Good morning. I'm Ken Apicerno, Vice President of Investor Relations for Thermo Fisher Scientific. I want to welcome you to our 2020 Analyst Meeting. This year coming to you in a virtual setting. As most of you know, we hold this meeting in New York in May each year, but due to the pandemic, we unfortunately were not able to conduct an in person meeting.
However, we didn't want to miss the opportunity to provide the investment community with a more comprehensive update and outlook as we usually do. So thank you for taking time to join us today. So let me start by briefly covering the agenda. Given the virtual format, this will be a slightly more abbreviated agenda this year and we'll focus a bit more on current conditions. Mark Casper, our Chairman, President and CEO will start off with a strategic view and how we continue to build on our industry leadership even in these uncertain times.
Mark Stephenson and Michelle Lagarde will then provide a combined presentation on how Thermo Fisher is responding to the COVID-nineteen pandemic and how the company is demonstrating speed at scale, a term you're going to hear quite a bit about during the presentations today. Stephen Williamson, our CFO, will conclude with the financial outlook and how we continue to deliver exceptional financial results. After the formal presentations conclude, Mark will come back up and we'll then open it up for Q and A. So before we get into the presentations, let me cover our safe harbor. Various remarks that we may make in these presentations about the company's future expectations, plans and prospects constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the company's most recent quarterly report under the caption Risk Factors, which is on file with the Securities and Exchange Commission and available in the Investors section of our website under the heading SEC filings. While we may elect to update forward looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change and therefore you should not rely on these forward looking statements as representing our views as of any date subsequent to today. Also during the presentations today, we'll be referring to certain financial measures not prepared in accordance with generally accepted accounting principles or GAAP, including adjusted EPS, adjusted operating margin and free cash flow. The non GAAP financial measures of our results of operations and cash flows included in today's presentations are not meant to be considered superior to or substitute for Thermo Fisher's results of operations prepared in accordance with GAAP. Definitions of these non GAAP financial measures and for historical purposes, a reconciliation of the non GAAP financial measures to the most directly comparable GAAP measures is available in the appendix in today's presentations.
So with that, it's my pleasure to now turn the program over to Mark. Mark?
Thanks, Ken. Welcome. It's been quite a year so far and we're looking forward to discussing the highlights, how we've accomplished them and why we're now even better positioned for the future. Obviously, it's a different format this year. It's somewhat abbreviated, but we're going to have ample time to hit the high points, reinforce why we believe it's such a great time to be in our industry and how we plan to build on our leadership in this decade.
I want to take a moment to thank our teams for the amazing work that they've done during this unprecedented time. They've kept us operational, developed solutions for the societal response to the pandemic and then so rapidly scaling them to meet the incredible demand. I couldn't be more honored to lead this exceptional team. As always, I'd like to thank our Board of Directors for their ongoing support. I know you'll get a sense throughout the morning of how excited I am and that all of us are for what's ahead for our company and the impact we can have on our customers and society.
So the key takeaways for the day really organized in 3 major sections. The first of which is that we're incredibly well positioned for an even brighter future. And that's embedded on the 4 key elements of what you're so familiar about our company. The benefits of our unique scale and depth of capabilities that create unmatched solutions for our customers the successful track record in executing a proven growth strategy our PPI business system that enables operational excellence and speed at scale, and the successful capital deployment strategy that delivers strong returns and continues to strengthen our strategic future and outlook. The second element is going to be focused by Mark Stephenson and Michelle Lagarde.
And they're going to focus on how we mobilize quickly to respond to the pandemic and enable the societal response. And then the 3rd takeaway of the day is how we're effectively navigating the current environment to come out of this period an even stronger industry leader. And Stephen Williamson, our CFO, is going to give you an update on our near term financial expectations and give you a sense of how we're thinking about 2021 beyond. So our mission, it's never been more relevant. We enable our customers to make the world healthier, cleaner and safer and truly make the world a better place.
We have so many countless examples of how we do that. And I think this slide reminds us of the many types of examples that we play in society. From a healthier perspective, you can hear lots about how we responded to the pandemic. Our PCR testing and the gold standard nature of what we do will become very clear. From a cleaner perspective, our electron microscopes are being used in material analysis, in particular, for the enablement of battery production.
And from a safer perspective, take a look at this picture, which has our vanquished PLCs used in a QAQC lab to ensure that the medicines that are made in the world are of highest quality and safe. I always like to orient you and you've seen the slide before. We updated some of the facts and figures. But as a company, we have over $25,000,000,000 in revenue, 75,000 amazing colleagues working around the world. We invest over $1,000,000,000 a year in research and development.
Our customers know us for the incredibly strong brands that we have and for our industry leading scale and our unmatched depth of capabilities. All of this is powered by our PPI Business System or Practical Process Improvement. These capabilities and the strategy we've been executing for many years has allowed us to really deliver exceptional financial performance. And I always love showing this slide looking back on the last decade. When we entered in 2010, we set very ambitious goals for the decade and we were able to execute consistently double digit growth in revenue, adjusted EPS and free cash flow.
As we entered this decade 2020, we're actually on track right now to have our best year yet And that puts us in incredible position as we look forward to the future. I want to spend a moment about how we've responded to the pandemic. And if you think about the fundamentals of our industry leading scale, depth of capabilities, this is the snapshot of where we are today. The first of which is those capabilities I just talked about were able to mobilize quickly to enable the societal response globally to the pandemic. Financially, it's been incredibly powerful, the impact that we've had.
