The following Management's Discussion and Analysis ("MD&A") will help you understand the financial condition and results of Millipore Corporation's operations. The MD&A is a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to the consolidated financial statements.

Business Overview

Millipore is a global leader in life science. We provide innovative products, services and solutions that help our academic, biotechnology and pharmaceutical customers advance their research, development and production. They use our products and services to increase their speed and to improve their consistency, while reducing costs in laboratory applications and in biopharmaceutical manufacturing. Our extensive technical expertise and applications knowledge give us the unique ability to help address research and manufacturing problems. We engage in peer-to-peer discussions with scientists to confront challenging human health issues.

We have two operating divisions. Our Bioscience Division provides innovative products and technologies that improve laboratory productivity and work flows for life science research. Our Bioscience Division contributed approximately 45% of our 2008 revenues. Our Bioprocess Division helps pharmaceutical and biotechnology companies develop their manufacturing processes, optimize their manufacturing productivity and ensure the quality of their drugs. It contributed approximately 55% of our 2008 revenues.

We provide a wide range of products and services to a variety of customers around the world. We do not rely on any single business, market or economy, and the breadth of our products and services allows us to target growth on a number of dimensions.

The balance between the products and services sold through our Bioprocess and Bioscience divisions and our

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global market reach allowed us to mitigate some of the sales weakness we experienced in our Bioprocess Division during 2008. While Bioprocess revenues declined in 2008, the decline was somewhat offset by the growth of our Bioscience Division. We also benefited from faster revenue growth in Europe and Asia/Pacific where we have a greater diversification of end markets and customers.

BUSINESS DRIVERS

The primary business driver of our Bioscience Division is the research activities of pharmaceutical and biotechnology companies, academic institutions, governments and other organizations. Demand for our products increases with the amount of research being conducted worldwide. Key market trends affecting the business include the global expansion of laboratories, particularly in Asia, the move from genomic-based research to protein research and cell biology, and higher demand for workflow-based solutions to improve laboratory productivity. For example, pressure on pharmaceutical and biotechnology companies to identify new drug candidates has increased demand for our work flow productivity products. Pre-validated, optimized products, especially those combined in kits, increase efficiency and save

32 MILLIPORE FORM 10-K 2008

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researchers time. We have expanded the number of new products we offer and have incorporated our lab filtration, reagents and other products into critical laboratory protocols.

We believe customers will pay a premium for our innovative products, technical expertise and streamlined services.

Other business drivers of the Bioscience Division include:

[[Image Removed: LOGO]] New products and customer work flow solutions. For example, work flow solutions that include devices, consumable products, and technical service and expertise.

[[Image Removed: LOGO]] An ability to collaborate with customers electronically through the Internet and other electronic commerce channels, particularly relating to our life science business.

[[Image Removed: LOGO]] Access to life science thought leaders and an ability to license, commercialize and acquire technologies.

The business drivers of our Bioprocess Division include the demand for, and the corresponding production of, commercial therapeutics such as biologic drugs. Over the past decade, approvals for new biologics and new indications for existing biologics are increasing, particularly for monoclonal antibodies, cell-culture based vaccines and other recombinant protein-based therapeutics. As pharmaceutical companies shift more of their drug pipeline from chemically-based drugs to biologic drugs, our business will grow if a greater number of these molecules

are commercially approved and if we win production process steps for these molecules.

Monoclonal antibodies are among the fastest growing biologic drugs. They are separation-intensive, complex to produce and require significant use of our Bioprocess products. Demand is increasing because of their ability to treat diseases for which there have been few therapies. The growth in biologics is also creating increased demand for our consumable products used in their production. We provide a number of technologies for use in small-scale drug production. They can be reliably scaled up to commercial manufacturing volumes as demand grows.

Our expertise in purifying monoclonal antibodies positions us strategically to gain customer access and increase our applications knowledge. These intimate customer relationships help us identify new technologies and customer needs. They also help our customers optimize their productivity. Therefore, we typically see our revenues increase from early stage clinical development to late stage clinical development and ultimately upon approval of a specific drug. This is particularly true during the later stages of the process, like clinical trials and commercial production.

