Good morning, everyone. This is Rachel Vatnsdal from the Life Science Tools and Diagnostics team here at J.P. Morgan. I'm joined on stage by Marc Casper, CEO of Thermo Fisher. So as we typically do, this is gonna be a 40-minute session. Half will be roughly 20 minutes of presentation, followed by 20 minutes of Q&A. If you do have questions, feel free to either submit them via the portal, or you can ping me directly. And with that, Marc, pass it off to you.
Rachel, thank you. Nice to see everybody here in San Francisco. Great to be back at the J.P. Morgan conference. So the time goes quickly. A year ago, I'm reflecting back on being in front of this group right here in this ballroom and, you know, thinking about the year ahead for 2023. And I think the industry, and certainly ourselves as well, expected that our industry would see moderating growth in 2023, after several years of extraordinary growth in terms of the role that the pandemic had called upon our industry to play, and Thermo Fisher specifically as well. The year wound up turning out to be more challenging even than the moderation of growth that we had reflected upon at that point in time.
The pandemic unwind actually played out roughly as I think we expected and probably others expected, but the combination of more difficult macro environment and a resulting caution in customer spend, as well as a deterioration in the Chinese economy, affected the results, right? Before one declares a victory lap on a year, I think one puts it in the context that we navigated a very different environment than we were expecting to navigate. I'll talk about our performance in that context, and I'm very proud of how the team operated last year and what we delivered. But of course, we didn't achieve the original financial goals that we set out to, and we'll look forward to getting back to that track record in 2024.
So when I look at the safe harbor statement and the non-GAAP measures, they're up here on the screen, and you can find the reconciliation of any numbers to the relevant numbers in the investor section of our website. So take note of that. So the key takeaways, right? When I think back now on 2023, with the environment explained, we actually delivered a strong year. Differentiated performance rather relative to others in the industry. The team worked tirelessly. I'm very proud of our 125,000 colleagues for what they delivered, and as we like to say internally, they sprinted right through the tape in the fourth quarter, and I'm proud of that. When I think about how we're positioned for 2024, it'll be a good year for us, right?
We're excited about how well-positioned we are. So one of the key takeaways is that. When I think about our company, we're an incredibly well-positioned industry leader. We serve very attractive end markets. I know that'll be a discussion throughout, I'm sure, the days and the breakouts about are the markets, you know, attractive? The answer is resoundingly yes, and we'll talk about that. Our growth strategy has consistently driven, you know, meaningful share gain. You see that in our results. You've seen that over the years, actually, over the decades. That strategy works, and it positions us well for success going forward. We are aggressive and active deployers of capital. That strategy creates value for our shareholders and for all of our stakeholders because it strengthens the company's outlook for the long term as well.
We have a deeply ingrained business system called PPI. Many of you familiar with it. It enables outstanding execution of the company, and we do business the right way. We have a comprehensive ESG strategy that delivers competitive advantage for Thermo Fisher Scientific, and our financial track record, both historically and our future, is incredibly bright. We are a very well-positioned industry leader with an exceptionally bright future ahead of us. Always good to orient on the company as we continue to evolve and actively shape our company. Today, as the world leader in serving science, our customers know us for our leading brands.
Thermo Scientific, Applied Biosystems, and Invitrogen, Fisher Scientific, Unity Lab Services, Patheon, PPD, they are, you know, on the tip of the tongues of all of our customers in pharma and biotech, academic and government, healthcare and diagnostics, industrial and applied, just an incredibly well-known set of capabilities. We have $43 billion in revenue, 125,000 colleagues in our manufacturing businesses. We invest about $1.4 billion in research and development. Our customers know us for our industry-leading scale, our unmatched depth of capabilities, and all of our stakeholders understand the sustainable value creation approach that we've taken over a long period of time. Our business gets better every day because of our PPI business system, and I'll talk more about that in a few moments.
When you look at what rallies all of our colleagues to get up every day, fired up for the day ahead, it's around our mission, which is our purpose. It's a pretty slide. The words sound good, but they're deeply ingrained and genuine. We enable our customers to make the world healthier, cleaner, and safer. We're behind the scenes, enabling the breakthroughs in new medicines, diagnosing patients, and helping doctors bring the right treatments to the child that's sitting in front of them in an appointment. We're helping our customers make sure that the environment is cleaner. We're helping in the efforts to decarbonize the world. And from a safer perspective, the food that we eat, the water that we drink, and the air that we breathe are all safer because of the technologies that our customers employ from us.
