Thermo Fisher remains optimistic about 2025 amid uncertainty in Trump policies
Thermo Fisher Scientific CEO Marc Casper on Monday told the TD Cowen Annual Health Care Conference that February was a “very volatile” month in terms of “headline risk” — which he described as “quite overwhelming” on a daily news basis, given the current uncertainty in the U.S. and abroad. Still, Casper contends the company is “well positioned” to navigate the geopolitical environment and “feels good” about its 2025 outlook.
“Sometimes it’s good to put the paper away — which I did this morning — or turn off the phone because there’s a lot of volatility out there that just has to be thought through, but nonetheless we’re in a great position,” Casper said.
Casper remains optimistic that Thermo Fisher will achieve single-digit market growth this year. Asked about the impact of the Trump administration’s potential tariffs as well as funding cuts and freezes to the National Institutes of Health (NIH), he said “we’re in a period of time in the U.S. that is trying to be more business friendly and trying to put the economy on a long-term sustainable path.”
From a macroeconomic perspective, Casper argues that Trump’s policies are “quite different” with “likely less regulation” than those supported by the Biden administration, which he contends “creates confidence” in the business environment.
However, data and analytics firm GlobalData last week issued a report warning that Trump’s NIH funding cuts and freezes could hamper U.S. biotech drug development and innovation, as the agency is the largest funder of biomedical research globally and provides federal government funding to early-stage businesses.
“Trump’s recent federal funding cuts and freezes could stifle innovation by creating cash flow challenges for biotech companies that rely on government grants, which could delay or halt global biopharmaceutical R&D and drug approvals, limiting patient access to essential treatments,” GlobalData analyst Alison Labya said in a statement.
Still, Casper downplayed the impact of Trump’s NIH funding cuts and freezes on Thermo Fisher’s business, with low single digits of the company’s revenue projected to be potentially impacted, while noting that the executive orders are on hold as they are currently being challenged in the courts.
“With any change there’s always opportunity,” Casper said, adding it’s an area “where we’ll help our customers navigate that and we’ll also educate the administration on the importance of the academic markets.”
Tariffs and M&A
When it comes to Trump’s potential tariffs, Casper said Thermo Fisher “doesn’t export much out of China” and the impact of tariffs on Canada would not be significant. At the same time, he noted that the “devil is in the details” in terms of tariffs on Mexico as the company has one plant in that country that is a “sister facility to U.S. capacity” with options for managing the situation.
Casper added that reciprocal tariffs might have more of an impact on Thermo Fisher. “We really don’t know that the first wave of reciprocal actions will have much effect on us, but we’ll see how that plays out,” he said.
During Thermo Fisher’s fourth-quarter 2024 earnings call in late January, Casper said it’s “our job” to “work collaboratively with the administration.” The CEO also told analysts he is “excited” that “from an M&A perspective” in a second Trump term “we’re likely to see a much more reasonable environment from a regulatory perspective.”
Last week, Thermo Fisher announced it is paying $4.1 billion in cash to buy Solventum’s purification and filtration business, whose technologies are used in the production of biologics as well as medical technologies and industrial applications.
The purification and filtration business, which generated approximately $1 billion of revenue in 2024 for Solventum, is highly complementary to Thermo Fisher’s bioproduction business and strengthens its offering in the high growth bioprocessing market, according to Casper.
At the same time, Casper noted that the contract research organization (CRO) industry “lags the upturn that you see in some of the other segments — bioproduction, some of the research tools — so you’ll see lower growth in the first part of 2025” but he assured that the CRO business will improve as the year progresses.
When it comes to its contract development and manufacturing organization (CDMO) business, Casper expects Thermo Fisher to benefit from Novo Holdings’ recently completed $16.5 billion acquisition of CDMO Catalent, which he said has taken sterile fill-finish capacity out of the market with the related $11 billion sale of Catalent’s three sites to Novo Nordisk.
“That bodes really well [for Thermo Fisher] because it takes a node out of the capacity of the industry, and we’ll be well positioned to serve our customer demand because of that,” Casper said.