Thermo Fisher said it will be a “long-term beneficiary” of biopharma customers localizing their supply chains, given most of its network is based in the US and Europe.
Clients are thinking more seriously about where their manufacturing partners are based in light of potential disruptions such as the Biosecure Act, Thermo’s CEO Marc Casper said during its first-quarter earnings call. “Customers are turning to us more than ever … It’s our job to help our customers through shifting landscapes,” he added.
The Biosecure Act could restrict US biopharma companies from doing business with Chinese service providers, and US and European CDMOs have noted the bill opens potential business opportunities.
Thermo Fisher — one of the companies lobbying on the Biosecure Act — would be open to more customers, as it reported on Wednesday that it has seen a small, but steady, decline in its first-quarter revenues year-over-year.
It made $10.34 billion in Q1 of this year, which is down 3% compared to the $10.71 billion it reported in the same period in 2023. Last year was also 9% down compared to earnings of $11.82 billion in the first three months of 2022.
As well as the Biosecure Act, the Novo-Catalent deal also “bodes well” for Thermo Fisher as a “competitive shakeup,” Casper said, adding, “I feel great about it.”
Meanwhile, Casper said that biotech funding appears to have increased in Q1, with clinical pipelines picking up. While the boost will take a while to be reflected in its revenues, it sets up the company for a “stronger set of market conditions as we enter 2025,” he added.
Thermo Fisher’s total revenue dipped last year to $42.86 billion, down from $44.9 billion in 2022, due to lower biotech funding.
In the first three months of 2024, the company’s laboratory products and biopharma services brought in $5.7 billion, followed by its life sciences business at $2.3 billion and then analytical instruments at $1.1 billion.