Dollars 1,500,000,000 of revenue in the first half in terms of our response revenue, We expect to do about $3,000,000,000 of revenue in the second half of the year. That combined $4,500,000,000 of revenue could quite be quite possibly be larger than the rest of the industry combined this year in terms of COVID response revenue. But it's not just a 2020 story. We expect to have meaningful revenue well into 2021 beyond as the therapies and vaccines that we're supporting in the development and ultimately production become a reality. The final aspect of our COVID response is the strong relationships that we've always had and built with our customers has been significantly deepened and not just with customers but with governments around the world and that obviously is going to help us have a bright future as well.
Mark Stephenson and Michelle are going to go through this in detail and give you a sense of the depth of that response that we've had. What I'm going to do for the remainder of my points for this presentation is focus on how well we're positioned for an even brighter future. And there are going to be 4 things that I want to talk about: the attractive end markets that we serve and the leadership positions that we have in them the proven growth strategy that's allowed us to drive share gain our PPI business system that enables operational excellence and speed at scale and our disciplined capital deployment strategy. When you think about those four elements, that's why we're so excited for what the future holds. So let me start with our end markets.
Globally, our end markets are about $165,000,000,000 They've been growing historically at 3% to 5%. That growth has been driven by favorable demographics. The scientific advances that are happening, the investments in the pharmaceutical biotech and life sciences research has really created a very attractive industry. The migration of technologies from the life science research to the clinical and applied market has expanded our markets and the macro environment around regulations and compliance have also been favorable drivers. When you look at our position in that market, we have $26,000,000,000 in revenue.
Our largest customer set is Pharmaceuticals and Biotech, about 40% of our revenue. Our other three end markets continue to be very important and we have good positions there as well. When I think to the future, we see funding accelerating in our end markets because of COVID. And let me dive a little bit deeper. So when you look at the COVID-nineteen impact on our end markets, in the near term, it's pretty meaningful.
There's been reduced customer activity due to COVID-nineteen related disruptions, and we're all aware of that. But for Thermo Fisher, that's been more than offset by the demand for COVID related products. As I think about the longer term, we're very bullish about what the future holds. While some customers will have some level of recession or impact, largely we see this as a very positive for our markets. We see increased investments in diagnostics, in the development of therapies and vaccines.
We see really strong public and private partnerships as well as a focus on strengthening health care systems around the world. All of those trends should bode very well for the end markets we serve. So the markets that we play in are attractive and our competitive position is unparalleled. When you look at our 4 segments, we have leadership positions in each of the segments that we play. And when you look at it in pictures, the incredible set of capabilities that we have really are so valued by our customers and puts us in an enviable position going forward.
So that's the first reason why we're so excited for the future. The second element is our proven growth strategy and that growth strategy allows us to drive share gain. The growth strategy is focused on 3 elements: our commitment to high impact innovation how we leverage our scale in the high growth and emerging markets to drive share gain and the benefits of our unique customer value proposition. So let me delve into each of those three areas to give you a sense of the strategy and the progress that we've made in the last year, starting with our commitment to high impact innovation. As you know, our R and D approach is focused on a few elements.
The first of which is that in each of our disciplines, we focus on having the best teams with the best capabilities to innovate the products and services that our customers so much want. And at the same point, we complement that by coordinating those efforts across the company where relevant to be able to bring out new and innovative solutions that no one else can do. Because of our customer access, we get unique insights from our customers that allows us to target our funding in areas that make the biggest impact going forward. When you look at the R and D strategy, it results in launching best in class products, enabling our customers to have new scientific discoveries, which fuels momentum in our markets. And ultimately, we are able to take the life science tools and move them into the applied and clinical markets.
When you look at the progress we've made in the past year, just a small sampling of some of the exciting products that we've launched since our last Analyst Day and the benefits of our high impact innovation strategy, Whether it's our COVID-nineteen QPCR test kits, the very strong American Society of Mass Spectrometry that we had this year, launching 2 new EXPLORIS instruments in the area of cell and gene therapy, launching our cell processing system. In electron microscopy, you know us not only for our instruments, but also improving the capabilities through a new imaging filter. And in next gen sequencing launching the 1st turnkey NGS system that can deliver results in a single day. Our high impact innovation strategy is driving great success for Thermo Fisher Scientific. The second element of our growth strategy is the benefits we get from leveraging our scale in the high growth and emerging markets.
Our customers see the benefits of the unique depth of capabilities that we have in our industry leading scale. They see the power of our leading commercial organization, our e commerce platforms, the benefits of our world class supply chain to serve them. And in our larger markets, the ability to localize R and D and manufacturing to be able to meet their needs. The industry leading scale and depth that we have creates a differentiated experience for our customers and allows us to gain market share. Today, our revenue in those markets are $5,500,000,000 strength across the major geographies, and they now represent 21% of our total revenue for the company.
I thought it'd be worthwhile giving you a quick update on 2 of our major markets that we're focused on, China and Korea. In China, we continue to really have a very strong position. Over the past decade, we've averaged 16% organic growth and we've built a business that's almost $3,000,000,000 in size. We're very well aligned with China's 5 year plan and the governmental priorities and that's allowed us to have excellent performance. And we're investing for the future so we can fuel a bright outlook.
