Germany's Merck says gene editing to help it outperform

Germany's Merck KGaA, the world's second-largest supplier of materials and equipment to the biotech sector, expects to continue delivering market-beating sales growth, helped in part by new gene modification techniques.

Merck's Life Science business, which supplies everything from ultra-pure lab water to cell lines and bioreactors that produce pharmaceutical proteins, grew currency-adjusted sales 6.5 percent last year, above the overall market's 4-5 percent.

Momentum will continue as Merck adds recently-acquired lab supplier Sigma-Aldrich to its existing Millipore business in an enlarged Life Sciences division, Udit Batra, the head of the division and group executive board member, told Reuters.

"The ambition is definitely to grow faster than the market and there's no reason why we wouldn't," said Batra, who oversees about 5.4 billion euros ($6.1 billion) in annual sales, more than a third of the chemicals and drugs group's total of 15 billion, when including Sigma-Aldrich.

The first quarter went well, though detailed results will be published on May 19, he said.

New gene editing techniques such as CRISPR-Cas - based on some bacteria's immune response to virus attacks - are offering more precise and cheaper ways of manipulating the DNA of humans, animals and plants.

That has spurred alliances and financing deals in the pharma industry and is also opening up new business opportunities for Merck.

"What is truly exciting for me is gene editing and we are one of the leaders in this field," said Batra, a chemical engineer by training, who previously reorganized Merck's consumer care unit and worked for Novartis's vaccines and diagnostics arm.

Mending genetic faults in organs or human tissue, so-called gene therapy, has suffered setbacks, but holds the promise of healing previously untreatable diseases without further use of drugs.

Previous failures, and the fact new approaches in medicine tend to first be targeted at rare diseases, have kept gene manipulation in medicine a small market so far.

"There were some early trials in gene therapy that failed so people became very cautious. Now the technology is much more precise and the industry and the research have developed," said Batra.

"This used to require really expensive and specialized resources. Now it's much less expensive with CRISPR. It's a technique that has really democratized gene editing in the lab, so you can study the source of diseases."

Merck's Life Science unit, which competes with larger Thermo Fisher, can benefit in several ways, mainly in the field of research and development of new drugs and plants.

For example, it can edit genes for smaller biotech startups and labs, sell do-it-yourself kits for more advanced users as well as whole libraries that chart all possible modifications along the DNA strand.

(Editing by Arno Schuetze and Mark Potter)