If the last year has taught diagnostic developers anything, it’s not to underestimate what Abbott CEO Robert Ford recently termed the “stickiness” of COVID-19 tests—even as case rates remain well below their peaks and testing requirements relax.
Major test makers have continued to rake in hundreds of millions of dollars in COVID test sales throughout 2022; in the last week alone, Quest Diagnostics reported slowing but still respectable third-quarter sales of $316 million, and Abbott easily toppled its own estimates with a whopping $1.7 billion in COVID-related sales.
Joining that group now is Thermo Fisher Scientific, which reported $440 million in COVID testing revenues in its own third-quarter earnings report Wednesday. In an accompanying call with investors, Chief Financial Officer Stephen Williamson said that represented “just over $200 million” more than the company was expecting to take in from COVID testing for the period.
That’s been an ongoing trend for Thermo Fisher: Its COVID-related revenues were $1.5 billion higher than expected for all of 2021 and about $400 million higher in each of the first two quarters of this year.
The third-quarter COVID testing bonus helped the company report overall revenues that were $800 million over its estimates, Williamson said. They clocked in at $10.68 billion, representing year-over-year growth of about 14%.
Thermo Fisher attributed a 20% revenue increase to its recent acquisitions, which include the $17.4 billion purchase of contract research giant PPD. That deal closed at the beginning of December 2021, just in time to secure its spot as the largest acquisition in medtech for the year.
Altogether, that growth led the company to up its forecasts for all of 2022. It added an extra $650 million to its expected full-year revenues, putting them on track to reach $43.8 billion—which would place the year’s haul about 12% higher than 2021’s total revenues, a slight jump from the previous estimate of 11% growth.
Meanwhile, Thermo Fisher is now planning to tally up a total of $2.8 billion in COVID testing revenue for the entire year, Williamson said, well below the $9.23 billion it took in for all of 2021. With the first three quarters racking up a combined $2.75 billion in the segment, that leaves just about $50 million to be earned from COVID test sales for the final quarter of 2022, a steep drop from the rest of the year.
“The higher outlook primarily reflects the strength of our core business and a modest impact of additional COVID-19 testing,” CEO Marc Casper said on Wednesday’s call.
Casper added that the updated guidance factors in the “temporary impact of inflation” on Thermo Fisher’s employees, saying, “We'll be making a onetime payment of approximately one week’s additional salary to nonexecutive colleagues.”