We opened a new pharma and biotech customer solution center in Shanghai. We're expanding our clinical trials capabilities in Suzhou all to position the company to grow aggressively in serving the China market. When I look at more recent events, we're starting to see China pick up in terms of activity as we look at Q3. Turning to Korea. We built a business that's averaged 14% growth over the past decade, over $500,000,000 in our revenue.
We're very strong in the key markets within Korea, whether it's the biosimilars market and serving the pharmaceutical and biotech industry or whether it's in the materials market where we have a major presence in lithium ion battery production or in the semiconductor industry serving those customers. And I love the picture to the lower right, which is President Moon of South Korea being demonstrated one of our electron microscopes that's being used for semiconductor research. The 3rd element of our growth strategy is the benefits of our unique customer value proposition. Our customers know that they come to us to accelerate their innovation and enhance their productivity. And everything we do at the company is underpinned by quality.
We leverage the unmatched customer access we have to serve that customer base, and we're constantly focused on increasing our share of wallet by doing a good job and earning those opportunities going forward. We launched a steady stream of new products, we expand our offering through acquisitions and we continue to bring out new service capabilities to meet their needs. I thought I'd dive a little bit deeper in our largest customer set and how this comes to reality. Over 40% of our revenue is in the pharma and biotech industry, over $10,000,000,000 of revenue last year. We've averaged 9% organic growth over the decade in serving this customer set.
Our customers know us from having the leading life sciences offering that spans research and development all the way through to bioproduction. And at the same point, we have the leading CDMO services in contracting development and manufacturing opportunities for those customers. We're uniquely positioned to partner with our customers from the molecule all the way to the production of medicine. Because of the unique customer insights that we have, I thought I would dive a little bit deeper and talk about our CDMO capabilities. Back in 2014, 2015, the way that we serve the market in pharma and biotech from a CDMO perspective was through about $1,000,000,000 business, primarily around clinical trials.
What our customers were telling us back then was that innovation is happening more and more in the smaller companies in the field and that those companies didn't have the infrastructure to do this all by themselves. At the same point in time, the large companies were saying that their pipelines weren't well aligned with their manufacturing assets and their expertise. And they were looking for more partners to help them advance their pipelines. We were very bold in expanding our capabilities. We made acquisitions, we invested internally.
And today, because of the trusted partner status that we have, we built a business that's over $4,000,000,000 in scale, growing organically in the high single digit, low double digit type growth rates. Our strategy is focused on relentlessly making sure the best quality in the industry. We're investing in capacity to meet our customers' needs and continually enhancing our capabilities to be aligned with their future demand, such an incredibly exciting part of how we enable our customers to achieve their innovation objectives and their productivity objectives. So that's our growth strategy in a nutshell. Our focus on high impact innovation, the benefits we have of our leading scale in the high growth and emerging markets and the power of our unique customer value proposition.
The third element of why we're so well positioned for an even brighter future is the power of our PPI business system that enables our operational excellence and speed at scale. PPI is how we work, right? You know us for the culture of continuous improvement, but our business system is also about our commitment to doing business the right way. And I thought I would delve into both in a little bit more detail. When you look at PPI and you look at the right hand side of the slide, what you see is the internal focus, the constant drive for making a difference every day and a focus on quality, productivity, customer allegiance.
Externally, what that leads to is a huge impact from our PPI business system. It accelerates our organic growth. It expands our margin. It enhances our cash flow and allows us to deliver outstanding financial performance. But PPI isn't just how we run the company, it also enables doing business the right way.
When I look at our focus on environmental, social and governance issues, it all starts with our mission, right, which is to enable our customers to make the world healthier, cleaner and safer. We have put tremendous effort in making sure that our products are relevant for society and that how we run our company is ensuring that we do it in a sustainable way to make sure that we have a bright future. We focus on our operations, our colleagues, our communities, the environment, all doing business in a way that is aligned with our strategy and material to our stakeholders. I thought it'd be important to give you an update on some of the progress we've made in ESG topics in the last year. If you look at 2 examples, the first of which is our focus on reducing our carbon footprint.
And our goal is to reduce our carbon footprint by 30% during the course of the decade. And if you look at it, we have so many examples within the company of how we're redesigning our operations to lower our environmental impact, that we're investing to make sure that our sites are more efficient, and that we're sourcing our energy in such a way that we're making great choices, a very strong commitment to solar energy are all examples of the things that we're doing today to create a brighter future. When you look back at the last year from a way that we impact our communities, we've always had a focus on STEM education, right, and making sure that the underserved communities benefit from our work. When the tragedies happened this spring in Minneapolis, we redoubled our efforts. We want to make sure that we were making a difference.
We launched a $10,000,000 foundation for science to accelerate our efforts around STEM education. We enhanced our programs that empower our colleagues to support social justice issues. And we dramatically extended our collaboration with the Historically Black Colleges and Universities to be able to help them navigate the pandemic. We're contributing $15,000,000 of our COVID-nineteen related test kits and instrumentation to allow them to be able to bring their staff and their students back to work, which is so important for them to be able to have a bright financial outlook and provide the incredible important educational mission that they have. And we've also increased our commitment to hiring from those colleges and universities as well.
