Thermo Fisher Steps into Genomics

02/14/2014 7:00 am EST

Focus: STOCKS

Stephen Leeb

Founder and Research Chairman, Leeb Group

The latest addition to our Growth Portfolio is the world's largest manufacturer of equipment essential to biological companies, from drug makers to genetic engineering firms, explains Stephen Leeb, editor of The Complete Investor.

Thermo Fisher Scientific (TMO) has a 16% share of this massive market, which is conservatively estimated at $75 billion.

In 2014's first quarter, the company will complete its acquisition of biotech company Life Technologies. This will make Thermo Fisher the leading genomics company.

It also will expand the company's footprint in Asia, the world's fastest-growing biotech market. The seven countries with the fastest-growing biomedical research budgets are all Asian. Any life science company that hopes to maintain double-digit growth will need to succeed in Asian markets.

Over the past five years, Thermo Fisher's research spending has grown at a double-digit clip and produced a broad range of products, including ones in the rapidly-growing handheld-product market.

Examples are a handheld instrument to identify narcotics and an instrument that identifies asbestos embedded in various materials.

As a major outsourced company in biotech, which is healthcare's fastest-growing segment, Thermo Fisher is squarely in the rarefied ranks of companies that promote better health in a cost-effective way.

Products differentiated by genomes—i.e., medicines tailored to an individual's unique genetic makeup—are slated to become an important path to cost savings. As the leading supplier of DNA-sequencing equipment, Thermo Fisher will be a major player in this area.

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