Vendors are feeling the economic impact of dwindling COVID-related bioproduction, but Thermo Fisher and Danaher remain unfazed, the firms said at JPM 2023.

Many bioprocess vendors reported falling orders in the latter half of 2022 as biopharma reduced stock orders for vaccine and therapeutics following two years of unprecedented pandemic-related growth.

This bioprocess destocking dynamic – described by some as a “swift normalization of demand” – was brought up at this week’s JP Morgan Healthcare Conference in San Francisco but analyst Rachel Vatnsdal claimed Big Vendor Thermo Fisher had not seen the “softness that other players have been seeing from an orders perspective.”

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Thermo Fisher’s resilience came down to its broad customer base, explained CEO Marc Casper.

“When I see a lot of the industry commentary, I think a lot of it has to do with COVID and what percent of a company’s portfolio was COVID related?” he told Vatnsdal. “On a relative basis within bioproduction, it wasn’t a very large percentage of our portfolio, so I think a lot of the stocking dynamics is probably related to that.”

Instead, he said the bioprocess business (which represents around 10% of Thermo Fisher’s total revenue) delivered a “very strong performance” in 2022. “When I look at last year, and looked at the performance of the business, and through the third quarter, if pharma and biotech was growing for us about 15%, right, for that whole end market, the bioproduction business was growing meaningfully faster than that.”

Danaher, which reported a 20% drop in orders for Cytiva and Pall in Q3 2022, also spoke of Biopharma’s destocking dynamic.

“Where we saw [inventory decline] was related to larger players with larger COVID related, so think vaccines or therapeutics programs that ultimately either didn’t come to fruition or the uptake […] didn’t generate the volumes,” CEO Rainer Blair told Vatnsdal.

“What we are seeing there is that these customers with whom we are in a dialogue with regularly are starting to burn down those inventories because they are applicable to other programs that we have, so that is going as expected.”

Blair added fourth quarter non-COVID business grew at a rate of more than 20% and is optimistic for the year ahead.

“We are in a dialogue with our customers nailing down with them their production plans for 2023. Those roll-ups are in process. The team is working it as we speak, and, actually, I will be updating all of you here during our earnings call on January 24th, so just a couple of weeks away here on where all that shakes out for ‘23.”