The Rising Influence of Rising Affluence

[DewDiligence]

TMO acquires One Lambda for $925M to exploit global demographic tailwind:

http://www.bostonglobe.com/business/2012/07/16/thermo-fisher-buys-one-lambda-for-million/Z8nQ3pfzQqvwxabSMlSYiI/story.html

The acquisition is intended to make Thermo Fisher a global player in organ transplant products. One Lambda, based in Canoga Park, Calif., makes tests that identify compatible organ donors and recipients, and that detect antibodies which signal the body’s potential rejection of a transplanted organ.

Marc Casper, chief executive, said the acquisition will help Thermo Fisher meet steadily growing demand for organ transplant diagnostic systems in developing economies, a $480 million worldwide market.

“We’re seeing accelerating growth in Brazil and China,” said Casper. “As those health systems become more mature, things like transplantation become more available.”

A Cowen analyst noted the competitive risk:

[Cowen’s Doug] Schenkel called the acquisition price reasonable, but warned that One Lambda’s long-term future may not be so rosy, because new gene sequencing technologies now under development could supplant its donor compatibility tests in five to 10 years.

p.s. One Lambda is private.