Thermo Fisher Sheds Businesses in Preparation for Life Technologies Buy

By Bio-IT World Staff

January 6, 2014 | Thermo Fisher Scientific today announced a $1.06 billion sale of multiple business units to GE Healthcare, as a condition of regulatory approval for Thermo Fisher's acquisition of Life Technologies. The businesses sold to General Electric's life sciences arm include Thermo Fisher's cell culture, gene modulation and magnetic beads units, which Thermo Fisher believes to have generated a combined $250 million in revenue over the past year. Goldman Sachs analysts said they do not expect the deal to have a major impact on Thermo Fisher's continued growth.

The divestiture has been expected since November, when Thermo Fisher announced that it had reached an agreement with the European Commission to approve the purchase of Life Technologies. If not for the sale announced today, that acquisition would have left Thermo Fisher with almost 50% of the cell culture market, a red flag for the regulatory body. In the U.S., FTC approval for the Life Technologies purchase is still pending, but Thermo Fisher has stated they do not expect the FTC to raise any additional hurdles.

In the genomics world, most of the buzz around the $13.6 billion acquisition of Life Technologies has focused on Life's Ion Torrent arm, the gene sequencing unit that has been making gains against market leader Illumina. Ion Torrent has been noted for its rapid development and heavy investments in R&D, including a yet-unreleased semiconductor chip for the Ion Proton sequencer that may make the instrument competitive in high-throughput sequencing with Illumina's HiSeq 2500. Thermo Fisher has the resources to pour even more funding into the Ion Torrent line, but it is unknown what the new parent company's intentions are for Life Technologies, which comes with a huge portfolio of biotechnology products, any number of which will fit into Thermo Fisher's existing pipelines in sample prep, synthetic biology, forensics and other research and clinical applications. Thermo Fisher is not known for its emphasis on R&D; in fact, in recent years, the smaller Life Technologies has occasionally outspent Thermo Fisher in this area.

Still, the willingness to cut loose profitable businesses may signal that Thermo Fisher has a more ambitious project in mind for Life Technologies, which is one of very few firmly established brands in the growing field of next-generation sequencing.