This gives you just a small snapshot of some of the things we've done in the last year in terms of our commitment to ESG topics. The final aspect of why we're so well positioned for a future is the disciplined capital deployment strategy that we execute. Let me give you a quick update, starting with the methodology. Our strategy has been successful. It starts with a rigorous selection criteria.
Then we have disciplined decision making around that criteria. And of course, we have our proven integration processes. The benefits of that discipline has allowed us to enhance the financial and operational performance of our target companies. We're able to have excellent realization of the cost and revenue synergies that we target and ultimately create value for our shareholders. As you know, over the last decade, we've been very active, almost 70 opportunities ahead.
The industry remains incredibly fragmented. So we're excited about our ability to deploy capital in this decade as well. Let me make a quick word about QIAGEN. It shows that there's conviction behind our strategy and that there's discipline. I'm so incredibly impressed with how our team has accelerated our competitive position in both sample prep and molecular diagnostics organically to meet our customers' needs during the pandemic.
Let me talk a minute about one of the transactions that we did announce this year, which is our plans to acquire a brand new facility from CSL that's going to add biologics drug substance capabilities to our company, both from a stainless steel and single use perspective. It's a unique partnership. It has a deal structure that will allow us to both have upfront payments and future payments to CSL as we expand our relationship, and we expect that this acquisition will generate over $300,000,000 a year in revenue by 2024. So we're looking forward to closing this transaction in the middle of 2021. It's an attractive bolt on, so similar to many, many others that we've done over the years.
So let me summarize why we're so well positioned for the future. We have leadership positions in attractive end markets. We have a proven growth strategy that drives share gain. Our PPI business system enables operational excellence and speed of scale and a disciplined capital deployment strategy that creates value for our customers and for our shareholders. So this should give you a great overview of why we're so well positioned for even better things to come.
I've covered the fundamentals. Mark and Michelle are now going to give you the real life example of how this came together to help us establish leadership in the COVID-nineteen response. And then Steven is going to conclude with a view to the balance of the year and our initial thoughts on 2021 and beyond. With that, I'm going to turn it over to Mark Stephenson to kick off the discussion on our role in the response to the pandemic and what it means for our future. Mark?
Thank you, Mark, and good morning to you all. It's a pleasure to be here again with you, albeit virtually, But I'm excited to have the opportunity to update you on the work that we've been doing over the last 6 months. Now you all know our company strategy is about breadth and depth and getting that at scale. But really, this pandemic gave us a wonderful opportunity to really exercise those capabilities. And today, I'll take you through some of the examples of the work we've done.
You just saw this slide in Mark's presentation. You saw the scale of the impact on our revenue. I think what's particularly important for me to bring out here is how by really supporting our customers through the pandemic and their response And by supporting our governments, both globally and locally, we've really enabled our customers that have strengthened the position that Thermo Fisher has with those customers and governments. This is also a very powerful time to illustrate really our mission, which is our purpose for all our colleagues in enabling our customers to make the world healthier. We've enabled diagnostic testing.
We've remobilized and changed some of our factories to make chemicals that can be used for hand sanitizer. And finally, we've enabled our customers to keep going during this time by enabling them with critical PPE. Now there are really 4 parts to the approach that we took in responding to COVID-nineteen. The first part was to set really clear guiding principles for our teams. We have, as you know, a very experienced management team and they set to mobilize to manage those resources during the pandemic.
The second was to ensure that we could really use that scale of depth of capabilities across the company. And so I'll take you through some of the examples of how we did that. What's been incredibly important here has been speed. And so the operational agility that we've driven, we'll give you some examples. Michel will also talk about that later.
While both anticipating that we were going to face headwinds, we've navigated those, but also sees the opportunities in front of us. And then our 4th part was certainly setting us up and continues today and intensely focused on ensuring that we have a bright future going forward. As part of this first part, the principles we put in place were firstly to ensure the safety of our colleagues coming into work and going to our customers. We made sure that we could maintain business continuity during this time. And then finally, we made sure that we are appropriately aligning our resources so that we could manage through the pandemic and come out with an even brighter future.
Here you see one of our sites in Austin and Texas mobilizing to make sample preparation kits as part of our COVID workflow. Now we used our PPI business system as part of these guiding principles. We made sure from a central team that we coordinated our response across the globe, made sure that each site was prepared as they maintained and put in place their preparedness plans. We delivered regular updates for employee, both training and communications and ensured that our operations could continue even during shutdowns and local government regulations. So here you see a couple of sites as an example, one in Italy, which is one of our pharma manufacturing sites, a Ferentino, that continued operating even during the worst of the pandemic in Italy.
Now the second part of our response was in the terms of the global testing, leveraging our scale of depth and also preparing to understand the virus and develop vaccines and therapies that our customers have embarked on.
I'll take you through the first part of this
in global testing and research, and then Michel will talk about the development of vaccines and how we've ensured our customers have kept on going through this time. As we talk about global testing, I really have to bring this a little live for you. When this first came to our visibility as our colleagues in China sequence the DNA of the virus, we quickly mobilized with our capabilities in qPCR to design a very specific assay to make a diagnostic. But what was really truly unique about the Thermo Fisher response was the depth and breadth of our capabilities. We were able to use expertise in our bio sciences department for sample prep, use our clinical diagnostic to make standards, use our regulatory expertise in different areas of the company, bring that all together to very quickly mobilize and get our first product out right at the beginning of March and get regulatory approval.
