Pharma Focus Asia

Thermo Fisher Scientific Said in Talks to Acquire Patheon

Monday, May 15, 2017

Thermo Fisher Scientific Inc., the manufacturer of diagnostic and testing equipment, is in talks to buy Dutch drug-ingredient maker Patheon NV, according to people with knowledge of the matter.

An agreement could be reached as early as this week, the people said, asking not to be identified because the information is private. Thermo Fisher has a market value of about $67 billion in New York, while Patheon is worth about $3.8 billion based on its current share price.

Talks could still falter, and there’s no certainty a deal will be reached, the people said. Thermo Fisher and Patheon couldn’t immediately be reached for comment.

Purchasing Patheon would add to the $5.9 billion in acquisitions announced by Thermo Fisher over the past three years, according to data compiled by Bloomberg. Last year, the Waltham, Massachusetts-based company bought electron microscope maker FEI Co. for more than $4 billion to beef up its suite of testing and technology services.

M&A Expansion

Thermo Fisher, led by Chief Executive Officer Marc Casper, in January reported fourth-quarter profit that beat estimates and a 2017 earnings forecast that topped some projections, helped by recent acquisitions.

Last year, Thermo Fisher bought Affymetrix Inc. to add technology used by researchers to study specimens at the cellular and genetic level. It bought DNA sequencer Life Technologies Corp. for more than $13 billion in 2014.

Patheon is a contract drug manufacturer and researcher that boasts capabilities in some of the more complex and harder to produce types of medicines, including biological therapies which must be grown out of living cells, according to its website.

Complex medicines are increasingly important to generic drugmakers facing intense competitive pressure in simpler formulations. Meanwhile, innovative companies that have pioneered biological therapies are increasingly turning to contractors to help manage costs or make production more efficient.

Patheon has risen 24 percent in New York trading since an initial public offering last year, which raised about $719 million, according to data compiled by Bloomberg. The company, backed by JLL Partners, said in March it expects adjusted earnings before interest, taxes, depreciation and amortization for the current financial year to be in the range of $430 million to $450 million, trailing analyst estimates.

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