Thermo Fisher: $17.4b PPD buy ‘natural extension’ for pharma
In mid-April, laboratory technology specialist Thermo Fisher Scientific announced its acquisition of global contract research organization (CRO) PPD in a deal valued at $17.4b USD. Marc Casper—chairman, president, and CEO of Thermo Fisher—addressed the reasons for the significant purchase, how company leaders expect the move to benefit customers, and what lies ahead for the two firms.
On PPD’s technical offerings and capabilities:
"PPD has invested significantly in its capabilities and is a leading global player, providing services to both emerging biotech customers and to all of the top pharma customers around the world. Generating $4.7b in fiscal year 2020 in terms of revenue, with a 15% adjusted operating margin, PPD offers customers both clinical development and laboratory services."
"In clinical development, PPD offers full-service clinical trials management services, which include trial feasibility, investigator recruitment, clinical trial monitoring, project management, and biostatistical services. This segment makes up 81% of their total revenue. Their laboratory services segment offers highly specialized lab capabilities to support clinical trials."
"PPD has an excellent reputation for quality and innovation. It's also worth adding that PPD has established an impressive network of capabilities around the world. This has allowed it to build a strong global business with 165 facilities in almost 50 countries in which they operate, and like us, the PPD team is intensely focused on customer needs. In the last five years alone, their team has supported more than 400 drug approvals."
On complementary corporate cultures
"Both companies have complementary mission-driven cultures, and I can't wait to welcome PPD's colleagues from around the world to Thermo Fisher once the transaction is completed. Like us, PPD prides itself on deep industry relationships and its reputation for quality and service."
On future branding plans
"We expect the transaction to close by the end of 2021, at which point, PPD will become part of Thermo Fisher's Laboratory Products and Services segment. Leading up to close, we'll be preparing for the integration of PPD into our company, following our proven integration planning strategy to facilitate a smooth and seamless transition."
On the acquisition’s timing
"Over time, a couple of things have changed that make it just an incredibly compelling combination and move for Thermo Fisher Scientific. The first thing is as our portfolio of capabilities has expanded over the last decade, our customers really have incredibly deep relationships with us. The world is very different five years later about how our customers perceive us based on that track record of really delivering day in and day out for more than a decade and serving them."
"The second thing that's happened and is COVID-related, customers are rethinking who let them down and who did a good job in supporting them on the important work they're doing. And that's for every industry."
"If you go through the pharma and biotech, if I synthesize that, they're looking for the companies that really stepped up and could navigate all of the complexities that COVID brought, and Thermo Fisher Scientific did an incredibly strong job in supporting all aspects of the important work they're doing, everything from keeping their facilities open to making sure that they're developing cutting-edge medicines."
"If you look at PPD's performance during the course of COVID, they did a really exceptional job of ensuring that clinical trials continued on, and that combination is super compelling in a world where customers want to make sure that they're consolidating their activities with fewer and trusted suppliers."
