Thermo Fisher hails PPD’s wins of ‘very large’ customers following merger
In December, Thermo Fisher closed its largest deal to date, paying $17.4bn to acquire contract research organization PPD. Evidence that the combined company was off to a fast start emerged in July, when Thermo Fisher increased its PPD revenue forecast for 2022 to $6.8bn.
Casper, the CEO of Thermo Fisher, provided more details on why PPD is outperforming expectations at the Morgan Stanley 20th Annual Global Healthcare Conference, explaining how the clinical research unit is benefiting from being part of the broader business.
“When I think about the early days of the acquisition, customers that have been long-standing Thermo Fisher Scientific customers, that might have used PPD in a more sparing way, have given us the opportunity to work with them. So, we’ve won a meaningful number of new customers, some very large ones. And now it’s our job to really exceed expectations,” said Casper.
Thermo Fisher raised its synergy forecast for the PPD merger six months after closing the takeover. The updated outlook added $100m to the revenue synergy in year three, bringing the total up to $250m, and raised the cost synergy from $25m to $100m.
Casper used the investor conference to shed light on the early synergies that the team has identified, zeroing in on an interface between PPD’s clinical trials and the broader business as a notable win so far.
“The first real synergy area that’s been exciting ... has been in our clinical trials packaging business, where we’re effectively securing the drug supply and packaging and labeling it, securing comparative drugs, things of that sort, blinding them. We’ve had a number of wins where effectively it’s enabling the physical aspect of a clinical trial in addition to all of the paperwork and all the administration of the clinical trials,” said Casper.