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This issue of Vital Signs, released on October 3, 2014, discusses Merck KGaA's acquisition of Sigma-Aldrich, highlights from the 2014 AACC Meeting, Abbott's CE Mark for FreeStyle® Libre, laboratory developed test (LDT) regulations, and the sale of Fortis Healthcare's Singapore subsidiary, RadLink-Asia Pte Ltd, and its arm, RadLink Singapore.

Merck KGaA to Acquire Sigma-Aldrich in Biggest Life Science Tools Acquisition to Date
Source: Merck KGaA, September 22, 2014
Merck KGaA, a public company based in Darmstadt, Germany, announced it will acquire St.Louis, Mo.-based Sigma-Aldrich for $17 billion. This is the largest acqusition in the life science tools space, surpassing the $13.6 billion acquisition of Life Technologies by Thermo Fisher Scientific officially completed in February 2014. Merck KGaA’s potfolio of products includes biopharmaceuticals, consumer over-the-counter pharmaceuticals, high-tech chemicals, and life science tools. Merck originally expanded its life science tools division through its acquisition of Billerica, Mass.-based Millipore in 2010.

The Analyst’s Perspective by Christi Bird, Senior Industry Analyst, Life Sciences, North America
The acquisition creates a powerhouse chemicals, reagents, life science kits, and labware supplier, combining Merck’s EMD Millipore $3.3 billion arm and Sigma-Aldrich’s $2.7 billion global presence. Merck stated its intentions to “maintain significant presence” in St. Louis and Billerica, yet some employee synergy is likely to occur as integration begins. These companies have similar customer bases, targeting academic and governmentbased research laboratories, pharmaceutical and biotechnology R&D/production/manufacturing, industrial manufacturing, chemical, environmental testing, and other applied industries. Once sales synergies occur, selling into the same organizations should help augment brand recognition and customer capture for both companies; this is particularly true for EMD Millipore, which will benefit from Sigma-Aldrich’s truly global reach (including a strong position in fast-growing Asia), well-established brand recognition, and leading eCommerce platform. Meanwhile, Sigma-Aldrich will benefit from Merck’s positioning in the pharmaceutical industry.

Should a collaborative spirit build between Sigma-Aldrich’s product development and Merck’s pharmaceutical business, Sigma is poised to deliver highly optimized product offerings from the entire upstream R&D to downstream bio-production processes of drug development. However, perhaps the most disruptive impact to the industry is the ability of the combined companies to emerge as a third major distribution company able to compete with Thermo Fisher Scientific and VWR. Until now, no company had the infrastructure, global reach, supply chain, and product portfolio to compete with these two behemoth distributors of laboratory products. While Merck will have to beef up its portfolio of instruments and equipment to truly provide end-to-end life sciences solutions, it could easily be achieved through the brand distributor or OEM model. If you’re Thermo or VWR, you’re keeping a close eye on Merck’s next moves. A third major distributor of laboratory products could mean even greater competition, leading to greater customer bargaining power and lower prices in what has long been an industry of market share tug-of-war between Thermo and VWR. Back in 2010, when Merck acquired Millipore, Merck actually outbid Thermo Fisher Scientific for the company. Should Merck make a play at the distributor model, this ascending powerhouse will take another jab at the $17 billion Thermo. Time will tell if this acquisition will serve beneficial to all parties involved (and subsequently detrimental to competitors) or if integration issues and internal power struggles thwart its potential.

Table Of Contents

Vital Signs - Healthcare News - The Analyst's Perspective - September 2014 Issue
LIFE SCIENCES
Merck KGaA to Acquire Sigma-Aldrich in Biggest Life Science Tools Acquisition to Date.. 2
2014 AACC Annual Meeting - Immunochemistry and Clinical Chemistry Markets
Experience Stiff Competition. 3
Abbott Receives CE Mark for FreeStyle® Libre, a Revolutionary Glucose Monitoring
System for Diabetics .. 4
FDA Working on LDT Guideline: What it is and the Implication of it . 5
Fortis Sells Singapore Subsidiary RadLink-Asia for ?655 Crore. 6

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