Thermo Fisher Scientific Inc. (TMO) Wolfe 2024 Healthcare Conference (Transcript)

Key Points Industry and Company Overview 1. Industry Leader: Thermo Fisher Scientific is a global leader in life science tools and diagnostics, often considered the industry's state of the state [4]. 2. Market Conditions: The industry experienced improving market conditions throughout the year, with businesses and end markets being predictable [6]. 3. Share Gain Momentum: Despite market volatility, Thermo Fisher has continued to gain market share and raise EPS consistently [6]. Election and Industry Impact 1. Rebalancing of Portfolios: The election and uncertainty around HHS policy led to a rebalancing of portfolios outside of the space [16]. 2. Business-Friendly Administration: A more business-friendly administration is expected to benefit the industry and Thermo Fisher's business [17]. 3. NIH Exposure: Thermo Fisher has a low exposure to NIH funding, with approximately 7-8% of revenue indirectly affected [24]. Pharma and Biotech 1. Market Improvement: Pharma and biotech markets are slowly improving, with activity picking up and pipelines strengthening [47]. 2. Investment in R&D: Thermo Fisher has continued to invest heavily in R&D, leading to the launch of innovative products like the Astral mass spectrometer [52]. 3. Share Gain: Thermo Fisher has gained share in the analytical instruments segment, particularly in areas like cryo EM and separation analysis [51]. M&A and Capital Deployment 1. M&A Environment: Thermo Fisher is optimistic about the M&A environment, with more unknowns creating opportunities for transactions [38]. 2. Capital Deployment: Thermo Fisher has a long-standing capital deployment strategy, with approximately 1/3 of deployed capital allocated to share buybacks and dividends [43]. 3. Recent Buyback: Thermo Fisher authorized a $4 billion share buyback in September 2024 [43]. 2025 Outlook 1. Pandemic-Related Activity: The headwind of pandemic-related activity will be significantly reduced in 2025 [64]. 2. Share Gain Momentum: Thermo Fisher expects to maintain strong share gain momentum in 2025, driven by new contracts and a better track record of navigating volatility [68]. 3. Long-Term Misconceptions: The biggest misconception is that Thermo Fisher cannot consistently grow share, despite its clear strategy and strong earnings growth [70].