When FX Becomes Another Layer in the Pharma Valuation Puzzle

A weak dollar is quietly minting tomorrow’s bargains in European pharma manufacturing. 

The pattern is visible in public markets:

- Bayer: Q2’25 EBITDA down ~1.7 margin points from FX.

- Merck KGaA: –7.2% hit to EBITDA-pre, –0.4pp on margin.

- Roche: –5pp core operating profit impact.

- Novartis: guiding –1pp to core OI for FY if rates hold.

Now apply the same math to European API makers, CMOs and CDMOs with cost bases in EUR/CHF and big USD customer books:

- Costs in strong currencies

- Sales in USD

- Minimal natural hedging

On paper, EBITDA margins are down 2–4 points. In reality? Constant-currency performance is intact, sometimes growing.

With some patience and a stronger dollar, these API/CDMO/CMO businesses could see EBITDA and valuation multiples reflate without operational heroics.

Today’s “FX-hit” manufacturer could be tomorrow’s “how did they buy it that cheap?” story.