Editor’s (re)View: Lonza and Thermo Fisher roll on despite volatility in business environment

This week, two of the largest contract development and manufacturing organizations (CDMOs) — Lonza and Thermo Fisher Scientific — reported third-quarter 2025 financial results that bode well for the biopharma industry, as it continues to grapple with the Trump administration’s Most Favored Nation (MFN) drug pricing and the potential threat of tariffs.  

Thermo Fisher CEO Marc Casper told analysts in Wednesday’s earnings call there’s a “quiet confidence” among biopharma customers that they will “be able to navigate” MFN drug pricing and the threat of pharma-specific tariffs. Casper contends the incremental MFN/tariff-related investment in U.S. R&D and manufacturing by Big Pharma will benefit Thermo Fisher’s analytical instruments, bioproduction, and channel businesses.

“We’re very engaged in helping those customers think about new sites, how to best equip them, and support our customers in that effort,” Casper said. “But it takes some time to gestate. More rapidly than that, and in a way more cost-effectively for our customers, is leveraging our pharma services network to be able to move more of their volume to the U.S.”        

On Thursday, Lonza confirmed its full-year 2025 outlook for the company’s CDMO business amid geopolitical uncertainty with strong demand for bioconjugates, mammalian, and small molecules, while reporting no material financial impact expected from current U.S. trade policies.

CFO Philippe Deecke told analysts in Thursday’s earnings call that Lonza is “confident that our well-diversified global manufacturing footprint with large capacities in the U.S., Europe, and Singapore will enable us to support our customers’ global manufacturing requirements today and in the future.”

Deecke also commented that recent fluctuations in biotech funding levels will have a “minimal impact on Lonza’s growth momentum in 2025 and beyond, with early-stage activities representing only approximately 10% of the CDMO business and only a portion of that business originating from companies requiring funding.”

Cell and gene therapy challenges

Although Lonza reported strong Q3 CDMO results, it continues to struggle with its cell and gene therapy (CGT) business. Deecke told analysts that ongoing CGT pipeline variability and complex manufacturing continues to weigh on asset utilization, calling it a much more manual manufacturing process with the company still managing the complexities.

“While we anticipate a gradual recovery in operational performance, it will remain below the strong execution seen in 2024,” Deecke said. “Cell and gene is a business with strategic relevance to Lonza, and it is our aim to increase resilience of the business over time, commercially and operationally. In the meantime, some business variability may persist.”

Lonza isn’t the only company to struggle in the CGT sector. Charles River continues to navigate a shifting landscape. “We’re building the plane as we’re flying it,” said Matt Hewitt, vice president and chief technical officer of the manufacturing business division at Charles River.

In a Q3 earnings preview last week, William Blair analyst Max Smock told investors on a webinar that when it comes to Charles River, he’s been “very skeptical about the cell and gene therapy CDMO space really for a couple of years now.”

Still, Smock noted Charles River’s statements around this business — outside of the lost commercial contracts — have been more bullish than expected over the last two quarters. “It’s more about getting past this year,” he said.