Thermo Fisher Scientific cited COVID-19 as a revenue driver in 2020 and predicted that pandemic-related work will make an even bigger contribution this year.

Thermo’s revenues grew 26% in 2020 to $32.2 billion with COVID-19 testing and vaccine and therapy-related development activity generating $6.6 billion.

The contribution from Thermo’s pharma and biotechnology business grew 25% in Q4 driven by increased demand for COVID-19 related bioproduction, pharma and bioscience services.

Image: iStock/Evgeny Gromov

Revenue from academic, government and industrial customers also increased as result of pandemic focused projects.

COVID-19 was also key to the performance of Thermo’s diagnostics and healthcare business. The firm said demand for PCR-based analysis, sample prep technology and transport media helped the unit increase revenue 200% in Q4.

CEO Mark Casper said the performance let Thermo “accelerate investments in our company to create an even brighter future with a focus on talent, R&D and new capabilities and capacity.”

He added that the “significant free cash flow” helped Thermo cut debt, pay dividends and “build a strong M&A pipeline.”

Drivers in 2021

Casper predicted that COVID-19-related work would continue to drive growth in 2021, citing customer relationships as critical.

“These customers engage with us on a significant number of projects to help, develop and produce vaccines and therapies. In 2020 this led to $500 million in COVID-19 vaccine therapy revenue and we expect that to increase to $1 billion in 2021.”

China will be a key market according to Casper, who said the decision to centralize single-use technology production in Suzhou is key. He also predicted the joint-venture biologics plant Thermo is building in Hangzhou would make a positive contribution.

Casper also said Thermo Fisher’s accord with CSL, the acquisition of Phitonex, the takeover of Novasep’s vector business and the planned purchase of diagnostics firm Mesa Biotech would be important in 2021.

Acquisitions

Analysts at Jefferies predicted Thermo Fisher would make more acquisitions this year.

They wrote in a note to investors that, “TMO’s M&A wallet is in the ~$25B range, which gives it a lot of flexibility to manage through any potential COVID earnings hole it may face in 2022.

“It is already putting some of this excess cash to work, including $1.5B of buybacks last month and ~$1.3B on two bolt-on deals.”