Thermo Fisher Scientific (TMO) Morgan Stanley 24th Annual Global Healthcare Conference summary

State of the business and financial performance

• Organic growth reached 5% in Q2, with EPS up 13%, leading to a raised full-year outlook of 4% organic growth, progressing within the 3%-6% range for 2026 and aiming for 7%+ by 2028.

• Strong customer relationships and successful acquisitions are driving adoption of new technologies and supporting growth.

• Orders are running ahead of revenue, indicating positive momentum into 2027.

• Capital deployment included $9B in M&A, $4B in share buybacks, a 10% dividend increase, and divestiture of the microbiology business.

• Confidence in achieving guidance is underpinned by execution against backlog and strengthening end markets.

End market trends and outlook

• Pharma and biotech, representing 60% of revenue, showed mid-single-digit growth, with improving funding and strong demand in clinical research and bioproduction.

• AI is fueling investment cycles in drug development, leading to increased parallel indications and high-throughput lab activity.

• Reshoring of pharmaceutical production to the U.S. is creating multi-year growth opportunities, with benefits expected to peak between 2027 and 2028.

• Academic and government markets stabilized with low single-digit growth in Q2, especially in Europe, while China remains a headwind but is showing signs of improvement.

• Industrial and applied markets delivered mid-single-digit growth, driven by electron microscopy and chemical analysis, with strong demand from the semiconductor sector.

Business segment highlights

• Bioproduction outperformed the market, driven by leadership in cell culture media, single-use technologies, and the integration of the Solventum filtration business.

• Pharma Services is expected to accelerate in the second half of 2026, supported by strong contract visibility and capacity expansion in sterile fill finish.

• Clinical research saw strong authorizations growth, with AI and the Clario acquisition enhancing capabilities and competitive positioning.

• New therapy modalities, such as personalized mRNA cancer vaccines, are spurring reinvestment cycles and industry growth.

• China’s innovative biotech sector is investing heavily in R&D, with business returning to growth and long-term prospects improving.