Thermo Fisher Acquires PPD for $17.4 Billion
Marc Casper, Thermo Fisher’s chairman, president and CEO, said the acquisition of PPD is a natural extension for the company. PPD will add a proven drug development platform, patient recruitment capabilities and laboratory services to Thermo Fisher’s offering. The company has been supporting Moderna in its mRNA therapeutics, including its Covid-19 vaccine trials.
Daniel Arias, an analyst at investment bank Stifel, said PPD is a "good strategic fit" for Thermo Fisher, given the increasing demand for services provided by contract research organizations.
Thermo Fisher said the transaction will be “immediately and significantly” accretive. It also expects to realize total synergies of roughly $125 million by year three after closing. These will consist of approximately $75 million of cost synergies and about $50 million of adjusted operating income benefit from revenue-related synergies.
The US company has previously boosted its pharma services business with the acquisitions of Brammer Bio, a manufacturer of viral vectors for gene and cell therapies, in May 2019 and CDMO Patheon in August 2017. However, Thermo Fisher lost out last year on buying molecular diagnostics company Qiagen. After initially offering $11.5 billion, it raised its bid by $1 billion, but not enough Qiagen shareholders tendered their shares, forcing to abandon the move.
Author: Elaine Burridge, Freelance Journalist