Other business drivers of the Bioprocess division include:

[[Image Removed: LOGO]] Commercialization of innovative products that increase production speed and productivity, and that reduce risk. For example, new biologic drug manufacturing platforms that employ disposable manufacturing solutions.

[[Image Removed: LOGO]] Changes in the number of manufacturing campaigns or inventory levels at our large biopharmaceutical manufacturing customers.

[[Image Removed: LOGO]] Biopharmaceutical manufacturing capacity expansion, particularly in growth markets in Asia.

[[Image Removed: LOGO]] Increasing customer manufacturing quality standards resulting in the need for more sophisticated process monitoring and quality control.

[[Image Removed: LOGO]] Market shifts in the demand for our products. For example, shifts toward generic and biosimilar drugs as patents on existing drugs expire and toward animal-free manufacturing supplements.

[[Image Removed: LOGO]] Our customers' focus on process optimization to drive efficiency and drug safety.

PART II



OUR STRATEGY

Our corporate strategy is to selectively focus on the most attractive segments
of the life science research and biopharmaceutical manufacturing markets where
we can establish market leadership, generate the highest levels of growth, and
drive competitive differentiation. Our strategy has been organized around the
following objectives:



1         Strengthen our leadership position with biotechnology manufacturing
          customers by expanding our bioprocess product offerings
2
          Establish Millipore as a strategic supplier in bioscience research
          markets by increasing our product breadth and expanding into new
          markets
3
          Lead our industry in product quality and manufacturing effectiveness
4
          Attract, retain and develop talented and motivated employees

The strategy of our Bioscience Division is to capitalize on our global infrastructure and core capabilities in filtration, reagents and assay development to provide differentiated offerings in fast-growing market segments. The division pursues targeted, market-specific strategies in laboratory water, drug discovery and life science research.

The strategy of our Bioprocess Division is to leverage our leading market position and broad product portfolio to offer integrated productivity improvement solutions to biopharmaceutical companies. We help them increase their speed, lower their costs, minimize their risk and increase their quality. We believe the division is uniquely capable in these areas. The division's global sales organization focuses on selling our applications expertise, as well as products and services that enable our customers to move from product-centric manufacturing processes to an optimized and integrated work flow approach.

2008 HIGHLIGHTS

Consolidated revenues of $1,602.1 million for 2008 increased $70.5 million, or 5 percent, compared to 2007. The 2008 revenue increase included a 4 percent favorable

effect from changes in foreign currency translation rates. Adjusting for this item, our consolidated revenues for 2008 grew 1 percent. Changes in product pricing had an insignificant effect on the year-over-year comparison. We made no business acquisitions in 2008.

In 2008, higher Bioscience revenues resulted primarily from sales growth of our laboratory water products and services. This increase was offset by softness in Bioprocess revenues from some of our large biotechnology customers and weakening global economic conditions. After experiencing a significant decline in the first half of the year, our Bioprocess business stabilized in the second half of 2008 as some of our large key accounts increased their purchases. However, full year Bioprocess revenues declined, primarily due to the softness experienced in North America in the first half of 2008.

Operating profit increased to $233.5 million in 2008 from $216.7 million in 2007. Higher revenues and a more profitable business and product mix were the primary drivers. Additionally, productivity improvements resulting from our global supply chain initiatives, the alignment of our costs to account for weaker than expected revenue growth, and the favorable effect of foreign currency translation contributed to the increase in our operating margin. Our operating profit margin slightly increased to 14.6 percent in 2008 from 14.2 percent in 2007.

Diluted earnings per share ("EPS") of $2.62 in 2008 increased $0.14 compared to 2007. Higher operating profit and lower interest expense both contributed to higher EPS.

We generated $269.6 million of operating cash flows in 2008, a 21 percent increase over 2007. We repaid $85.1 million of our overall debt during the year. We will continue to focus on improving our operating cash flow, which we expect to use to further reduce our debt and make business acquisitions.

