Research and Development

We are a diversified science and technology company with a leading position in the life science, healthcare and electronics industries. In line with our new vision of “Sparking Discovery. Elevating Humanity”, we are striving for innovation in all three business sectors in order to make our growth plans a reality. We conduct research and development (R&D) worldwide to develop new products, services and solutions 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 as early as the product development stage (see “(Group-) Sustainability Statement”).

Around 6,400 employees (2023: approximately 6,500) worked in R&D and related support functions in 2024. They dealt with innovations to address long-term health and technology trends in both established and growth markets.

Expenditure for R&D amounted to € 2.3 billion in 2024 (2023: € 2.4 billion).

The organizational setup of our R&D activities reflects our structure. In the Life Science business sector, we drive scientific breakthroughs with innovative technologies for applications in natural sciences and pharmaceutical research that enable life-saving novel therapies and treatments for diseases such as cancer and diabetes. In the Healthcare business sector, we develop innovative therapies, leveraging internal discoveries and external partnerships. In the Electronics business sector, we are accelerating the development of the next generation of microchips to enable innovations in the semiconductor and display industry that are needed for AI applications and the digital world of the future.

At Group level, we want to create synergies both within and between our business sectors and continuously develop new areas of innovation. One of our key objectives is to continue expanding the scope of our innovation by looking into new technologies, markets and digital business models as well as by leveraging existing assets and capabilities and combining them with data and digital technologies. Our efforts in this area include Syntropy^® and Athinia^®, which are partnerships with Palantir. Both platforms enable secure AI data flows and data sharing ecosystems that can help increase efficiencies while ensuring that stakeholders maintain control of their intellectual property.

We opened our Digital Hub in Singapore in January 2024. Supported by the Singapore Economic Development Board, the Digital Hub aims to drive progress within the healthcare and semiconductor industries. Our Digital Hub is also where the expertise of Syntropy^® and Athinia^® will converge to help data owners integrate and curate their data across organizations.

In addition, we are continuing to develop opportunities at the intersection of our business sectors and converging technologies to develop solutions that enable our three business sectors to bring value to the industries they serve:

• We are continuing to build our automated design-make-test-analyze platform powered by lab automation and AIDDISON™, our generative AI-powered active ingredient discovery platform. Following its launch by Life Science in 2023, we updated AIDDISON™ in 2024 to meet the needs of our customers even more effectively. In addition to external commercialization, we also use it internally in our Healthcare business sector in early stages of drug discovery. Our AI in Drug Discovery program will accelerate the discovery of new and better drug candidates, making new therapies available to patients faster.
• We are using our capabilities across our sectors in messenger ribonucleic acid (mRNA) synthesis, lipid nanoparticle (LNP) synthesis and formulation, targeted delivery, and AI to enable the development of “smart” LNPs that can more effectively target different tissue types including hard-to-reach biological targets to treat various diseases.
• We contribute to our Healthcare pipeline through a new type of antibody-targeted drug modality capable of selectively delivering PROTACs (PROteolysis TArgeting Chimeras) to tumor cells. The newly developed technology, which is patent pending, has the potential to release twoactive ingredients in a targeted manner that enable tissue- and target-selective degradation. This “plug-and-play” technology can be applied to multiple therapeutic targets across different therapeutic areas, potentially revolutionizing the fields of both antibody-drug conjugates (ADCs) and PROTACs.

In 2024, we also successfully completed several pilot projects of our “Smartfacturing” program, i.e. highly adaptable, modular smart factories, including the development and implementation of a new automation technology for GMP (good manufacturing practice) production that enables equipment connectivity. This technology uses special software components called module type packages to interlink different production devices and systems based on a common standard. This project was supported with funding from the German Federal Ministry for Economic Affairs and Climate Action.

We are currently utilizing the new automation technology to produce both pharmaceuticals and chemicals, but it can also be applied to various production processes and manufacturing industries. To further advance our initiatives in this area, we have formed a strategic partnership with Siemens, aimed at fostering transformative projects across our three business sectors. By integrating our expertise in Life Science, Healthcare and Electronics with Siemens’ leadership in advanced hardware and software development, this partnership will facilitate the design of faster, more cost-effective and more sustainable manufacturing processes.

The following table depicts research and development costs of the business units in fiscal 2023 and 2024:

The ratio of research expenditure to Group sales was 10.8% (2023: 11.6%). It has declined due to positive sales development and the discontinuation of clinical studies in Healthcare.