Since then, our teams have worked around the world at incredibly intense pace using all the capabilities that we have at our disposal. Let me go into depth on a couple of examples on the kit itself and that workflow and the viral transport media, which became a critical part of our response. In the top of this graph, you saw a scaling of the approvals of the kit and the system. So from early March, when we got approval through the FDA for 1 workflow, 1 system, we worked quickly to expand that to really use the installed base that we have globally around the world of our qPCR instruments. So you can see here as we expanded that use case to different systems and expanded that use case.
From early on, you can see on the bottom, we decided we were going to scale up our manufacturing capability. So remember, this was a brand new product that we created in March, and we scaled up to make 5,000,000 capacity and then doubled that to make 10,000,000 capacity by late April. We then continue to scale that up, scaling up and capacity now to make 20,000,000 kits. And just as importantly, we've also scaled hard to scale capacity like instrument capacity. So we're now manufacturing in 1 quarter what we were making in a whole year in terms of qPCR instrument capacity.
So it gives you a sense of the massive scaling that's gone on here. As we look forward, we're also continuing to introduce new innovations. Here's an example. We just started shipping our Amplitude system, a high throughput automated system that allows our labs to scale and run 6,000 assays in a 24 hour period. Really an automated system, we scaled, we have the team here that scaled in about 140 days, 220 people across 21 work streams, 6 businesses really brought together in order to bring this system out in a rapid time, really breakthrough innovation.
And you also see here our breadth of assays will expand. So we're introducing multiplex assays that allow us to test not only for COVID, but flu A and flu B, RSV and also a broad range of upper respiratory pathogens when we're unsure of what the disease might be. Now early on, one of the areas that we also saw critical was some of these ancillary reagents in the workflow. One specific is this highly specialized viral transport media that used on the collection by the swab or the sample into the lab. Now traditional industry suppliers were not able to scale, and so we competed to win a contract from the U.
S. Government to scale up our site in Lenexa, a new $40,000,000 investment that's dedicated now to the viral transport media production and control scaling. We started scaling, we're already up to scaling more than 8,000,000 viral transport tubes per week. And now we're replicating that model and are breaking ground on an additional expansion in Perth and Scotland to support some of our European customers. Now as we move into the research and vaccine development era, critical part, firstly, is understanding the virus, not only understanding the epidemiology, which we've had comprehensive tools deployed, and we've developed new assays, for example, on our next generation sequencing to look at the sequence of the virus and track the different evolution, but also in understanding the virus itself, how it works, how it interacts with drugs.
And so our innovative and critical comprehensive tools are getting used in academic and pharmaceutical labs around the globe. Let me give you one example. One example we've spoken before in technology terms is our cryo electron microscopy, a Nobel Prize winning technology that really is enabling new frontiers in structural biology. An example here in the virus, our researchers are able to look at the atomic level of the virus, not only come out to give the atomic level of structure, but also see the interaction of how the virus works with drugs and with vaccines, really understanding the speed that we can now go forward and move into vaccine development and therapy development. With that overview of our depth and capabilities so far, let me now turn it over to Michel Lagarde, who will take you through the next phase we're working on, which is the development and production of the vaccines using our products as well as our pharmaceutical capabilities.
Michel?
Thanks, Marc. Good morning, everybody. This is really an amazing slide when you see how comprehensive our response has been to the COVID pandemic, from the incredible scale up and testing to the application of our tools and research and the part I'll take you through, which is how we support our customers and the development and production of vaccines and therapies and the material role we're playing in providing essential PPE. Just like all of you, we've been super impressed by the industry's response to this COVID challenge. Biotech and pharma coming together like never before, funded by governments like never before.
And it's really been incredible to see the mobilization of scientific talent and resources to fight this virus. We knew early on that we, as the world leader in serving science, had an incredibly important role to play, and that's exactly what is transpiring. As you can see, we're now involved in over 250 projects supporting our customers on COVID-nineteen related programs, and those will generate over $1,000,000,000 of revenues for us in the period to come. Equally important, we still have a very extensive pipeline of future opportunities that we're working with customers on. So we're confident that in the next months quarters to come, we will add to this project count and dollar impact.
So what does our involvement look like? 1st, we're helping our customers with providing development and production services. And it's important to know that pre COVID, we had built real core expertise on taking processes into development to optimize them and then scale them up on for commercial use and scale them up to the satisfaction of both the customer but also the regulators. And as a result of all of that capability, we have launched more new products out of our CDMO than any provider or innovator, and that core competence is what's so critical now as people are trying to rapidly develop new therapies and vaccines. We also enable bioproduction by our cell culture media, all of our single use capabilities and then we're investing and partnering with governments to make sure that critical capacity is made available.
Marc Gasper earlier showed a slide where we depicted our capabilities for pharma and biotech. And it's important to keep that in mind because here in this vaccine example, you can see how that plays out. He talked about our leading life sciences tools and products, our bioproduction capability and our world class CDMO services, and that's what you see here on the slide. This is a vaccine example, and it's amazing how quickly all of us have become experts in the different types of vaccines, and our capabilities support all of the different categories. This is a live virus vaccine example.