We announced the first phase of our global supply chain initiative in 2004. We will complete this phase in 2009. On September 10, 2008, we announced the second phase of the program, which we expect will enable us to further optimize the performance of our global supply

34 MILLIPORE FORM 10-K 2008

chain and improve operational efficiency by reducing our cost structure. We undertook this initiative in part to respond to market conditions causing revenue declines in our Bioprocess Division. More importantly, however, it is part of our long-term strategy to further improve the efficiency of our global supply chain.

Results of Operations

REVENUES

The performance of our broader business portfolio, the underlying growth of our business in Europe and Asia/Pacific, and the execution of our strategy resulted in revenue growth in 2008. By shifting the geographic composition of our revenues, we have been able to maintain revenue growth in spite of declines in some of our key North American markets.

Bioprocess Division

2008 versus 2007

Bioprocess revenues of $880.8 million in 2008 increased only $2.3 million from 2007. This increase included a favorable foreign currency translation effect of 4 percent. Adjusting for this item, Bioprocess revenues declined 4 percent in 2008. This decline was primarily attributable to lower sales of certain upstream and downstream bioprocessing products used in biopharmaceutical manufacturing, which was partially offset by increased sales of our process

monitoring tools products. Lower sales of our upstream and downstream bioprocessing products were caused by lower spending by some of our largest biotechnology customers and weakening global economic conditions. We experienced significantly lower sales to these customers, because of their reduced rate of monoclonal antibody production and the reduction of their inventory levels since the third quarter of 2007. Our process monitoring tools, which are used to test for biopharmaceutical contaminants, performed well in 2008. These products are sold to a diverse customer base, some of which have not been adversely affected by the sales softness we are experiencing with our large biotechnology customers. In particular, we experienced increased demand for our Novaseptum® products, a product line we acquired in our 2005 acquisition of Novaseptic.

Bioprocess revenues were also adversely affected by fewer approvals of new biologic drugs in recent quarters. New biologic drug approvals are a significant driver of our Bioprocess revenue growth. Despite the recent lower demand, we believe the overall biotechnology industry remains healthy. This is evidenced by the growth in a number of commercially marketed biologic drugs and vaccines and continued investments in new biologic facilities and biotechnology companies. After experiencing a significant decline in the first half of the year, our Bioprocess Division stabilized in the second half of 2008 as some of our large key accounts increased their purchases. Sales of our disposable systems and components continued to experience strong growth year over year.

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From a geographic perspective, revenues for 2008 in the Americas, Europe and Asia/Pacific were $345.6 million, $412.7 million, and $122.5 million, respectively. Excluding the favorable foreign currency translation effect, revenues in the Americas, Europe and Asia/Pacific decreased 10 percent, increased 1 percent, and increased 3 percent, respectively, in 2008 over 2007. The decrease in the Americas was primarily attributable to the lower sales to a handful of our largest biotechnology customers in the first half of 2008. The increase in Europe was primarily driven by sales of our process monitoring tools products, which was somewhat offset by a decline in sales of both upstream and downstream bioprocessing products in the 2008 second half. The increase in Asia/Pacific was primarily driven by strong sales of downstream bioprocessing products in Japan and China in the year and higher purchases from a large customer for a new manufacturing plant in Asia.

2007 versus 2006

Bioprocess revenues of $878.5 million for 2007 increased $128.7 million, or 17 percent, compared to 2006. This increase included a favorable effect of foreign currency translation of 5 percent and a favorable effect of business

acquisitions of 7 percent. Adjusting for these items, Bioprocess revenues for 2007 grew 5 percent. Our year-over-year revenue growth rate was adversely affected by reductions in purchases of our chromatography media and cell culture supplements products from a limited number of our key U.S. customers in the 2007 second half. Revenue growth in 2007 was primarily attributable to higher sales of our products used in downstream bioprocessing, particularly our filtration and systems hardware and components products. Sales of our systems hardware and components products grew in 2007 because of our customers' drug manufacturing campaigns occurring in Europe and Asia. Sales of our disposable systems and components products grew because more customers migrated to single-use, disposable technologies that eliminate the need for cleaning stainless steel and glass equipment. Biopharmaceutical manufacturers also seek flexible manufacturing components and solutions because they enable reduced time between manufacturing runs and because they can be configured and validated to meet customized biological manufacturing needs. Sales of our process monitoring tools, which are used to test for biopharmaceutical contaminants, increased because of the overall health of the biopharmaceutical markets in Europe and Asia.

