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How Innovation Is Driving Thermo Fisher Scientific’s Growth

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Overview

Since the company was formed in 2006 through the merger of Thermo Electron and Fisher Scientific, Thermo Fisher Scientific (TMO) has focused on innovation through organic as well as inorganic growth. The company has launched a large number of products over the years establishing some of the leading products and brands in the market.

Thermo Fisher Scientific now has more than 800,000 products in its portfolio and has an extensive product pipeline. The diagram below shows the company’s key product launches, global expansion initiatives, and mergers and acquisitions over the years.

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R&D strategy

Thermo Fisher Scientific spends approximately $700 million on R&D (research and development) per year. The company has the largest R&D budget in the industry as compared to its peers including Abbott Laboratories (ABT), Baxter (BAX), and Agilent Technologies (A). Notably, the iShares Russell 1000 Value ETF (IWD) has ~0.31% of its total holdings in Thermo Fisher Scientific.

Thermo Fisher directs the majority of its R&D investments toward its Life Sciences Solutions segment. The company employs around 4,000 R&D employees, and this high number has undoubtedly contributed to many breakthrough products in the industry.

The company also has a leading patent portfolio. The globally integrated team and cross-business projects help leverage the company’s scale and depth. Some of the company’s key products include microbiology media and real-time PCR (polymerase chain reaction), which is used to test for various pathogens, an X-ray detection system, a chemical oxygen demand analyzer for measuring water quality, next generation sequencing panels for testing inherited diseases, and a CytoScan Dx chip for discovering chromosome abnormalities.

In the next part, we’ll examine one of TMO’s key strategies.

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