Thermo Fisher Sees Stronger Demand, Calls 2026 an ‘Outstanding Year’

Key Points

• Thermo Fisher raised its outlook after returning to 5% organic growth in the second quarter, with adjusted EPS up 13%. CEO Marc Casper expects about 4% organic growth in 2026 and called it an “outstanding year,” citing orders running ahead of revenue.
• Pharma and biotech demand is strengthening as customers invest in drug-development pipelines, AI, and emerging therapies. Recovering biotech funding, mergers and acquisitions, and IPO activity are also supporting spending across clinical research, laboratory supplies, and bioproduction.
• U.S. pharmaceutical reshoring could provide additional growth through 2028 via domestic CDMO contracts, expansions of existing facilities, and new manufacturing plants. Thermo Fisher also sees longer-term support from stabilizing academic markets, improving China demand, and continued investment in clinical research and bioproduction.

Thermo Fisher Scientific NYSE: TMO Chairman and Chief Executive Officer Marc Casper said the company is seeing improving demand across several end markets and expects 2026 to be an “outstanding year,” supported by stronger customer activity and operational execution.

Speaking at Morgan Stanley’s Global Healthcare Conference, Casper said Thermo Fisher returned to 5% organic growth in the second quarter, its strongest organic growth rate since 2021, while adjusted earnings per share increased 13% in the quarter. The company raised its full-year outlook and now expects approximately 4% organic growth for 2026.

“We are seeing our orders running ahead of revenue, so that bodes well for the future,” Casper said. He added that Thermo Fisher expects roughly 4% organic growth in both the third and fourth quarters and said the company is confident in its full-year outlook.

Pharma and Biotech Demand Strengthens

Pharma and biotech, which account for about 60% of Thermo Fisher’s revenue, grew at a mid-single-digit rate in the second quarter, according to Casper. He said pharmaceutical customers are investing in their pipelines and increasingly view artificial intelligence as a tool to improve returns in drug development.

Biotechnology demand is also improving as funding conditions recover. Casper said increased venture capital investment, industry mergers and acquisitions, and IPO activity have contributed to healthier customer sentiment and spending.

Thermo Fisher saw broad strength in clinical research, its Fisher Scientific research and safety market channel, and bioproduction. Casper said biotech funding typically takes two to three quarters to translate into revenue, with initial spending commonly directed toward clinical research before moving into laboratory supplies and, later, high-technology reagents.

Casper also pointed to increased interest in personalized mRNA cancer vaccines following recent clinical data in the field. While he said the significance extends beyond spending by any individual customer, he expects promising new therapeutic approaches to encourage further investment across the industry.

Reshoring Could Support Growth Through 2028

Casper said efforts to shift pharmaceutical production to the United States could provide a one-time growth benefit over the next several years. He described three stages of the trend:

• U.S. CDMO contracts: Customers can commit to domestic production through contract development and manufacturing organizations without building new plants. Casper said Thermo Fisher has secured several large contracts in this area.
• Expansion of existing sites: Companies moving production into existing U.S. facilities may purchase equipment and lab supplies, with activity expected to increase more meaningfully in 2027.
• New greenfield facilities: New manufacturing sites could generate equipment, laboratory and inventory demand primarily in 2027 and 2028.

Casper said President Donald Trump visited Thermo Fisher’s oral solid dose CDMO facility in Cincinnati in March. He characterized reshoring as additive to the company’s growth outlook, though he noted that it is ultimately a one-time benefit because the overall volume of medicines produced does not change.

Academic, Industrial and China Trends

Thermo Fisher’s academic and government business returned to low-single-digit growth in the second quarter. Europe posted strong growth, while the U.S. returned to slightly positive growth. China remained a headwind in academic spending, Casper said, as government spending has been restrained.

He said the academic and government market is stabilizing but remains muted, with customer caution in the U.S. tied to uncertainty surrounding potential policy changes. Thermo Fisher expects the market to continue progressing and return to growth in 2027.

Industrial and applied markets, which represent about 15% of company revenue, delivered mid-single-digit growth in the second quarter. Casper cited strong electron microscopy performance, a return to growth in chemical analysis, and strength in the research and safety market channel.

Demand for electron microscopy is being supported by semiconductor customers, according to Casper. He said Thermo Fisher’s instruments are used in chip development and production yield improvement, while orders in the business are “far outstripping revenue,” providing support for future growth.

Following two visits to China in 2026, Casper said he came away more optimistic about the market’s longer-term prospects. Thermo Fisher’s China business returned to growth in the second quarter, aided by investment from China’s innovative biotech sector in research and development. He said China could eventually grow at or above the company average, though academic and government spending is likely to remain challenged until fiscal policy changes.

Portfolio Investments and Longer-Term Outlook

Casper highlighted continued growth in bioproduction, where Thermo Fisher has gained share through cell culture media, single-use technologies and its DynaDrive bioreactor platform. The company’s filtration business acquired from Solventum is off to a good start, he said, and is expected to grow at a mid- to high-single-digit rate.

In clinical research, Casper said authorizations, or new business wins, are growing well ahead of revenue. He said the company is using AI and its accelerated drug development capabilities to help customers reduce clinical development timelines.

Thermo Fisher also completed its $9 billion acquisition of Clario in March. Casper said Clario provides technology for generating and managing clinical-trial endpoints and will be combined with Thermo Fisher’s central laboratory capabilities to support sponsors, clinical research organizations and research sites.

During the year, Thermo Fisher has deployed $9 billion toward acquisitions, repurchased $4 billion of shares, raised its dividend by 10%, and divested its microbiology business, which closed in August, Casper said.

Looking beyond 2026, Casper reiterated Thermo Fisher’s expectation for 3% to 6% organic growth over the medium term and growth in the 7% range beginning in 2028. He cited stabilization in academic markets, improving biotech funding and potential upside from China as key drivers. He also said AI should serve as an industry growth accelerator by improving drug-development returns and encouraging customers to pursue more research programs and clinical indications.

About Thermo Fisher Scientific (NYSE:TMO)

Thermo Fisher Scientific Inc is a global supplier of scientific equipment, laboratory services and analytical technologies. The company serves pharmaceutical and biotechnology companies, clinical laboratories, academic and government institutions, industrial businesses and other research organizations.

Its products and services include laboratory instruments, analytical systems, reagents, consumables, software and related services. Thermo Fisher also provides laboratory supplies and equipment, bioproduction solutions, genetic analysis technologies, clinical diagnostics, specialty diagnostic products and contract research and manufacturing services through its laboratory services businesses.

The company was formed in 2006 through the merger of Thermo Electron Corporation and Fisher Scientific International.

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