36 MILLIPORE FORM 10-K 2008

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From a geographic perspective, revenues for 2007 in the Americas, Europe and Asia/Pacific were $383.9 million, $384.5 million, and $110.1 million, respectively. Excluding the favorable effects of foreign currency translation and acquired businesses, revenues in the Americas, Europe and Asia/ Pacific decreased 6 percent, increased 11 percent, and increased 29 percent, respectively, in 2007 over 2006. The Americas decrease was primarily attributable to the sales decline of our chromatography media and cell culture supplements products. The European and Asia/ Pacific increases were primarily attributable to higher sales of our downstream processing systems hardware products. Our core process filtration products also had strong growth in Europe and Asia/Pacific regions, particularly in China and India, which was the result of our direct investment in sales and marketing and infrastructure for these markets.

Bioscience Division

2008 versus 2007

Bioscience revenues of $721.3 million for 2008 increased $68.2 million, or 10 percent, compared to 2007. This increase included a favorable foreign currency translation effect of 4 percent. Adjusting for this item, Bioscience revenues grew 6 percent, which was primarily driven by continued strong demand for our laboratory water products and services. Bioscience revenue growth was reduced by 1 percent due to the elimination of a small product line. Successful new product introductions, execution of our

sales and marketing initiatives, and continued expansion of our new e-commerce business platform all contributed to the revenue growth. The successful launch of new products in the past two years such as the Milli-Q® Integral and Milli-Q® Advantage by our laboratory water business unit and strong growth in consumables and services contributed to the strong performance. Our drug discovery business unit also grew driven by higher sales of biomarker and immunoassay products as a result of new product introductions. Sales of our life science business unit's biotools products also contributed to the revenue growth resulting from higher sales of analytical sample preparation, cell biology and molecular biology products. This is a reflection of a healthy level of life science research activities in the protein research and cell biology markets.

From a geographic perspective, revenues for 2008 in the Americas, Europe, and Asia/Pacific were $273.5 million, $270.6 million, and $177.2 million, respectively. Excluding the favorable effects of foreign currency translation, revenues in the Americas, Europe, and Asia/Pacific increased 3 percent, 9 percent, and 9 percent, respectively, in 2008 over 2007. The increases in the Americas were primarily attributable to the strength of our laboratory water and our drug discovery products, which was offset by a slight decline in life science products. The increases in Europe were primarily the result of strong sales of our laboratory water products and services while life science and drug discovery products also contributed to the

growth in this geography. The increases in Asia/Pacific were primarily the result of strong sales of our laboratory water products and services, particularly in Japan and China, and life science products in Japan. The growth in our life science products in both Europe and Asia/Pacific is partly attributable to the revenue synergies from our Serologicals acquisition by bringing together devices and content.

2007 versus 2006

Bioscience revenues of $653.1 million for 2007 increased $147.5 million, or 29 percent, compared to 2006. This increase included a 5 percent favorable effect of foreign currency translation and a 16 percent favorable effect of business acquisitions. Adjusting for these items, Bioscience revenue for 2007 grew 8 percent. This year-over-year increase was primarily driven by the overall strength of the life sciences research market and increased levels of life sciences research and development in both universities and pharmaceutical and biotechnology companies, particularly in international markets. Revenue growth in 2007 was primarily attributable to strong demand for our laboratory water products and higher sales of our life sciences products, such as analytical sample preparation and molecular biology products. Our successful implementation of initiatives designed to align sales and product management goals, to prioritize key customer relationships, and to execute targeted sales and marketing campaigns has positioned us well with our research customers. Our drug discovery business also grew in the 2007 second half, particularly in sales of multiplex immunoassays, because of strong market demand for such products.

