Thermo Fisher Scientific, a diversified life science company, has announced its intent to purchase PPD, a Clinical Research Organization (CRO), for $17B. PPD is a publicly traded CRO and is the third largest CRO in terms of ongoing trials. PPD will be part of Thermo Fisher’s Laboratory Products and Services Segment, says GlobalData, a leading data and analytics company.

Peter Shapiro, Senior Director Drugs and Business Fundamentals at GlobalData comments: “While this acquisition has yet to be approved by regulators, Thermo was the most successful contract manufacturing organization (CMO) in manufacturing innovative drugs that were approved in 2020 and has recently benefited from COVID-19 vaccine and therapeutic manufacturing.”

According to Thermo CEO Marc Casper: “In 2020, this (pandemic) led to $500M in COVID-19 vaccine therapy revenue, and we expect that to increase to $1B in 2021. Our comprehensive response to the pandemic demonstrates the unique capabilities of Thermo Fisher Scientific.​”

Shapiro continues, “Thermo’s response to the pandemic includes Veklury (remdesivir), a therapeutic marketed by Gilead for COVID-19; a pipeline vaccine by Inovio Pharmaceuticals; and a pipeline therapeutic being developed by Humanigen. Additionally, PPD has been involved in running trials for COVID-19 vaccines including those sponsored by Johnson & Johnson, Moderna, Novavax, and Inovio Pharmaceuticals.”

Thermo Fisher owns several CMOs that are also part of its Laboratory Products and Services Segment, including Fisher Clinical Services. Thermo Fisher has also recently purchased Patheon in 2017 and Brammer Bio (now Patheon Viral Vectors) in 2019, which are also now part of this division.

The Patheon division of Thermo is a proponent of the one stop shop proposal. This would allow the company to benefit from all its manufacturing needs being supplied by the same service provider rather than hiring separate CMOs for API, dose, or packaging manufacturing.

Shapiro concludes, “This acquisition allows Thermo to expand its one stop shop to running clinical trials. This acquisition is the converse to a recent acquisition by prominent CRO, Charles River Laboratories, Inc., of Cognate BioServices, a prominent cell and gene therapy CMO, which helps Charles River to create an ‘end-to-end solution’ for cell and gene therapies.”