We serve a great set of end markets, and we have significant opportunities to enable our customer success. When you look at our revenue mix, about 60% of our revenue is serving Pharmaceutical and Biotech, and we're enabling our customers from a scientific idea, the very beginning of the research process, all the way through the delivery of a commercial medicine, all right? We play a role across that value chain. Our other three end markets are roughly 15% of our revenue each. Diagnostics and Healthcare, where we enable more cost-effective healthcare, and we're powering precision medicine. Academic and Government, we're bringing out the scientific advances to fuel the development pipelines for the pharmaceutical and biotech industry, and in industrial and applied, facilitating research and advanced materials that really puts material science, clean energy, and the semiconductor industry at the forefront.
We have four business segments, and those segments are industry leaders in their own right. Starting with our Analytical Instruments, we have leading analytical technologies to enable scientific breakthroughs and solve the most difficult analytical challenges. Life Science Solutions is a portfolio of capabilities to serve the life sciences research, the Bioproduction, and Clinical Markets. Specialty Diagnostics, Leadership in the Specialty Diagnostics segment to cost-effectively improve patient care. And our largest segment, Laboratory Products and Biopharma Services, we're enabling the biopharma industry with our leading laboratory products, clinical research development, and manufacturing services. Incredibly strong set of complementary capabilities across our company. The reason that we are able to navigate the variety of environments that we've faced over the years is because of our PPI business system.
It's the culture and mindset of our colleagues, that every colleague is engaged in the company's success, and we hold ourselves to a standard that we're gonna be better today than we were yesterday, and we're excited to make tomorrow better than we are today. And that just constant dissatisfaction with the status quo has allowed the company to execute its strategy and deliver spectacular performance over a long period of time. The benefits of our PPI business system is seen in our quality, productivity, and customer allegiance, where we have world-class products and services, we have incredibly strong operating processes that drive efficiency, and we're very focused on delivering customer success day in and day out. The results of a deeply ingrained business system is competitive advantage.
It's the ability to successfully integrate acquisitions, make the acquired companies are better than they were when we acquired them, and deliver differentiated financial performance for our shareholders. When I think about the future, before I talk about our performance against goals and talk about our future goals, I think it is always helpful to think about: How do we measure success? What is the standard that we're holding ourselves to, right? The first is that we're gonna operate with speed at scale to support our customers, right? We're gonna bring our relevant capabilities, expertise, products, and services to make a high impact on our customer success. We're gonna hold ourselves to the standard of delivering differentiated short-term performance, that, you know, we hold ourselves to the highest bar of what good looks like in a given year.
At the same point, continually enhancing our long-term competitive position, right? It's getting that right, which is you deliver great short-term results, and at the same point in time, you create a brighter and brighter future. And that's the standard that we manage the company to and have a great track record of. When I think about why the future is so bright, it's also around our end markets. They have strong growth, they have durable growth, right? We serve a GDP-plus industry, right? And you think about what drives our industry ultimately, it's really around the demographics of increasing healthcare needs around the world. Aging populations, more wealthy populations, those things drive the demand for healthcare, and we're the company that enables the industry to make that a reality. The scientific advances going on right now, the impact that it's having, it's unbelievable, right?
Having sat through a day and a half now of customer interactions, the enthusiasm in the pharmaceutical, the biotech industry, how AI is intersecting with the industry, it's spectacular about what's going on in the research side, and that means that ultimately, funding will be strong to capitalize on those opportunities, and that really creates a bright future for our industry. And then on the material science side, we don't talk as much about it. You know, there is great growth coming from semiconductors, advanced materials, and the clean energy transition that our company, you know, powers, right? So the end markets are strong in the long term, right? And I feel good about that. And no matter what the environment is, we have a good track record of navigating that dynamic environment, right? And the reason for that is we're a trusted partner to our customers.