From a geographic perspective, revenues for 2007 in the Americas, Europe and Asia/Pacific were $263.8 million, $238.5 million and $150.8 million, respectively. Excluding the favorable effects of foreign currency translation and the acquired businesses, revenues in the Americas, Europe, and Asia/Pacific increased 6 percent, 5 percent, and 16 percent, respectively, in 2007 over 2006. The increases in the Americas and Europe were primarily attributable to higher sales of laboratory water and drug discovery products. The majority of the remaining revenue increase occurred in international growth markets,

particularly India and China. This reflected the increased levels of life science research and the return on our continued investment in sales and marketing infrastructure in growing Asia/Pacific markets.

GROSS PROFIT MARGIN

2008 versus 2007

Gross profit increased $42.3 million, or 5 percent, in 2008 compared to 2007. The primary drivers of the increase were higher revenues, improved business and product mix, and productivity improvements. Bioscience revenues, which have higher gross profit margins, represented a larger percentage of our revenues, while sales of large Bioprocess systems, chromatography media and insulin products with lower gross profit margins represented less of our sales mix. Additionally, the absence of Serologicals business acquisition inventory fair value adjustments and acquisition integration costs in 2008 contributed to the increase. Somewhat offsetting increased gross profit margin was the adverse effect of a stronger Euro. When translated into U.S. dollars, our Irish and French manufacturing operations represented a higher proportion of our total manufacturing costs in 2008. Gross profit margin for 2008 remained relatively flat at 53% compared to the prior year.

In September 2008, we announced the second phase of our global supply chain initiative, which is part of our long term strategy to further improve the efficiency of our global

38 MILLIPORE FORM 10-K 2008

supply chain. We incurred charges associated with our global supply chain initiative (primarily employee separation costs, facility closure costs, and accelerated depreciation) of $16.5 million and $11.3 million in 2008 and 2007, respectively. We expect to incur approximately $15 million of additional costs related to this initiative in 2009.

Significant costs affecting our gross profit margin are shown below.

PROGRAM AND ACQUISITION RELATED EXPENSES, 2008 versus 2007

$ in millions



                                                                      Increase/
                                                      2008    2007   (Decrease)
     Manufacturing consolidation1                    $16.5   $11.3         $5.2
     Fair value adjustments for acquired inventory       -    11.1        (11.1 )
     Acquisition integration                             -     2.7         (2.7 )
     Acquisition amortization                          9.4     9.5         (0.1 )
     Total                                           $25.9   $34.6        $(8.7 )

1Primarily employee separation costs, facility closure costs and accelerated depreciation.

2007 versus 2006

Gross profit increased $180.7 million, or 29 percent, in 2007 over 2006. Increased sales volume, an improved business mix due to a higher proportion of Bioscience revenues in 2007, and productivity improvements and lower spending as a result of our supply chain initiatives contributed to the increase. In addition, we had lower expense related to business acquisition inventory fair value adjustments and lower integration costs related to the Serologicals acquisition in 2007, compared to 2006. Increased sales volume was primarily due to the inclusion of Serologicals in our operating results for the full year in 2007, compared to 24 weeks in 2006. This had a favorable impact on our business
mix. Significant costs affecting our gross profit margin are shown below.

PROGRAM AND ACQUISITION RELATED EXPENSES,

2007 versus 2006

$ in millions



                                                                      Increase/
                                                      2007    2006   (Decrease)
     Manufacturing consolidation2                    $11.3   $23.2       $(11.9 )
     Fair value adjustments for acquired inventory    11.1    24.9        (13.8 )
     Acquisition integration                           2.7     4.5         (1.8 )
     Acquisition amortization                          9.5     4.6          4.9
     Total                                           $34.6   $57.2       $(22.6 )

2Primarily employee separation costs, facility closure costs and accelerated depreciation.

Somewhat offsetting increased gross profit margin was the adverse effect of a stronger Euro. As a result, when translated into U.S. dollars, our Irish and French manufacturing operations represented a higher proportion of our total manufacturing costs in 2007.

. . .