And you can see that our products play a critical role across the workflow. You can see our reagents, our single use capabilities, but also, for instance, ultra low temperature freezers that have been in the news in the last couple of days. All these important products exist along the workflow of vaccine production. And then our services. Our world class CDMO offers critical service in creating the drug substance, making the viral vectors, but also doing work on the drug product side where we provide sterile fulfillment services, but also logistics, storage and distributions.
And all of these areas have been critical priorities for us in terms of investment and scale up all prior to COVID. I think the fact that we've been focused on adding and building these capabilities for a long period of time allowed us to materially support our customers in this period. Then we're partnering with governments, which is really a new phenomenon in this part of the business. And obviously, we've seen governments getting involved and making sure that supply chains are secure. And our agreement with BARDA here in the U.
S. Is a good example of that, where we will be providing live virus filling capacity under a long term agreement. And we have very similar conversations that are near completion with other governments around the world, and we expect in the weeks months to come to announce, sign and activate similar partnerships with governments around the globe. Now switching to our role in PPE. Our channel team really stepped up.
This proved to be an enormous challenge where demand, as you can imagine, skyrocketed, supply was constrained, and the team did a wonderful job navigating those challenges. I think we really showed that the scale of our business, the long tenured supplier relationships and our reputation really helped us to enable our customers in continuing to produce, continuing to keep their labs open. And this turned out to be a really differentiated capability as evidenced by the fact that in addition to serving our existing customers, we are now serving over 2,500 new customers that obviously were let down by their existing providers and came to us in these critical times. We're supporting governments on their stockpile strategies, and we think all those efforts materially contributed to the goodwill created with this customer base. So hopefully, through Mark's slide and the couple of ones I just went through, you get a good sense on how we responded to COVID demand and the incredible comprehensive nature of our response.
We think it's a perfect case study of speed at scale. On the one hand, acting really agile, nimble, course correcting and at the same time, combining that with the enormous scale and resources and talent and in capability. And those two things combined mean big impacts, and I think that's what we've demonstrated in the last 9 months. Next, I'll take you to the 2 remaining parts of our COVID-nineteen response. 1st, navigating changing demand.
We saw this early on in China, where very clearly the virus was impacting different customer segments in a different way, different businesses in a different way. And it created this environment of low visibility and high volatility. And normally, then you're at risk of freezing up, too much change going on at the same time. And I'm proud to say that our team, thanks to the experience that exists in our management team, the relatively flat organizational structure we have and our PPI business system allowed us to navigate it very successfully, really lean in, problem solve and importantly, make decisions. That's what we did also in our cost reduction program where we initiated a very comprehensive across the company a rapid response.
And I think using scale of the company to reduce our cost base allowed us to have a meaningful contribution from the program rather than just focusing on those businesses that were confronted with demand drops. This cost reduction program allowed us to also have the confidence to invest into those areas that we're seeing incredible societal need. And you heard those in the previous slides that we presented. And then lastly, we stayed super externally focused, constantly checking in with governments and with our customers. We have unrivaled senior level access at these customers and honestly sort of amplified by this whole work from home situation where we had real access to these customers on a frequent basis.
It allowed us to constantly check-in, make sure we understood their changing priorities and adapt our response and action plans accordingly. The danger of an environment like this is that you focus internally and be that the opposite. Customer centricity was strengthened in this period. So what does all this mean? Well, 1st and foremost, we learned that what we do matters.
That's not a new insight, but certainly one that got validated over the last 9 months. I think we were fortunate that other than some competitors who retrenched, slowed down or even stopped investments, we accelerated. Our response, both in terms of cost management but also in terms of satisfying the COVID demand, allowed us to actually invest in this period in critical capacity but also accelerating and advancing critical R and D projects. That sets us up well for the future and continuing to strengthen our leadership. We materially strengthened our position in infectious disease and diagnostics.
You heard about the incredible scale up in testing capacity, but we also shipped thousands of qPCR machines that are now part of the installed base and will provide meaningful solutions even in a post COVID world. And then lastly, we focus on our customers. We prove to them that speed and scale combined are a powerful mix. And I've stopped counting the number of thank you notes I got from customers saying because of the Thermo Fisher efforts, we were able to keep our production sites running or our labs going or thank you for supplying these critical medicines uninterrupted. This is a customer base that has long memories and acts loyally.
And so we think that the incredible efforts of the team over the last 9 months really sets us up well for this future, a future where we will continue to provide meaningful products and services to these important end markets. Everything we've talked about thus far, all the achievements, all the capabilities are done by these amazing people. Our team Thermo Fisher, almost 80,000 strong, this is an amazing family to be part of. COVID really provided the world with an incredible challenge, and our team stepped up. Push through.
That's who we are, problem solvers and doers. And in this low visibility, high volatility environment, we excelled. I think we gave you plenty of examples of speed at scale and its power. And the 4 of us feel privileged that we can represent them to you today, but these are their achievements. This is their passion and intensity shining through, and this is our opportunity to say thank you to them.
So how does all this passion translate to our financial performance? For that, I'll hand it over to Stephen.
So thanks, Michel, and good morning, everybody. I hope that you're safe and healthy. It's my pleasure today to give you the financial context behind that consistent excellent strategy that Mark outlined and the consistent excellent tactical execution that we've been delivering that were brought to life by Marc and Michel. We bring all of that together to deliver exceptional financial returns, not just in the past, but for many, many, many years to come. I wanted to take a moment to talk about the agenda today.
