Thermo sees ‘very, very’ significant cold-chain demand as COVID-19 vaccines enter endgame
The COVID-19 vaccines in late-phase clinical development need to be shipped and stored in a diverse range of conditions. Some vaccines can tolerate being refrigerated at 2°C, while others need to be frozen at -20°C or kept at ultra-cold temperatures in the -60°C to -80°C range.
Keeping vaccines at the required temperatures will be critical given the harm that could be caused by the loss of products, demand for which will initially far outstrip supply, and the use of prophylactics that have deteriorated to the point they are less effective. Thermo Fisher’s cold storage business is benefiting from the ramping up of preparations to ship COVID-19 vaccines commercially.
“We're getting very, very significant demand for those products,” Thermo Fisher CEO Marc Casper said on a third quarter results conference call with investors.
The rising demand for Thermo Fisher’s cold storage range is part of a broader uptick in interest in its portfolio of products and services relevant to the development and production of COVID-19 drugs and vaccines.
To date, Thermo Fisher’s diagnostic unit has been the main beneficiary of the outbreak, bringing in the majority of the US$2bn in COVID-19 revenues the company generated in the third quarter. Now though, with more drugs and vaccines nearing approval, the makeup of Thermo Fisher’s COVID-19 sales is starting to diversify.
“Bioproduction, our pharma services business, our biosciences nucleotide, that's all building. That's better than three or four weeks ago. These things are very long cycles. We're moving at a much faster pace, but it takes a while for these products to get through the clinical process with approvals. So, we see that building, and that's good for us in terms of what the outlook is,” Casper said.
Pandemic response
Thermo Fisher is investing to support the response to the pandemic. Casper said Thermo Fisher has committed more than US$700m in capital expenditures, almost as much as it invests on all areas in a typical year, to meet demand related to COVID-19.
Products for use in the response to COVID-19 will occupy the capacity initially but, as Casper said, “at some point the therapies and vaccines related to pandemic will unwind.” Thermo Fisher is making the investments in a belief it will be able to fill the capacity with other products as the pandemic abates.
Casper said that process is already underway, with large customers making commitments to use sterile fill and finish capacity once it is no longer needed by products related to the pandemic. Ashtyn Evans, senior analyst, health care at Edward Jones, sees the investments yielding lasting benefits.
“The company is adding significant capacity in biosciences, bioproduction and pharma services, which positions them well for the long term,” Evans told this publication.
Thermo Fisher’s share price has risen almost 50% this year to hit an all-time high.
