Danaher 3Q Earnings Rise; Pharma R&D Spend Expected to Rebound — Update

By Nicholas G. Miller

Danaher posted higher third-quarter earnings and said it expects pharmaceutical companies to increase research-and-development spending as tariff uncertainty eases.

"We do see the tariff situation stabilizing," Chief Executive Rainer Blair said in the company's earnings call. Leaders of pharmaceutical companies are showing "more confidence now in making these investment decisions," he said.

A rebound in pharmaceutical-research investment would be a boost to Danaher, which provides technologies and tools for drug development. The Washington, D.C., company reiterated its full-year profit outlook after its bioprocessing business showed continued strength in the third quarter.

Danaher shares rose 7.8% to $224.65 Tuesday. The stock is down 2.2% so far this year.

Recently, Pfizer and AstraZeneca agreed to separate deals with the Trump administration that included tariff exemptions and plans to sell drugs directly to consumers at discounted prices. Analysts say the deals brought clarity to the pharmaceutical industry, providing assurance it could arrange similar deals to avoid Trump's promised 100% tariff for pharmaceutical imports and ease the administration's pressure to slash drug prices.

In the third quarter, "We continued to see a modest recovery in pharma R&D spending, though it remains below historical levels," Blair said, but added that the removal of the tariff overhang could boost pharmaceutical investments further. "With some workable deals being made...that's provided more confidence to the most senior decision makers here in the pharma industry."

Danaher said it was seeing strong demand in its bioprocessing business for monoclonal antibodies, which are lab-made proteins that act like human antibodies. "Underlying biologic demand has grown double digits annually over the last 10-plus years, and we expect strong demand growth to continue in 2025 and beyond," Blair said.

The company said its biologics business was also getting a boost from several years of record numbers of drug approvals from the U.S. Food and Drug Administration, as well as from a shift in the pharmaceutical-development pipeline toward biologics.

Blair also said he expected additional sales of capital equipment due to several pharmaceutical companies' recent commitments to build new manufacturing facilities in the U.S. Trump's planned pharmaceutical tariffs have an exemption for companies that commit to building a manufacturing facility in the U.S.

Still, Danaher said it continued to see weakened demand among drug researchers in the government and among universities due to uncertainty around federal-government funding cuts.

In the third quarter, the life-sciences and diagnostics company reported net income of $908 million, or $1.27 a share, up from $818 million, or $1.12 a share the prior year.

Adjusted earnings were $1.89 a share, beating analysts' expectations of $1.72, according to FactSet.

The company posted $6.05 billion in sales, up from $5.8 billion the year before. Wall Street had expected $6 billion.

The company reaffirmed its full-year adjusted earnings guidance of $7.70 to $7.80 a share. Analysts see $7.77 a share.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

October 21, 2025 13:41 ET (17:41 GMT)