This is not your usual Thermo Fisher Analyst Day. We're in the middle of a pandemic, so we're in a number of usual times. So I don't have full year detailed guidance. And as a result, we don't have a detailed 3 year financial model to share. But I'm very excited to share with you an update on how well we performed in 2020 so far and then the outlook for Q3 and the strong performance that we're going to be delivering in Q3 and initial take on that continued strong performance in Q4, which will wrap up a truly exceptional year for Thermo Fisher Scientific.
And then I'll share with you some thoughts around the environment for 2021 to help frame that up in some detail. I'll provide some more financial thoughts around that after we close the year of 2020 as we get into early 2021, but helping with just some ideas around the business environment I thought would be helpful. And I'll finish with why we're so excited about the long term financial future for the company. So before I get into those details, let me cover some slides in terms of framing of the company. And I'll start with a very attractive revenue profile.
Dollars 26,000,000,000 of revenue, think of it in 3 different ways from an end market standpoint. We serve 4 very diverse end markets, all with good market growth prospects, and we're really well positioned with our growth strategy to take significant share over time. And we have really good concentration in pharma and biotech. That's the fastest growth end market and the area that we have the most opportunity to take share. So very attractive end market perspective of our revenue.
Then by type, approximately 75% of our revenue is recurring in nature. That's a really good position to be in when times are good and also great position to be in when you're in interesting times like we are right now. And then from a geographic standpoint, we are where our customers need us to be. They're at scale to help supply the right services, consumables, instruments and technical support to make them successful wherever they may be. So revenue profile, very attractive.
Then you take that revenue and you split it by our segments and you see the businesses within our segments, what the slide tells you is we're big and we're broad. So what does that mean for a customer? We're very relevant for our customers. That scale relevance, we turn into commercial insight, so we don't miss opportunities. So each of these individual businesses on this page know what to do and how to approach our customer.
Then from a scale and relevance in terms of R and D, we get unique insights from our customers. And we turn that into great return on investment for our customers in terms of R and D and great return on investment for our shareholders from an R and D standpoint. Then the other aspect about scale is that we use our PPI business system across the company to make each of these individual businesses execute at a really high level of operational execution that makes a material difference. When you bring all of that together, we deliver exceptional financial results. And this is the 10 year snapshot looking back that Mark mentioned.
In each of the three metrics here, we performed at an incredibly high level. Additional metric for you to consider is organic growth. Think about the 10 years kind of look back here, we've accelerated the organic growth profile of the company. Mark talked about a proven growth strategy. Well, this is the proof.
We're executing at a really high level, tapping into strong markets and then gaining share along the way. That creates great organic growth, and that sets it up really, really well for a very bright future. So that's a quick framing of the company. Now let me get into the details of 2020. That 1st 6 months of 2020 at times felt like 6 seconds and at times felt like 6 years.
And it was a very dynamic environment. I think we navigated the company very successfully to deliver for all of our stakeholders through that period of time. So I've split the slide into 2 pieces, Q1 and Q2. So you can see how as the pandemic progressed in terms of impact, we stood up the response to the pandemic, and we enabled our customers to be successful. Early on in Q1, we mitigated the impacts, the initial impacts of the pandemic by controlling costs appropriately and then executing at a really high level in terms of commercial execution.
And then as you heard in the last presentation, we stood up the response. And then as we went into Q2, as the pandemic increased and impacted around the world, we stepped up our response. And you can see the multiple levels here where we actually stepped up that impact. And I think the team did a great job of highlighting how fast we did that during the first half of this year. And at the same time, we enabled our customers to be successful when they saw significant disruptions to their end customer demand.
So as countries went into lockdown, certain customers needed to stay open, and we enabled them to be successful by staying open ourselves to supply them and continue to supply them. As they ramp down their operations, as they ramp back up their operations as we come out of the pandemic, we're positioned to help them do that. All of this brought together in the first half of the year translated into exceptional financial results. Think about we're in the middle of a pandemic and we can deliver this level of performance in the first half of the year. I think that shows you that we've effectively navigated through a very dynamic environment.
But what we've done is also stood up great success going forward as well. And I'll talk about the second half of the year in a second and how these results are going to be even stronger in the second half of the year, and then we're making a meaningful impact from 2021 beyond. But I wanted to take a moment and say, how do we do this? So you heard in the last presentation, we've demonstrated speed at scale. We're a big company.
Big companies are supposed to be slow. They're supposed to get in their own way. And what we've proven in the 1st 6 months of the year is that that's just not true about Thermo Fisher Scientific. We've been dynamic. We've been nimble.
We've been very focused on our customers. We've enabled success. So the how. Well, first of all, we were ready. It's been a long time since the last recession.
The teams that managed their businesses back then have grown in their careers, but we've made sure we passed on the wisdom of how we managed them such that when it happened right now, our teams knew what to do. And then just as importantly, they knew what not to do, what to stop doing. That stock prioritization is a bedrock of the PPI business system. I think we use that prioritization really well to focus on the right areas and execute at a really high level. And as Michel mentioned just earlier on, we stayed very focused on our customers to enable their success.
And our customer centricity is also a key enabler here. And then look at the takeaway in the bottom of this page. Mark talked about the scale of our response revenue. We're on track to over $4,000,000,000 of response revenue in 2020. In terms of context, that would be on a stand alone basis, that would be the 5th or 6th largest life science tools company in the industry.
