What Happened?
Shares of life sciences company Thermo Fisher (NYSE:TMO) jumped 9% in the afternoon session after the company secured a major manufacturing agreement with biotechnology firm Vaxcyte and announced a new AI-focused partnership.
The agreement with Vaxcyte is valued at up to $1 billion and will provide commercial fill-finish manufacturing for its pneumococcal conjugate vaccines. This significant deal signals a strong pipeline of business for Thermo Fisher's manufacturing facilities. Adding to the positive sentiment, the company also revealed a strategic partnership with BenchSci, an AI pioneer, to develop AI-powered tools aimed at accelerating experimental design and improving R&D productivity for scientists.
The shares closed the day at $531.11, up 9.6% from previous close.
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What Is The Market Telling Us
Thermo Fisher’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 4.8% on the news that reports revealed a potential drug-pricing agreement between the White House and the pharmaceutical industry. The Trump administration is advancing its “Most Favored Nation” initiative, which aims to lower prescription drug costs for Americans. This policy would tie the prices of medications in the U.S. to the lowest costs paid by other wealthy nations. As part of this push, Pfizer has reportedly entered into an agreement to voluntarily sell its medications through Medicaid at these reduced prices. The move comes as the administration intensifies pressure on drugmakers to make prices more affordable. While pricing controls can often be a headwind, the market's positive reaction suggests that investors may see this voluntary agreement as a way to resolve regulatory uncertainty, providing a clearer path forward for the industry.
Thermo Fisher is up 1.6% since the beginning of the year, but at $530.73 per share, it is still trading 13.4% below its 52-week high of $612.94 from September 2024. Investors who bought $1,000 worth of Thermo Fisher’s shares 5 years ago would now be looking at an investment worth $1,211.
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