Our customers tell us when the environment is tough, what do they need from us, right? How do we help them navigate it? They tell us when things are surf's up and everything is great and, right, you know, just be ready for the huge demand. So we get that view from our customers, and, you know, it's exciting in terms of the role that we play from there. Our business system, you know, drives continuous operational excellence, and we have a deep and experienced management team that has, you know, steered the company through many different environments. So I think we're very well positioned for a bright future. When I think now about our financial results, if you look back over the last 10 years, you know, we've been able to deliver consistently teens growth in revenue, adjusted EPS, free cash flow.
You can go back longer, the numbers would look similar. So, we have an incredibly, you know, disciplined track record of creating value for our shareholders, and we're excited about our formula for success going forward. When I was here a year ago, this is the slide I presented for our goals for the year. I always like to use this as a quick recap of how the year went qualitatively, and we look forward to reporting our financial results on the 31st of this month, and we'll talk about the quantitative aspects of our performance. So revenue, it's about executing our proven growth strategy to drive share gain. PPI business system to navigate the environment. You know, effectively execute our capital deployment strategy and progress our ESG priorities.
Those are the goals that I set out when I think about how we did. Incredible year for product launches, right? One of the best that I can remember, in my years at the company. Across the business, and this is just a very small snapshot of the products that we launched, whether it was in genetic analysis with Digital PCR, whether it was a true breakthrough in mass spectrometry, where we're the industry leader with the Orbitrap Astral, which we think is the most significant launch in the last 15 years in the industry. The customer adoption has been incredibly significant. Whether it's something that you probably read about, right? We're a company that's kind of behind the scenes, despite our scale.
You probably read about our diagnostic assay for preeclampsia, the first cleared assay in the U.S., to help stratify patient risk for pregnant women. Hugely relevant from a improving quality of life and, and safety, of mothers and, and child in this case. So this gives you the example of the kinds of innovations that we've launched. Bioproduction, strong launches, helping semiconductor innovation, as well as enabling gene therapies to round out a very strong year of product launches last year. When I think about the second aspect of driving share gain, is advancing our trusted partner status.
Just took some snapshots from some of the media that was out there in terms of the collaborations that were reported on and the roles that we play to enable our customer success, and really, broad-based across the industry in terms of making a huge difference to enable the biopharmaceutical industry. The final aspect of our share gain strategy is around the unparalleled commercial engine that Thermo Fisher has. Some examples of the progress we made in 2023 was around our new cell therapy GMP facility that we opened. It's a collaboration center that we work with both the academic community and the biotech community in cell therapies. We expanded our customer excellence centers in Europe, with a state-of-the-art facility that was open. We're leveraging AI further to optimize commercial effectiveness and improve the customer experience.
You know, when I think about AI, there's sort of two aspects to it, right? There's how you run the company, and then where do you create new value. In adopting how we run the company, it's making a really significant difference in the early days, right? Some of the stuff we've implemented many, many years ago. But in terms of the generative AI, it really is making us better, and it creates a great opportunity to just find new ways of doing our work more efficiently, and then ultimately creating new products and services for our customers. So very exciting in terms of the progress we made on the top line in 2023.
When I think about the PPI business system, and as the environment turned more challenging, in the first half of the year, we really ramped up our commercial intensity, and the team did an extraordinary good job of going out and winning business. We actively managed our cost base. Versus our original guidance, we took $1 billion of cost out of our P&L, right? So we didn't sit passively whatsoever in terms of managing through a different environment, and I'm proud of how the team responded to that to set us up for success. And we managed price appropriately so that our customers feel good about how we help them, and at the same point, managed through an inflationary environment. So made a real difference to our success last year. When I think about capital deployment, we closed $4 billion in acquisitions.
The Binding Site and CorEvitas, great additions, performing incredibly well in their first year of ownership. We announced the acquisition, a $3 billion acquisition of Olink, and on track to close middle of this year, there. We invested around $1.5 billion in CapEx to fuel our long-term growth and returns on investment, and ultimately returned $3.5 billion of capital to our shareholders during the year. So that free cash flow was actively put to work to create a brighter future for the company and for our shareholders. ESG was a strong year. Environmentally, we are well on our way to achieve 80% of our sites across the world will be powered by renewable energy. We signed commitments in Europe to get over half of our sites on renewable energy by 2025.
