Thermo Fisher Scientific Morgan Stanley 24th Annual Global Healthcare Conference

Kallum, thanks for having us, and I'm joined today with two colleagues from Thermo Fisher Scientific, Raf Tejada, who's responsible for investor relations, and Sandy Pound, our chief communications officer. When I think about 2026, it's setting up to be really an outstanding year. It is a combination of improving end markets in the direction that we've expected to see that progression and very strong operational performance by the company. As we exited the second quarter, it was good to be back to 5% organic growth, and we grew our EPS by 13% in the quarter. We're able to raise our outlook for the full year and now expect our organic growth to be about 4% this year.

Actually progressing nicely in that range that we said it would happen, getting to a period over this year and next, range from 3%-6%, and you're seeing it progress higher in the range. I'm sure we'll delve into a lot of the different details, but if I'd say one of the things as I reflect on the first quarter or the first half of the year, I should say, is the strength of the customer relationships that we've built is really paying off in a really strong way. The acquisitions that we've done are performing well because customers want to adopt the technologies that we've added. It's a super exciting time in our industry and an even more exciting time at Thermo Fisher Scientific.

Yeah. So when I think about Pharma Services and biotech, it's the largest customer set that we serve. It's about 60% of our revenue. We grew mid-single digits in the quarter, and that Q2 has followed the progression that we've now seen for several quarters, which each quarter is actually a little bit stronger in terms of the organic growth versus the prior quarter. So you're seeing it strengthening. The business is performing in a logical fashion. So, what we're seeing is the pharmaceutical customers are quite positive. They're building their pipelines. They're excited about the science that's happening now, and the understanding that they have the benefits of AI to drive stronger impact on the returns within drug development, and that is definitely fueling an investment cycle.

At the same point in time, you're seeing biotech also in a much better part of the cycle simply because funding is improving, the confidence has been improving, and you're seeing the spending. We saw broad strength. When I think about Q2, you saw strength in clinical research, you saw strength in our research and safety market channel. You saw very strong performance in bioproduction, all driving very positive growth.

Yeah. As our investors know, we spend an enormous amount of time as a management team with our customers, and if I think about in 2025, a lot of what the commentary you heard from us was the tone, the sentiment is improving. Even though funding wasn't super strong, it was improving. But the confidence from our customers in the emerging biotech companies really was picking up. You saw funding start to improve as 2025 progressed. Has stepped up even further in 2026. The M&A that's happened in the industry has fueled an investment cycle from VC. You've seen IPOs. You're seeing a much healthier end market, and that sentiment has now translated into spending, right? It follows a logical pattern, right? Usually when funding happens, it usually takes 2 to 3 quarters, depending on the business, for that funding to flow.

Funding typically will first go into clinical research because that's ultimately how you get to your next milestone in terms of the next funding round. You've seen that in very strong authorizations growth in our clinical research business. You've also seen it in the strong revenue growth that we've been delivering. Now what you're starting to see as it progresses, as those companies are now working on, how do they refill their research pipelines? You're starting to see that growth pick up first in our research and safety market channel, Fisher Scientific. That's the next natural thing to happen. You're starting to see lab spend go up. Then the next step you would see is kind of the high-tech reagent business would be the next part of the progression that you would expect to strengthen over the next couple of quarters.

Yeah. So when you think about a significant event from a new approach for therapy, it spurs a huge amount of interest, right? In a certain respect, it is less about the Moderna and Merck specific spending and two important customers, but more about the interest in the area, which then spurs a reinvestment cycle. If you think about, really it is a therapy. Less of the marketing, but effectively, it is to address an individual's specific cancer, and it really is very exciting. What ultimately will be is that it will benefit patients, and that will then see capital flow to support that area, just like it has in ADCs and some of the other areas that maybe 2 or 3 or 4 years ago, the industry was talking about being a positive. This is yet another leg to drive growth in the industry.