Research and Development

We conduct research and development (R&D) worldwide to develop new products and services to improve the quality of life of patients and meet the needs of our customers. Further optimizing the relevance and efficiency of our research and development activities – either on our own or in collaboration with third parties – is one of our top priorities. In addition, we are continuously improving the fulfilment of our sustainability criteria and integrating them into our R&D processes starting with our product development stage. In 2023, we evaluated almost all relevant R&D projects, thereby increasing transparency regarding the sustainability performance of our global R&D portfolio.

Around 6,500 employees (2022: approximately 7,300) worked in R&D and related support functions in 2023. They dealt with innovations to address long-term health and technology trends in both established and growth markets.

Expenditure for R&D amounted to € 2.4 billion in 2023 (2022: € 2.5 billion).

The organizational setup of our R&D activities reflects our structure with three business sectors. In the Life Science business sector, our research activities focus on developing innovative technologies for laboratory and life science applications in government and academic labs, the biopharmaceutical industry, and the industrial sector. Our Life Science Technology Office, established in 2022, continues to drive long-term innovation and ensures that R&D investments are aligned with our growth strategy. Our goal is to accelerate and impact scientific discovery across our Life Science business units and the Group as a whole. We focus on digital and automated labware, the factory of the future and novel modalities as well as providing more sustainable products for the lab. In addition, our teams remain dedicated to delivering advancements in our core portfolios, such as filtration, pure water for use in laboratories and diagnostic solutions.

With our Healthcare business sector’s R&D pipeline, we aspire to make a positive difference for patients. Our main research areas include oncology and immunology, including multiple sclerosis. The main focus of our Electronics business sector’s research is on developing innovative materials and technologies required for the manufacture of ever smaller, faster, more powerful, and more sustainable processors and memory chips. Furthermore, Electronics develops novel materials for next-generation displays and functional and decorative effect pigments for use in the automotive and cosmetics industries and other industrial applications.

We are firmly convinced that science should not be conducted in silos. We believe that a modern, multidisciplinary approach to science will power the next wave of human progress. We call this approach “bioconvergence” because it leverages synergies across digital and material science as well as biotechnology. Success depends on the ability to combine a broad mix of competencies and technologies across several disciplines to create novel market solutions. We are a diversified science and technology company with leading positions across the life science, healthcare and electronics industries. Our goal is to harness synergies not only within our business sectors, but across them.

Examples of opportunities we are developing at the intersection of our business sectors and converging technologies include:

• Continuing to build our automated design-make-test-analyze platform powered by state-of-the-art artificial intelligence (AI) and lab automation. This will accelerate the discovery of new and better drug candidates and in turn expedite timelines for new therapies to reach patients.
• Using our capabilities across the Group in messenger ribonucleic acid (mRNA) synthesis, lipid nanoparticle (LNP) synthesis and formulation and targeted delivery as well as AI to enable the development of “smarter” LNPs that can more effectively target different tissue types including hard-to-reach biological targets in various disease areas.
• Developing digital twins in smart manufacturing. As virtual models designed to accurately replicate a physical object or organism, they can help to improve the time, cost, quality, and sustainability of manufacturing, process optimization and product development. Examples include making pharma supply chains more traceable and trustworthy. We developed a model for primary packaging in the pharmaceutical industry, and in cooperation with a partner provided proof-of-concept.
• Advanced microphysiological systems based on human cell culture models promise to deliver faster and more accurate drug testing results compared with today’s two-dimensional approaches and might reduce animal testing. We are currently looking into this next generation of organoids based on chip technology, bringing our Life Science, Healthcare and Electronics colleagues together to work on this area of innovation.

In our R&D, AI and machine learning have demonstrated their ability to predict the properties of new materials. However, our applications of AI and machine learning go beyond just internal use. One example of AI and machine learning being commercialized is the progress made on AIDDISON™. This AI-powered drug discovery software uses generative AI based on two decades of historic data. The software, which had been in development since 2020, was launched by Life Science in 2023. In addition to external commercialization, we also use it in our Healthcare business sector for internal early drug discovery.

High-quality, interoperable data combined with analytics and AI offer unprecedented potential for new digital business models adjacent to our current product offering and unlock additional growth opportunities. Examples include Syntropy and Athinia™, which are partnerships with Palantir.

Syntropy provides a data integration and analytics environment wherein healthcare organizations can contextualize and analyze infinitely a wide variety of data types across their entire ecosystem in an unlimited and secure manner. In 2023, Syntropy announced a partnership with Evidium to develop an AI operating system for healthcare: This alliance will make it easier for clinicians to contextualize clinical data at the source and for scientists to securely collaborate on that data. In the era of increasingly prevalent generative AI, it is crucial for AI to be trustworthy and responsible, especially in healthcare.

Athinia™ is targeting the semiconductor industry and is a collaborative data ecosystem where multiple companies leverage AI to solve critical challenges by utilizing data to improve supply chain transparency, quality and reliability of materials and to accelerate time to market. In July 2023, Athinia™ expanded its partnerships to include Tokyo Electron for real-time collaborative analysis of the performance of semiconductor manufacturing equipment. As a cloud solution, Athinia™ is an independent platform that provides a secure and specific data analytics tool for the industry. In the context of a sustainability application, data from various sources can be integrated to facilitate seamless collaboration in modeling, exchanging, and calculating carbon emissions data. As a founding member of the Semiconductor Climate Consortium, Athinia™ is leading the way in establishing sustainability standards on a digital platform. Companies can use this platform to benchmark their emissions performance against their industry peers, identify areas for improvement and participate in collaborative initiatives aimed at reducing emissions.

The ratio of research expenditure to Group sales was 11.6% (2022: 11.3%). The increase is due to the negative sales development.