Thermo Fisher will invest $82.5 million in a Missouri drug substance facility run by its CDMO division Patheon. The expansion forms part of a three-year capital expenditure plan across its biopharma services divisions.
News came in this week that life sciences firm Thermo Fisher Scientific has committed to plans to expand operations and create 169 new jobs at its Berkeley biologic drug substance manufacturing facility in St Louis, run by its contract development and manufacturing organization (CDMO) business Patheon.
The 58,000 square-foot expansion will add two manufacturing suites with around $15 million in new manufacturing machinery and equipment over a two-year period, and increase production scales available to its customers from the facility to 5,000 L.
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The Missouri site investment signals the latest in a long list of expansion programs underway at Thermo Fisher.
This month alone, the firm announced separate investments of $154 million in its Greenville, North Carolina fill-finish facility and $100 million in Nashville, Tennessee to expand capacity for its single-use technologies.
And before that, the firm has shouted from the rafters about a $600 million capital expenditure (CAPEX) plan for 2021, a $700 million CAPEX plan for 2020, and various other expansion projects across its network tied to increased demand driven by the COVID-19 pandemic and the continual robustness of the pharma and biopharma space.
CAPEX broken down
While media reports and the PR machine makes it easy to get bogged down with numbers, for clarity on Thermo Fisher’s CAPEX strategy going forward we can turn to the firm’s investor day held earlier this month.
From 2020 to 2022, the firm says its total CAPEX will sit at $4.3 billion across its Biosciences, BioProduction, and Pharma Services businesses. Specifically:
The BioProduction unit, which includes cell culture, single use technology, and purification platforms and equipment, has $1 billion tied to it to help the firm alleviate “significant capacity constraints†across the industry.
Expansions at around a dozen sites – including Singapore, Bedford (Massachusetts), Innchinnan (UK), and the aforementioned Nashville site – intend to more than double the firm’s single-use technology capacity, more than triple capacity for purification resins, and more than double cell culture capabilities.
For Pharma Services, $2.1 billion has been allocated to more than double capacity for both biologics drug substance and sterile fill-finish, with the firm’s Hangzhou, China plant being one of eight sites marked for expansion. Others include the Missouri and Greenville plants.
A further $1.2 billion will be used to support new capabilities that enable advanced therapies, the firm says. Explicitly, investments are being made in Vilnius, Lithuania, and Austin, Texas to support nucleotides and enzymes for vaccine manufacturers, and plans are underway to establish new capabilities in cell therapy, viral vector/gene therapy, plasmid, and mRNA manufacturing in Plainville, Massachusetts and Carlsbad, California.
2021 Guidance
The firm also gave revenue guidance, with management expecting $35.9 billion for 2021 – up 8% from $32.2 billion last year.
This is broken down to $31 billion from core revenue – defined as the revenue from the ongoing business and includes vaccine and therapy related response revenue, which is expected to convert to non-COVID-19 customer revenue over time – and $4.9 billion from testing response revenue, the majority of which is expected to ramp down as the pandemic comes to an end.