US Life Science Tools & Diagnostics Resumption of coverage: Is THIS the bottom? (Neutral on the sector, Outperform on WAT, A, GH, NTRA)

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US Life Science Tools & Diagnostics Resumption of coverage: Is THIS the bottom? (Neutral on the sector, Outperform on WAT, A, GH, NTRA)

25 June 2026

Coverage Resumption

US Life Science Tools & Diagnostics

US Life Science Tools & Diagnostics Resumption of coverage: Is

THIS the bottom? (Neutral on the sector, Outperform on WAT, A,

GH, NTRA)

We are resuming coverage following the Senior Analyst's return from maternity leave. Eve Burstein

+1 917 344 8313

eve.burstein@bernsteinsg.com There are (finally) many things going right with the sector. On both a quantitative and

a qualitative basis, things are improving: New drug approvals, trial starts, and funding (NIH

Louisa Qiu budget and outlays, licensing deals, investments in biotech, pharma R&D) are all better

+1 917 344 8495 in the last 12 months vs. the 12 months prior. There are also tailwinds coming down the louisa.qiu@bernsteinsg.com

pike: Funding will start translating into customer spend, re-shoring will drive incremental

Specialist Sales investment, and AI-driven demand for semiconductor-related tools will continue to grow.

Yesterday the sector was up 5% vs. the SPX flat - when was the last time that happened?

Christian Moore

+1 917 344 8555 However, there are remaining challenges. Allocated money is not yet flowing through christian.moore@bernsteinsg.com

into spend (e.g., NIH budget remained intact for this year, but outlays are tracking well

below recent historical levels; biotech funding is up considerably, but we haven’t seen

biotech start spending that money for discovery and research, i.e. preclinical work). We

have more confidence in some places (biotech, than others (academic & government) that

funding will translate to spend - but it is difficult to underwrite the timing of that translation,