The medical device maker has been dropping money like rain this spring, spending close to $19 billion in acquisitions over the past four months.
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Thermo Fisher Scientific is buying clinical research services provider PPD Inc. for a hearty $17.4 billion, and that’s not its only acquisition this year.
The medical device maker has been dropping money like rain this spring, spending close to $19 billion in acquisitions over the past four months. This week’s CRO acquisition announcement adds more meat to its pharmaceutical services business.
PPD operates in close to 50 countries with over 26,000 staff offering a broad range of research and lab services to accelerate drug productivity. The Wilmington-based CRO was the chosen partner of Moderna in testing its COVID-19 vaccine authorized by the FDA for emergency use in December. Moderna called PPD’s services “essential to the successful execution of the COVE study.”
“Pharma and Biotech is our largest and fastest growing end market, and our customers value us as a strategic partner and an industry leader. The acquisition of PPD is a natural extension for Thermo Fisher,” said Marc N. Casper, chairman, president and chief executive officer of Thermo Fisher Scientific. “Longer term, we plan to continue to invest in and connect the capabilities across the combined company to further help our customers accelerate innovation and drive productivity, while driving further value for our shareholders.”
The value of CROs has certainly grown throughout a global pandemic. Drug-testing capabilities have been essential to quickly rolling out treatments and vaccines against the novel coronavirus, while companies continue pushing forward cutting-edge therapies for cancer and other disease.
“PPD is one of the largest contract research organizations, with scale in clinical, preclinical and central lab end-markets,” said Bloomberg health care analyst Jonathan Palmer. “The marriage of PPD with Thermo’s Patheon manufacturing unit would create a compelling end-to-end offering for biopharma customers, with compelling financial metrics.”
Last year, PPD generated revenues of $4.7 billion. In addition to Moderna, it also worked with Gilead on the studies done for remdesivir.
Thermo Fisher will seal the deal by paying $47.50 a share for a total price of $17.4 billion plus the assumption of $3.5 billion of net debt.
In January of this year, Thermo Fisher scooped up two new businesses. Mesa Biotech was bought out for $450 million in cash with another $100 million on the line if certain milestones are hit. This buy added a slew of rapid point-of-care testing platforms for infectious diseases including SARS-CoV-2, Influenza A and B, RSV and Strep A.
Just four days before that, Thermo Fisher announced the purchase of Henogen SA, Groupe Novasep SAS’s viral vector manufacturing business in Belgium. The over $868 million deal added to Thermo Fisher’s push into the gene and cell therapy space begun in 2019 with the $1.7 billion buy of Brammer Bio. The company also announced significant expansion of facilities in both the US and Europe, adding to its cell and gene therapy capabilities.
According to Bloomberg, health care deals are already at over $160 billion for the year, three times last year’s volume for the same time period.