We were able to also help our customers achieve their own objectives through launching new products that are more environmentally friendly. Socially, a strong year. You know, we've been recognized repeatedly for our award-winning culture and a place where our colleagues can have a mission-oriented career. And we've been active in supporting our communities through STEM education, right? So we're good neighbors, if you will, as a company where we work around the world. From a governance perspective, we continue to see our ratings increase, and recognized for our disclosures. And if you haven't glanced through our corporate social responsibility report, I think it's well worth a quick read about how we operate the company and the positive impact we're having on the world. And we report with transparency, and we get recognized for that as well.
So when I think about 2023, I'm proud of how the team navigated the environment, worked tirelessly to deliver against our goals for the year, and most importantly, set the company up for a bright future, which turns us to our 2024 goals, and nothing here should be surprising.... Right? We're gonna go out, we're gonna execute our share gain strategy, our growth strategy, and go win business, from our customers so that we continue to, deliver differentiated performance. From an operational excellence perspective, we're gonna leverage our PPI business system to deliver strong cash flow and earnings growth. We'll effectively execute our capital deployment strategy, closing, and successfully integrating Olink this year, and continuing to execute. We have an active pipeline.
We'll continue to look at the right opportunities for the company to deploy capital and create shareholder value, and we'll continue to make progress on our environmental, social, and governance priorities. So I'll end before we go to the Q&A with where I started, right? 2023 was a year. It had its challenges. It took 365 days to deliver results that we were proud of, but I am proud of how the team executed during the course of the year, and we're well-positioned to do so again in 2024. We're an incredibly well-positioned industry leader. We serve attractive end markets. We have a great growth strategy that's proven, that drives share gain, capital deployment strategy that creates significant value, powered by our PPI business system, and a comprehensive ESG strategy that creates competitive advantage.
I'm excited about our financial track record, much more excited about our financial outlook. So the future is bright at Thermo Fisher Scientific, and I appreciate you filling the ballroom and standing through the session. And with this, I'll turn it back over to Rachel.
Perfect. Thank you, Mark. Yeah, next year we'll hopefully get a bigger room for you.
Exactly.
To kick it off here, it's been a volatile year, as you mentioned. Many of the markets that Thermo and peers participate in have been challenged, and one of the key questions that investors are really trying to understand is: Is there something structurally broken in the industry that Thermo and your peers play in, especially given how low visibility it's been in recent quarters as well? So from your point of view, has anything changed in how you view those long-term prospects of the sector?
Yeah, Rachel, you know, I think it's a good question. I also think it's the right question, right? Which is, in a year where our industry, you know, historically, our industry is incredibly predictable and, probably skewed towards the upside generally. And then you have a year where, you know, a lack of visibility that occurred. I think. Let's talk about that, and then we'll talk about the future, right? So I don't think anybody predicted China, right? You know, across the economy in terms of Q1, things ramped up in the industry, ramped up for us, and then things fell off a cliff in terms of activity through the balance of the year.
I think the Chinese government and the Chinese, at least our colleagues, were as surprised as anybody about sort of how weak the environment was, right? So that visibility, I'm not sure that there was something that anybody could have done differently. You know, I think the combination of a pandemic unwind, which I think, you know, certainly we understood and reflected in our financial outlook, combined with higher interest rates, a more muted funding environment in biotech, customers were just more cautious, right? They just didn't know what does inflation mean, and that seems to be easing. But the combination of less available capital for our customers, higher costs through inflation, customers just were more cautious during the year, and I don't think anybody really anticipated that. When I think about the future, right, what an unbelievable industry, right?
In terms of what we do, right, and what are we enabling, right? If you think about the curative medicines that are progressing through the pipeline, the impact that it's having on lives, right? You see it through the obesity medicines that are coming, you know, that have been launched. You see it through the continued focus on Alzheimer's, you know, a, you know, a devastating disease, which hasn't been, you know, you know, tackled yet, but there's huge efforts against that. The learnings from mRNA and where that can be applied. You can go through the list after list after list, list after list of items that just create optimism that there's gonna be new medicines out there, and our industry and our company is gonna benefit hugely from enabling that success.
The discoveries going on on the research side in terms of an academic has been great. If I think about just the enthusiasm around a product like the Orbitrap Astral, even in a more constrained environment, there was no problem getting funding, right? Customers spending over $1 million, short notice, just going out and getting the money because the product is so relevant to the discoveries that it enables. And I just believe that, you know, if you're bringing out relevant products, our customers will ultimately have the money to go out and buy them. So combination of an attractive set of opportunities in the Pharmaceutical and Biotech Industry, great scientific breakthroughs bodes well for the future. And I always think about our Industry as GDP plus, right? So, you know, we think about 4%-6% market growth.
