Recent gradual improvements in the life science and analytical instrument markets continued in the fourth quarter of 2024.
Q4 Market Performance Highlights
After returning to growth in Q3, Waters jumped 8%, with strength across all three reported regions, led by double-digit gains in pharma and a strong year-end budget flush. Instrument sales rose 8%, led by liquid chromatography as deferred customer spending continued to come back, and recurring revenue was up 9%.
Thermo Fisher Scientific’s Analytical Instruments segment and Danaher’s Life Sciences business bumped up 5%, in both cases slightly more than in the previous quarter, while Bruker’s Scientific Instruments (BSI) segment continued steady growth from Q3, again up 3.9%, buoyed by mid-teens growth in the CALID business segment, focused on microbiology.
Agilent continued to climb out of the hole, inching up 1.4% core, with recovery led by LC and LC–MS. Following three quarters of decline, Shimadzu’s Analytical & Measuring Instruments (AIM) division hit positive territory, up 1.2%, as did Illumina, at +0.6%. Merck KGaA’s progress dipped slightly, posting only a 1.6% increase for its Science & Lab Solutions (SLS) division, following the previous quarter’s 4% gain.
Full-Year Performance
Improving Q4 numbers were not enough to bring the full-year revenues up significantly. Sales for Thermo, Waters, Danaher, and Merck KGaA’s SLS division were down slightly for 2024. Shimadzu’s analytical segment and Agilent were both down about 5%, in Agilent’s case for their fiscal year ended October 31. Danaher’s Life Science division and Bruker’s BSI segment were bright spots, growing low single digits.
Pharma and Biopharma Coming Back
The pharmaceutical and biopharmaceutical sector showed resilience despite ongoing layoffs, largely due to the success of GLP-1 drugs. Waters’s Q4 pharma sales grew 10%, reflecting stronger-than-expected year-end spending across geographies. In particular, sales to large pharma, contract manufacturing organizations, and generics customers continued to recover, where the firm’s revenue is tied to high-volume regulated quality control applications. The expanding generic drug market in India is a particular area of focus.
Thermo Fisher rose by mid-single-digits in pharma and biopharma, marking a fourth quarter of sequential improvement for this segment, with large customers showing “a real change in confidence” from GLP-1 drugs. Emerging biotech customers also expressed a brighter outlook, in terms of funding and partnerships prospects for the coming year.
Agilent’s pharmaceutical sales were flat, still hindered by high-single-digit declines in China.
PFAS Growth Continues
Other applied markets showed modest gains. Industrial sales for Waters edged up 2%. Thermo Fisher’s applied market sales grew by high single digits during the quarter and low single digits for the full year, highlighted by strong performance in the electron microscopy business and in the research and safety markets.
Agilent’s food sales saw 9% gains, driven by China stimulus orders, while environmental and forensics were up 6%. Chemicals and advanced materials fell 2%, as growth outside China was offset by high-teens decline in China.
PFAS testing continues to be a growth driver in applied markets. Waters saw PFAS revenue balloon 40% in the quarter. Agilent’s PFAS sales shot up 70%, contributing 75 basis points to overall company growth, and contributing nearly $100 million in sales in 2024. While most PFAS volume lies in environmental testing, Agilent sees “exceptional growth” in food and chemical materials markets, and across all regions, particularly in Europe.
In January, however, the Trump Administration withdrew one important new regulation on PFAS, the US Environmental Protection Agency’s draft rule that would have limited the discharge of PFAS in industrial wastewater.
Solid Q4 for Academia and Government, But Worries Ahead
The academic and government markets offered solid revenues in Q4. Waters’s sales into the academic and government markets increased 16%, driven by leaps of 35% in Asia and 20% in Europe. Thermo Fisher’s sales in the sector gained by high single digits. This segment fell 7% for Agilent but does not represent a large portion of the business.
Companies acknowledged the uncertainty of the academic and government markets for 2025, given enormous federal government and budget cuts under the Trump administration, including to NIH research funding. Agilent’s exposure to NIH funding is about 1% of total revenue. Bruker’s NIH exposure is higher, but still less than 5% of total revenue, and the leadership believes it can offset losses in this sector with gains in microbiology and other applied markets.
Across Geographies, China Still Lags, and Tariffs Loom
Across the sector, revenue from the Americas grew modestly (low- to mid-single digits), while gains in Europe ranged from low-single digits to mid-teens. Asia Pacific grew high single digits for Thermo and Waters and slightly less for Agilent but fell by high single-digits for Bruker. For Agilent, whose quarterly reports run a month later than the industry standard, the Chinese Lunar New Year timing created a $10 million revenue headwind in the quarter, with those sales expected to return next quarter.
Several firms logged modest China stimulus sales. Looking ahead, the sector expects ongoing modest gains from the stimulus spread out over 2025, without a significant overall strengthening of the market. Agilent believes its ability to “produce all products in China for China” provides a competitive advantage.
Bruker notes that 70% of its revenue derives from outside the US, providing geographic diversification. With manufacturing in the US, Europe, and Malaysia, the company is prepared to adjust manufacturing if needed to respond to potential tariffs.
Illumina, which depends on China for 7% of its sales, is seeking a resolution to the company’s ban in China, announced by China’s Ministry of Commerce in early March, in retaliation for Trump-administration tariffs.
Outlook: Early Stages of Recovery
Most firms anticipate a slow start to 2025, with gradual improvements as the year progresses. For the first quarter, Thermo and Bruker expect flat revenue. Agilent anticipates 2.5% to 5% gains, presenting a wider guidance range than usual due to uncertainty around US federal government spending. Waters is more optimistic, anticipating Q1 growth of 4% to 7%.
Thermo Fisher, Bruker, and Agilent all anticipate growth in the low single digits for the full year. Waters expects growth the range of 4.5% to 7.0%, based on steady signs of recovery in analytical instrument spending, particularly in the downstream, high-volume settings the company serves.
Overall, the sector sees “early stages of recovery” in the market and looks forward to a resumption of typical long-term market growth rates of 4% to 6%, once deferred instrument replacement finally kicks into gear.
While companies indicated their 2025 forecasts allow margin for the looming economic uncertainty, these reports were issued before more recent stock market tumbles and other signs of macroeconomic concern related to large Trump administration federal government layoffs and confusion about on-again, off-again tariffs.