Notes on Thermo Fisher ScientificThermo is listed on the NY...

Notes on Thermo Fisher Scientific

Thermo is listed on the NY Stock Exchange (since 1980) and has gained 18% this year. (NYSE:TMO) It is the largest maker of laboratory instruments and has annual sales of $11 B, 37 000 employees and operates in 150 countries. This is some partner.

A few weeks ago (May 2011) Thermo purchased for $3.5 B cash the Swedish company Phadia which specialises in testing for allergies and autoimmune diseases. This follows the acquisition of Dionex Corp., a maker of chemical analysis products, in December for $2.1 B.

Thermo seems to be in process of expanding its diagnostic line of business, and guess what NSP is also doing?

Thermo operates on large scale and clearly know their business very well so that I doubt they would be interested in trifling with small quantities of product. NSP?s intention is to address directly the 90% of the gel market previously exclusively held by Bio-Rad and Invitrogen cassettes. (It required only a change in the geometry for the NSP gel cassettes to fit those established lab tanks.) The added benefits of nUView gels should make inroads into that market.

Presumably Thermo will expect a hefty margin but sales quantities should give NSP a significant return. What proportion of all sales will come through Thermo?

Having a colossus like Thermo Fisher as a distribution partner may later produce its own problems but no doubt management is aware of the risks. Certainly any takeover could only occur on management's conditions.

From time to time NSP refer to Pierce as being a US distributor but it should be noted that Pierce Protein Research Products is also a division of Thermo Fisher.

The oddity is that Thermo together with Expedeon was being sued by NSP for IP infringement over the last six months. Perhaps the Thermo sales contract represents a settlement in lieu of litigation?

Juke