You know, you look back over the last 20 years, that's a good proxy for what it was. I can point to years that it was below it. I can point to two or three years that we just lived through that it was way above it. But if I say over the long period of time that I've been in the industry, you know, it's an industry that grows four to six.
Got it. That's really helpful. Maybe just shifting over to 2024. So you provided an initial framework for the year that pointed towards roughly 1% core growth. So one of the key things that investors are looking at is trying to approach this from a bottoms-up analysis to get to that outlook for 2024.
So, appreciate you'll give us more color during Q4 earnings, but in the meantime, can you just remind us of what are your assumptions embedded in that initial framework? Should we think of it as a floor for 2024? And then how do we think about the phasing throughout the year as well?
Yeah. So, if you, if you go back to October, what, what, why did we do what we do? I think is actually a helpful starting point. Right, when you looked at the sell side, outlook for, the industry, incredibly bullish on 2024, right? And what we believed in October is that we would deliver a good fourth quarter, that we would, you know, we would execute against what we said we were gonna do, and then we would have this sort of fall flat on our face, which is the you know, the, the analysts are expecting this incredible growth in 2024, which is not reflecting the environment that we're in. So we actually said, "Let's give a high-level view of how to think about the upcoming year." Right? And we didn't do the deep bottoms-up analysis.
We hadn't even finished the year yet, right? But we said, "You know, the environment, market growth probably down 1% to 2%. You know, we'll grow three points faster than the market. That's about a point of growth. That's similar to what we guided to last year." With that and the cost actions that we took throughout the year, that would lead to, you know, a slight increase in EPS on those assumptions, and that we would actually do real guidance, as we, you know, as we finish the year, know where we were and set it up. And so I look forward to that in January. I don't think of it as, you know, anything other than getting our analyst community down to an appropriate level of consensus to start the year, and then we'll get into all the details, bottoms up, to explain it.
My expectation for the year, so hopefully helpful, is that it's a mirror image of what we had in 2023. Meaning that the comparisons are much more challenging in the first half, much easier in the second half. So you're gonna see, you'll see growth pick up in the second half of the year just based on the comparisons, and we're also assuming, I would say, you know, a slight pickup in the, you know, a modest pickup in the growth as well, in terms of the market conditions as the year unfolds. So if I say, that's sort of the underlying assumptions behind our outlook, hopefully that's helpful.
Yeah. No, that is. Maybe going over to the long-term framework s o you mentioned the 4% to 6% market growth. So you lifted that to 4% to 6% during your 2021 Analyst Day. Previously, your market growth assumptions before that were 3% to 5%. So can you walk us through the framework you used to develop your market growth assumptions? How much of that was really driven by the shift with Thermo Fisher's portfolio mix versus some type of underlying acceleration in market growth? And then do you still think that 4% to 6% is the right way to think about market growth going forward?
Yeah, so when I think about market growth, the drivers in the assumptions has always been: What is our mix of our business, right? So for many years, we had assumed three to five . This is a long time ago. At the time we acquired Life Technologies, we actually made it three to four because we had had a mix shift at that point in time. And then, as we expanded our presence in pharmaceutical and biotech, and just looking at the mix, where it used to be about a third of our business, and today it's about 60%, the 4% to 6% is really the product of the mix of our business. And so I feel very good about that. And so, so that's one, is really kind of the weighted average math of the company, is how we got to four to six.
The share gain assumption that goes with that, right? I mean, historically, we would have said, and the historically being, say, 2010 to maybe 2016, 2017, we'd say, you know, one to two points of share gain above market growth. And we've been consistently delivering now for a number of years, two to three or even more share gain. And we said that holding ourselves accountable to about three points of growth faster than the industry is, is appropriate in terms of our strategy and our execution, and that's how we take the four to six and turn that into a long-term growth of seven to nine.
Got it. That's helpful. So maybe just as a follow-up on that seven to nine, Thermo is one of many companies in the sector that lifted LRPs over the last few years. So just given that recent volatility that we've seen in the market, is 7% to 9% still the right way to really think about Thermo going forward?
