolutely execute our strategy, driving efficient and profitable growth.”
Despite macroeconomic volatility, including foreign exchange headwinds and global trade uncertainties, Merck reaffirmed its long-term vision. Garijo also pointed to Merck’s latest strategic move—the acquisition of SpringWorks Therapeutics—as a significant step toward sharpening the company’s focus in rare disease and oncology, while reinforcing its presence in the U.S. market.
Strategic Expansion: Merck to Acquire SpringWorks Therapeutics
On April 28, 2025, Merck announced it had entered into a definitive agreement to acquire SpringWorks Therapeutics, Inc., a U.S.-based commercial-stage biopharmaceutical company specializing in the development of therapies for severe rare diseases and oncology. Under the agreement, Merck will acquire SpringWorks at a purchase price of $47 per share in cash, valuing the transaction at approximately $3.9 billion in equity, with an enterprise value of $3.4 billion (€3.0 billion).
The acquisition is expected to strengthen Merck’s capabilities in rare tumors, expand its oncology pipeline, and bolster its commercial footprint in the United States—the world’s largest pharmaceutical market. The transaction is anticipated to close in the second half of 2025, pending customary regulatory approvals.
This move aligns closely with Merck’s broader growth strategy in its Healthcare division, where the company is actively targeting areas with high unmet medical need, including oncology, neurology, and immunology.
Business Sector Performance: Life Science Accelerates on Process Solutions Momentum
The Life Science division, Merck’s largest business sector, emerged as a key growth engine during the first quarter of 2025. Net sales in Life Science rose to €2.2 billion, reflecting organic growth of 2.5%, while EBITDA pre increased organically by 3.1% to €622 million. These results were primarily driven by the strong resurgence of demand in Process Solutions—the unit responsible for providing essential tools and materials across the pharmaceutical manufacturing value chain.
Within Process Solutions, organic sales surged by 11.4% to €919 million, demonstrating the rebound in biopharmaceutical production activities. This uptick signals renewed momentum in downstream biologics manufacturing after a period of market stagnation.
However, not all units within Life Science experienced growth. The Science & Lab Solutions segment recorded net sales of €1.1 billion, down organically by 2.5% compared to the prior year. This decline was attributed to continued uncertainties surrounding the funding of scientific research, as well as constrained spending from pharmaceutical R&D budgets.
The Life Science Services unit, which offers contract development and manufacturing services (CDMO) and product testing, posted net sales of €151 million, marking a 6.2% organic decrease. The sector continues to face headwinds due to reduced demand in early-stage biotech development. Nevertheless, pockets of strength were observed in antibody-drug conjugates and small molecule contract services.
Healthcare: Cardiometabolic Portfolio Powers Growth
Merck’s Healthcare segment continued to demonstrate resilience, with net sales climbing 3.4% organically to €2.1 billion and EBITDA pre rising 11.7% to €796 million. A key contributor to this performance was the temporary reduction in R&D expenses, reflecting Merck’s broader cost discipline initiatives.
The Cardiovascular, Metabolism, and Endocrinology (CM&E) franchise stood out as the primary driver of growth within Healthcare. This business area reported organic sales growth of 10.6%, with total net sales reaching €757 million. The growth was broad-based across all therapeutic subcategories, highlighting strong market demand and effective commercial execution.
In contrast, the Oncology franchise saw a modest decline, with organic net sales slipping 1.9% to €491 million. Within this segment, Erbitux, Merck’s blockbuster therapy for metastatic colorectal cancer and head and neck cancers, achieved a 6.2% organic growth to €305 million. This growth was bolstered by increased adoption in China, offsetting broader market challenges. However, Bavencio, the company’s immunotherapy for urothelial carcinoma (a type of bladder cancer), saw sales fall by 15.4% to €157 million, largely due to intensified competitive pressures.
The Neurology & Immunology (N&I) franchise posted organic net sales of €407 million, down 3.7% year-over-year. Mavenclad, an oral treatment for relapsing multiple sclerosis, continued to perform well with 9.2% organic growth to €287 million, driven by strong demand in both Europe and North America. Rebif, an interferon therapy for multiple sclerosis, declined by 25.1% organically to €120 million, reflecting the ongoing contraction of the interferon-based treatment market.
Merck’s Fertility franchise maintained stable performance, posting net sales of €382 million, just 0.4% lower on an organic basis. The company successfully navigated headwinds related to prior-year competitor supply shortages that had temporarily inflated market share.
Electronics: Semiconductor Momentum Continues
The Electronics business sector achieved steady growth during Q1 2025, with net sales rising to €948 million and EBITDA pre increasing 2.0% to €244 million. Organic sales growth stood at 0.6%, underscoring the segment’s resilience amid a demanding market environment.
Semiconductor Solutions—the largest sub-segment within Electronics—was the primary growth contributor, posting organic sales growth of 2.0% to €649 million. The continued rise in demand for high-value semiconductor materials, particularly those used in advanced nodes and AI-enabling technologies, sustained Merck’s growth trajectory in this critical area.
Optronics, which provides optical technologies for the electronics industry, saw sales grow to €198 million. While the organic performance remained flat, the acquisition of Unity-SC, a French-based metrology company fully integrated into Merck in late 2024, contributed a 4.3% portfolio uplift.
Meanwhile, Surface Solutions experienced a contraction in demand, with net sales falling to €101 million (organically down 6.9%). Weak demand in the cosmetics industry weighed on the business. Merck had previously announced plans to divest this unit, with the transaction expected to close in the second half of 2025.
Merck Adjusts Guidance but Remains Optimistic
In light of prevailing global headwinds—including currency volatility, inflationary pressures, and geopolitical tension—Merck has made slight adjustments to its full-year guidance for 2025. The company now expects full-year net sales to range between €20.9 billion and €22.4 billion, and EBITDA pre to fall within the €5.8 billion to €6.4 billion range. This translates to an expected organic net sales growth of 2% to 6%, and organic EBITDA pre growth of 2% to 7%.
Management cited several reasons for the updated outlook, including potential foreign exchange headwinds, the uncertain impact of global tariff changes, and reduced visibility in biotech funding. Nevertheless, Merck remains confident that it is well-positioned to deliver sustainable growth through 2025 and beyond.
With a broad pipeline of innovative therapies, a growing presence in advanced manufacturing technologies, and a strategic emphasis on geographic diversification, Merck continues to pursue its vision of being a global leader at the intersection of science, technology, and healthcare.
As CEO Garijo concluded, “As we navigate the complexities of today’s world, we remain committed to reinforcing our position as a globally diversified pioneer in science and technology.”
