Thermo Fisher (TMO) Inks Deal to Develop Companion Diagnostics
Thermo Fisher Scientific TMO recently announced a collaboration with Bayer AG BAYRY to develop next-generation sequencing (NGS)-based companion diagnostic assays (CDx). However, the financial terms of the cooperation were not disclosed.
The partnership aims to help increase patient access to Bayer’s precision cancer therapies by offering decentralized genomic testing and rapid turnaround time. The latest development is also expected to boost Thermo Fisher’s clinical next-generation sequencing and oncology business.
News in Detail
Bayer’s core competencies lie in the life science fields of health care and nutrition. The company’s offerings are designed to help people and the planet thrive by supporting efforts to master the major challenges presented by a growing and aging global population. Through this partnership, Thermo Fisher complements Bayer’s commitment to developing new treatment options for patients with unmet medical needs, reducing exposure to treatments that are not as likely to provide benefit or can spare them unnecessary side effects.
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The CDx will be developed using Thermo Fisher’s Oncomine Dx Express Test on the Ion Torrent Genexus Dx System — a fully integrated NGS platform that can deliver results on a patient’s tumor or liquid biopsy sample in as little as 24 hours. Both are currently CE-IVD and are only available in countries that accept the CE mark.
Thermo Fisher aims to provide simple and fast NGS-based solutions using tumor and liquid biopsy samples that support future access to targeted therapies, thereby helping improve patient outcomes. The new collaboration leverages the combined expertise of both companies in developing distributable CDx tests.
Together with Thermo Fisher’s Genexus Dx System, which offers a revolutionary turnaround time, clinical teams are able to quickly gather results to better understand the impact of these therapies. Additionally, pairing this with Bayer’s growing precision oncology portfolio strongly positions the company to help ensure that eligible patients can be quickly matched with the right treatment.
Industry Prospects
According to a research report, the global CDx market was valued at $6.88 billion in 2022 and is likely to witness a CAGR of 12.4% in the 2023-2032 period.
Other Developments in Clinical Next-Generation Sequencing and Oncology
Thermo Fisher’s collaboration with leading pharma companies to jointly develop CDx tests underscores its commitment to patients to have immediate access to these targeted therapies upon approval.
Earlier in October 2023, the company partnered with Boehringer Ingelheim to develop CDx tests for identifying non-small cell lung cancer (NSCLC) patients in Japan and the United States with specific genomic mutations. The collaboration will leverage two CDx assays from Thermo Fisher to support Boehringer Ingelheim’s pipeline as they work to ensure the appropriate tests are available to match eligible patients with emerging targeted therapies.
Price Performance
In the past six months, TMO shares have rallied 15.5% compared with the industry’s rise of 17.6%.
Zacks Rank and Key Picks
Thermo Fisher currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Cardinal Health CAH and DaVita DVA. While Cardinal Health carries a Zacks Rank #2 (Buy), DaVita sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
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DVA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 35.57%. In the last reported quarter, it delivered an average earnings surprise of 22.22%.
Cardinal Health’s stock has surged 63.1% in the past year. Earnings estimates for Cardinal Health have risen from $7.23 to $7.28 in fiscal 2024 and from $7.98 to $8.04 in fiscal 2025 in the past 30 days.
CAH’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 15.6%. In the last reported quarter, it posted an earnings surprise of 16.67%.
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