Thermo Fisher Scientific (TMO) Morgan Stanley 22nd Annual Global Healthcare Conference summary

Market environment and performance

• 2024 has unfolded as expected, with end markets gradually improving each quarter after significant volatility in 2023.

• Market share gains and differentiated performance led to raised guidance twice during the year, with a positive outlook for 2024.

• Pharma and biotech, representing 60% of revenue, saw a low single-digit decline due to a mid-single-digit headwind from vaccine and therapy runoff, but underlying growth is expected as COVID impacts fade.

• Biotech funding and clinical research pipelines are improving, while pharma is stabilizing post-IRA adjustments, with a bullish midterm outlook.

• Academic/government and industrial/applied segments (each ~15% of revenue) delivered low single-digit growth, driven by innovation and strong demand in electron microscopy and material science.

Business segment updates

• Analytical instruments grew 1% in H1 2024 despite tough comps and weak China demand; stimulus in China is expected to boost future growth.

• Bioproduction is recovering from pandemic-driven volatility, with sequential order and revenue growth, and inventory normalization largely complete.

• Clinical research (PPD) delivered mid-single-digit growth in H1, with strong authorizations indicating future revenue; pricing remains stable, with leaders competing on capability rather than price.

• Pharma services saw robust demand in sterile fill finish, with a slight H1 decline due to COVID runoff but a strong book of business and positive tailwinds ahead.

Regional and macroeconomic insights

• China remains a long-term growth market despite current economic challenges; stimulus programs are expected to drive orders and revenue into 2025.

• Geopolitical tensions exist, but the business is well-positioned through strong local relationships and a focus on collaboration.

• U.S. election and policy changes (IRA, tax, antitrust) are being monitored, with a commitment to support customers and adapt to any administration.