Thermo Fisher Scientific is a US supplier of analytical instruments, life sciences solutions, specialist diagnostic, laboratory, pharmaceutical and biotechnology services. With a market cap of $192 billion, the Nasdaq-listed company’s share price closed at $497 on 12 December 2023.
Alex Stanić at Artemis Global Select fund, says: “The company is one of the largest providers of laboratory equipment, specialised instruments, diagnostic reagents, clinical trial services, and outsourced drug manufacturing services. This holistic offering serves as a great one-stop-shop for pharmaceutical clients and allows Thermo Fisher to retain its dominant position as a partner of choice for many customers.
“The business is exposed to secular growth in drug development spending by the pharmaceutical industry. Underpinning this growth is an ageing global population, improving access to healthcare, and consistent innovation, for example, the shift towards protein-based, that is, large molecule therapeutics.
“The wider life sciences industry remains fragmented, providing an attractive opportunity for large-scale players such as Thermo Fisher to acquire fast-growing and innovative early-stage businesses. The company has done this successfully for more than a decade, consistently adding value.
“Thermo Fisher’s share price has been weak in 2023, driven by post-covid inventory de-stocking, clients having over-ordered during the pandemic, weakness in China sales, cautious budgeting at large pharma clients, and tough funding conditions for early-stage bio-tech start-ups.
“We view these factors as transitory, and the stock therefore offers an attractive entry point for longer-term investors.”