Yeah, when I, when I think about in normal market conditions, our ability to deliver 7% to 9% growth, I feel with extraordinarily high confidence in our ability to do that. We have a great track record, right, in terms of having delivered, you know, greater than 20% organic growth, you know, high teens organic growth during the pandemic. Our ability to, you know, in normal conditions, grow seven to nine is something that we'll do.
Perfect. Helpful. Then I kind of wanted to touch on this topic of cautious customer spend that we've been seeing throughout the sector. The unwind of the pandemic and cautious customer spend has really caused a short-term impact for some of your businesses, particularly those serving pharma biotech customers. Can you walk us through at a high level for bioprocessing, CDMO, and the CRO businesses, what you're seeing there? Then how do you think about these businesses really contributing to that long-term growth profile of Thermo Fisher?
Yeah. So when I think about the three businesses that you mentioned, these are awesome businesses. We have incredible position, right? And if you just think about what they are, right, in bioproduction, right, which has been a-- it's like a taboo word in the industry, it's an awesome business, right? We're the leader in cell culture media, single-use technologies, rapidly growing purification business. This is a business that, you know, has historically grown, you know, 15% to 20% consistently, sometimes even faster than that, and the future there is incredibly bright, right? There's clearly been, you know, customers, you know, working through their inventories, et cetera. You know, the lead times have returned to normal, but the future here is very bright in bioproduction, and I'm not smart enough to say which quarter that, you know, where, where that exactly plays out, but the position we have there is very strong. When you think about our contract development and manufacturing capabilities, you know, we have industry-leading capabilities: drug substance, drug product, small molecule, large molecule, advanced modalities. Really, the only area that we don't play, really just because of the competitive dynamic, is large-scale biologic drug substance is an area that is not where we play. And, you know, our customers know us as an industry leader in sterile fill finish. They know us for our industry-leading capabilities in single-use, biologic drug substance, and an incredibly strong set of capabilities. And, probably 40% of all clinical trials runs through our sites ultimately, in terms of the packaging and logistics of handling that for the industry. So very strong capabilities, very bright growth prospects.
Then in our CRO business, the number two industry participant, strong clinical development capabilities, great synergies that we've been able to get through the combination of our pharma services and our CRO. All three of those businesses will grow in the mid- to long-term faster than the company average. These are, you know, depending on the business, high single- to double-digit type growth businesses with very strong competitive positions, right? So I think the future there is bright. This year, we'll work our way through the probably the final year of the COVID wind down of activities, right?
You know, last year we, you know, we were expecting, as we said in our framework for 2023, about $1.3 billion of runoff in our COVID-related activities, and that's what we'll see this year, and we'll get ourselves down to a, you know, a smaller number this year, and it'll be less of a story going forward.
Great. That's helpful. Then, spending a few minutes here on China.
Yeah.
China obviously has been a really dynamic market in 2023. We started off with some of those stimulus benefits, but then performance became challenged as the economy deteriorated, and we came into some of these funding constraints. How are you thinking about China in the near term and in the long term? Then how much of the weakness that we've seen this year do you think is structurally lost versus cyclical and will eventually come back?
Yeah. So I've spent a lot of my career, working in China and, growing our capabilities there. Over the last 18+ months, I've been chair of the U.S.-China Business Council, looking for ways, certainly with, the support of the, of the U.S. government, to, to find the win-wins that make sense and, to, to understand where there's opportunities. So, so I'll, I'll put the commentary both as CEO of Thermo Fisher and in my role as chair of the U.S.-China Business Council. So in the long term, right, assuming that the relationships don't deteriorate to, you know, a catastrophic level, and, and so no one's smart enough to know whether that happens or not, I- I would say the market will be good, right?
It won't be as fast as it used to be, but it's probably gonna be one of the faster-growing long-term end markets, just given the desire to improve the standard of living, you know, a healthier China, and, you know, companies like us play a large role in helping that become a reality. So I actually think that the long term there is reasonable. And I also believe in the short term, the government is actively working to make the environment easier for multinationals, right? In a way, in terms of creating business confidence. It's one of the things that I clearly have come away with from some of the interactions that I've had with the government.
