Thermo Fisher Scientific is looking to build upon its strong momentum from last year as it enters 2025. The company plans to deploy its proven growth strategy, and continue to drive share gain, execute mergers and acquisitions (M&A) and utilise a return of capital strategy, says Chairman, President and CEO Marc N. Casper.
In a presentation at the JP Morgan Healthcare conference, taking place January 13-16 in San Francisco, Casper highlighted that the company earned $42bn in revenue (Q3 2024 LTM), serving a $235bn market with a long-term growth of 4–6%, effectively outperforming its peers despite a declining market.
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As a result of its investment into artificial intelligence (AI), Thermo Fisher has reported a 20% increase in lead time improvement in its Laboratory Products Business for supply chain and a 30% increase in effective capacity at major Pharma services and Bioproduction sites for manufacturing operations.
To further its capital deployment and M&A strategy, the company also closed the acquisition of Olink in Q3 2024. Casper said the company was able to acquire the business at a valuation that was attractive to both parties. “And it was great to win for the largest human proteomics study that’s going on, which is sponsored by the UK Biobank and the pharmaceutical industry…that really continues to validate that Olink is the platform for that area of research…That positions us really well, so we’re excited to be able to do that and solidify our industry leadership,” says Casper.
To emphasise the company’s strong position, Casper also highlighted that the company deployed $4bn dollars on share buybacks, including $1bn in Q4 2024, and returned $600m to their shareholders from dividend increases.
Another key success of 2024 was the company’s progress on corporate social responsibility, focusing on STEM education, health equity, and environmental sustainability, with specific targets for reducing emissions and increasing renewable energy use. “Since our baseline, we’ve reduced [Scope 1 and 2 emissions] by 30%, and we’re well on the way to achieve a 50% reduction [by 2030]. [Today], 44% of our energy or electricity comes from renewable sources, and we’ll achieve 80% [renewable electricity globally] by the end of this decade, if not higher,” notes Casper. According to GlobalData’s Job Analytics platform, environment was the top theme in hiring trends by Thermo Fisher for the past eight months.
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By GlobalDataAs a market leader in sterile fill finish manufacturing, Thermo Fisher has seen a strong demand for this set of capabilities following Novo Nordisk’s acquisition of Catalent, which was announced in 2024. Catalent is no longer a competitor, particularly for sterile fill finish demands for its glucagon-like peptide (GLP)-1 medicines, thus taking capacity out of the market.
When asked about the potential impact of the new Trump administration on Thermo Fisher and the broader pharmaceutical industry, Casper states that there will be focus on a pro-growth business environment from a taxation perspective, including a better M&A landscape from a regulatory standpoint. The Thermo Fisher President and CEO remained confident that the company would be well positioned to navigate changes in tariffs as effectively or more effectively than its competitors and to help its customers do the same, given its global footprint.
China, where the company has local operations, is Thermo Fisher’s second largest market, generating 8% of revenues, and is a meaningful end market for its analytical business. In 2024, Thermo Fisher’s analytical business had a great year in terms of differentiated growth and a strong market share, said Casper, suggesting the company remains well-positioned despite geopolitical headwinds in China.
Regardless of whether or not the US Biosecure Act passes, the dialogue surrounding it will continue, according to Casper, while more of the manufacturing work moves to Western-based facilities and some facilities in India. Despite disruptions to customers, Thermo Fisher is well-equipped to handle changes resulting from the BioSecure Act, he said.
The company is poised for recovery and growth in 2025 and beyond, with strong confidence in its ability to convert top-line results into robust earnings. “We have proven our ability to grow faster than the market through all types of market conditions. You can look at us versus the peers [during] high growth periods, the pandemic, post-pandemic, all these different things – and it’s very consistent. So, our confidence as the industry leader to be able to grow meaningfully faster than the market is extraordinarily high.”
