Thermo Fisher services biz up 28% as Patheon enters the mix

Construction is underway at the ‘largest outsourced single-use site in North America’ says Thermo Fisher, a year after acquiring CDMO Patheon.

In April 2018, Thermo Fisher Scientific announced a $50 million (€44 million) expansion at a plant in St Louis, Missouri to add 16,000 L of single-use capacity. The facility is run by contract development and manufacturing organization (CDMO) Patheon, acquired by Thermo Fisher in August 2017 for around $7.2 billion.

And during a Q3 financial call, Thermo Fisher CEO Marc Casper said construction began at the plant during the quarter and claimed that “once completed at the end of 2019, St. Louis will be the largest outsourced single-use biologics site in North America.”

Thermo Fisher’s services business jumped up 28% a year after acquiring CDMO Patheon. Image: iStock/oatawa

The additional 64,000 ft² of space will double the CDMO’s global biologics capacity, but the acquisition – a year on – also demonstrates Thermo Fisher’s differentiated value proposition for pharma and biotech customers, Casper continued.

“We’ve created a strong pharma services capability by combining Patheon’s drug formulation, development and manufacturing services with our clinical trials logistics. With our full suite of services, our customers can better leverage our deep expertise while optimizing their capital investments.”

He added: “We had some nice quick wins in our clinical trials business by providing these services to our legacy Patheon customers… [and] legacy Patheon is benefiting from access to our broader customer base, which bodes very well for the future.”

Thermo Fisher further stressed the importance and benefit of the CDMO through the revenue growth in its Lab Products and Services Segment, which includes the legacy Patheon business. For the third quarter, the integrated sector increased 28% year-on-year to $2.47 billion, while organic (not including Patheon) growth stood at 11%.

Biopharma sector

Like fellow bioprocessing vendors Sartorius and Pall, Thermo Fisher saw another quarter of high growth, built on the number of biologic candidates progressing through the clinic.

“Every biotech and pharmaceutical customer around the world has some relationship with Thermo Fisher Scientific today,” said Casper. “What we’re seeing is that [with] the multiproduct line and service line relationships, we’re just getting larger and larger relationships, where customers are just working with us and more and more service lines because our businesses are doing a good job of creating value for them.”

The firm’ Life Sciences Solutions Segment revenue grew to $1.50 billion for the quarter, up 9% on the same period last year.

“Because of the scale of our company, the depth of our offering and the ability to really have very, very meaningful relationships in terms of impact with those customers, they want to spend more time with us and that creates new opportunities,” said Casper. “And we’re seeing great momentum across the customer base from that perspective.”