You know, when I think about the short-term economic environment, right, it's been super challenged in terms of the GDP growth and in terms of the demand in the life science tools, diagnostics, pharma services industry. And when I think about the government, how historically the government has dealt with this in China, it's really been around stimulus. And given the economic priorities of dealing with balance sheet issues that the government's working through, it seems less likely, although you never know, that there's going to be a lot of stimulus, and I think it's going to just take a little bit more time for the economy to work its way back to a stronger footing. I think, like everywhere, there was a pandemic bubble in China, in the biotech industry.
That growth won't return, but, but in terms of cheaper medicines that are locally innovated, I think there'll be a dynamic and robust local industry, and of which we'll play a role in supplying it. So I would say China long term is a 10% type growth business, and in 2024, I would expect it to be a pretty muted year, in China. That would be my base case assumption.
Got it. That's helpful. I wanted to touch on your portfolio and analytical instrumentation.
You talked about the Astra launch and the success there. Electron microscopy has continued to perform well as well. But also in 2024, you're going to be facing some difficult comps.
Mm-hmm.
So how should we think about that analytical instrument portfolio heading into 2024? And then also, you know, the higher-end markets have been a bit more insulated from some of this cautious customer spend. We've seen more of that pressure on the lower-end QA/QC-type portfolios. So is there a risk that that cautious spending could kind of go up further into the markets that you play in?
Yeah. So when I think about our analytical instruments business, sum it up in a word, it's awesome. It's two words. Awesome, then. That's one word. It really is. It's incredible the capabilities that we have, right? If you think about our chromatography and mass spectrometry business, we enable the cutting-edge research. The Astral adoption, as you said, is very strong. Our electron microscopy business is a gem in terms of the capabilities that it unlocks for the semiconductor industry, for life science research, for advanced materials, the demand there has been incredibly strong. And my experience of, you know, 25+ years in the industry is customers will find money for the high end, no matter what the environment is, right? It's more routine instruments is where you feel the pressure when the environment is challenged.
We've seen really good momentum on the high end, and I think we're incredibly well-positioned going forward. We will have a more difficult comparison in the first half because we did have, we cleared the backlog, if you will, on supply chain issues at the beginning of 2023. So as we thought about our framework for this year, businesses like analytical instruments, likely to have a reasonable year, but are likely to grow more slowly. Businesses like bioproduction, likely to not have nearly the headwind that they had in the previous year, and that's you, you kind of put and take those things. It, it gets you to the similar rates of growth.
Great. That's helpful. Then I just wanted to ask on M&A here quickly. So you announced the Olink acquisition a few months ago Can you kind of walk us through what Olink provides Thermo and why this asset makes sense with the portfolio? Then, as a follow-up, you know, you've completed some other deals this year. They've all been kind of in this mid-size range. So how should we think about the long-term formula for capital deployment for Thermo going forward, especially when it comes to deal size?
Yeah, Rachel, we serve a fragmented industry, right? And many, many targets, and we look at the ones that we think are uniquely the right fit in Thermo Fisher to thrive. And most of the deals that we do, by numbers of transactions, are mid-sized deals, right? $50 million to $500 million in revenue. And then occasionally, we do large deals. It's not that we don't want to do large deals, there's just not that many of them, and you do them periodically, right? So, last year, we did a number of transactions in a certain size range, that's kind of your typical year, and then occasionally you see us do something larger. Olink is great, right? And what was really awesome about Olink is it's a business that we followed for a while.
It was truly unaffordable, right, when you looked at what the valuations were. And with the equity market, you know, coming back in, you know, coming back down in the middle of the year, it opened up an opportunity for us to be able to generate really good returns for our shareholders and, take the uncertainty of where valuations were going to trade for the selling shareholder. The company is a controlled company, even though it's publicly listed. And so we saw it as a, a really unique win-win and phenomenal complementary fit to our mass spectrometry and life science solutions businesses.
Perfect. Then the final minute or two here, Marc, I just wanted to ask, how should we think about Thermo going forward? Is there anything we're missing from this story, and kind of where do we go from here?
No, the future is so incredibly bright here. We have a great team that's passionate about delivering differentiated performance every day for all of our stakeholders, making a huge difference for our customers, and just having a great 2024 and beyond. Rachel, thank you.
Perfect. Thanks so much, Marc.