MilliporeSigma: Thermo Fisher’s Qiagen buy ‘no threat’ to bioprocess landscape

Merck KGaA says bioprocess M&A is significantly different than in the pharma world and sees no challenge to its MilliporeSigma division from Thermo Fisher’s recent acquisitions.

Last week, bioprocess vendor Thermo Fisher agreed to buy Qiagen for $11.5 billion (€10.1 billion). The deal will bolster Thermo Fisher’s diagnostics business and add sample preparation, assay development and bioinformatics capabilities to its genetic analysis and biosciences capabilities.

It is also the latest billion-dollar plus deal for Thermo Fisher, which has in recent years bought Brammer Bio for $1.7 billion, Patheon for $7.2 billion, Life Technologies for $15.8 billion, FEI Company for $4.2 billion, as well as numerous smaller deals such as BD’s Advanced Bioprocessing business, and Finesse Solutions.

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The bioprocess space is in many senses an oligopoly, with the lion’s share of services and revenues being held by a handful of players: Thermo Fisher, Danaher, GE Healthcare (until its imminent takeover by Danaher), Sartorius, and MilliporeSigma.

Thus, on a Q4 2019 earnings call last week, Stefan Oschmann, CEO of Germany’s Merck KGaA – the parent company of MilliporeSigma – was asked how Thermo Fisher’s latest acquisition affects the life sciences space.

“The innovation model in the life science industry is somewhat different compared to the pharma industry, where there’s a lot more M&A ongoing,” he told investors, explaining that the bioprocess space being so consolidated more often involves bolt-on deals.

“We are never happy with where we stand with our businesses. We always want to improve. However, we do not perceive this move to be a strategic challenge to our business model.”

He cited MilliporeSigma’s strategy regarding future investments and named last year’s acquisition of acoustic cell processing platform firm FloDesign Sonics as an example.

“With the bolt-on acquisitions of FloDesign, we will be the first to use acoustic technology in cell therapy manufacturing,” he told stakeholders.

“There are exciting growth opportunities in gene therapy, in CAR-T. There are many areas in which we need to invest. And we assume that we are coming close to a somewhat optimal balance in terms of delivering earnings versus investing versus investing in the future.”

For the full year 2019, Merck’s life sciences business (which includes MilliporeSigma) pulled in €6.9 billion, up from €6.2 billion the year prior. The Process Solutions unit obtained double-digit year-on-year growth due to strong demand for bioprocessing.