That's the level of impact we've had on society, on our customers. And we're not done here. We're going to have a meaningful revenue stream in 2021 as well in terms of the response. All at the same time, we mean managing our customers and helping them be successful through a period of significant disruption, and we've invested for the future. That's speed at scale.
It's been very humbling to be part of a company that can do this. And we're here to do this again and again in the future in terms of how we're operating this company. So now looking forward, Q3. On the left hand side of this page, you see the organic growth outlook that we gave you back on the earnings call in July. It would have been a very strong quarter, 15% organic growth.
And I'm pleased to tell you that 10 weeks into the quarter, we're now in a position to think about the organic growth for Q3 as being 24%, so go from 15% to 24%. And really, it's all areas of the company are performing better than we anticipated back in July. The response revenue is materially larger. And then the performance of the rest of our business is significantly stronger than our original expectation for the quarter. That's a really positive continuation of great trajectory that we've been on.
But we're not done in Q3. Our initial view on Q4 is it's another strong quarter of top line growth. So our initial estimate for Q4 is in a range of 13% to 27% organic growth. So continued impact of the response revenue and the performance of the rest of the business also continuing to improve, and we expect that to be getting to a positive growth in Q4. It's a great continuation from Q2 to Q3 to Q4 across the business.
Bringing all this together, that will be a full year outlook of organic growth of 13% to 16%. Dollars 26,000,000,000 company growing 13% to 16% in the middle of a pandemic. I think we're on track for a truly exceptional year. So now I'll turn to 2021, and I look forward to giving you a lot more detail around our thoughts around 2021 after we've closed out 2020. But for now, I wanted to give you some framing thoughts about business environment that we'll be operating in.
Split the page into 2. I'll talk about the response revenue in a second. But first of all, the business outlook. And first part of this page is we're going to continue to take share. So we're very well positioned with our growth strategy.
As Mark out as Michel outlined, we've stayed close to our customers and they'll remember us. I think that just adds a bit more momentum to the growth profile in terms of share gains. So well positioned from a share gain standpoint. From a market growth standpoint, it's likely to be a very strong year for market growth across the industry. We've got very easy comps from 2020.
And the exact scale of how good that year will be will really depend on how 2020 plays out and then how the pandemic plays out in 2021. But under most scenarios, it looks like it's going to be a very good year from a market growth standpoint. And remember, on top, we're going to be gaining share as well. And some specifics around our end markets. From a stimulus standpoint, clearly a lot of governments around the world are looking to stimulate their economies.
We'll be well positioned to help our customers there. Industrial end markets are likely to remain somewhat muted during the year. But pharma and biotech, as a reminder, that's our largest end market by in terms of revenue scale. Expect that to have continued strong growth trajectory, just like it was in years before as well as in 2020 and now in 2021. From a response revenue standpoint, key takeaway is we're going to have a meaningful impact.
The exact scale of that will depend on kind of year over year, will depend on how 'twenty plays out and then the impact of that pandemic and how that influences the year going forward. But we're really well positioned to help support our customers and their needs. As Mark Stephenson outlined, we've got a great installed base of testing capabilities for our customers, the workflows, the instruments, we help them with lab developed tests. So we're likely to have a meaningful revenue stream there. And as Michel outlined, we're really well positioned to help our customers with vaccines and therapies as well.
So bringing all that together, it's likely to be a very strong year for Thermo Fisher in 2021. I look forward to giving you more details in the next 6 months. So now looking forward. Last Analyst Day that we did was May 2019, and we put forward very strong compelling financial future for the company. As I think about how we've navigated the company and the current situation, we've just made that future even stronger.
I'll share with you some 2 slides around the thoughts on that long term future. The first is around capital deployment. And I think the first takeaway is we have a lot of capacity to deploy over a period of time. Our balance sheet is very strong. Cash flows are very strong.
So we're really well positioned from a firepower standpoint. And then as Mark mentioned, we're in a very fragmented industry. We're a very disciplined acquirer of companies. Our primary focus is going to be on M and A. We think we can add significant shareholder value through M and A.
But we'll also be disciplined in terms of the mix of capital deployment, and we'll be doing buybacks as well as continuing to increase the dividend over time. So that balance of effectively deploying substantial amounts of capital will enable us to drive substantial shareholder value over time. And finally, bringing all these presentations together from a financial standpoint, the key messages are pretty clear. We serve great end markets. We're well positioned to gain share.
We have the operational discipline in PPI to take that strong top line growth, translate it to strong profitability and cash flow, use those cash flows on the balance sheet to deploy substantial amounts of capital. And we do all of that, we deliver exceptional financial results with really strong adjusted EPS growth and very strong returns on invested capital. So that wraps my presentation. I think you'll agree that the long term financial profile is very compelling. I'll now hand it over to Mark to give you some final thoughts on the day and then get into the Q and A session.
I look forward to interacting with you during the Q and A. Thank you.
Thank you, Stephen. And let me summarize briefly the takeaways of the morning and then I look forward to the Q and A session. As you heard, we remain exceptionally well positioned for an even brighter future. Consistent with our mission, we've ramped up rapidly and mobilized to enable the societal response to the pandemic. And as Stephen just highlighted, we're effectively navigating the current environment to come out of this period an even stronger industry leader.
I look forward to your questions. Let me turn it over to Ken to go through that.
Thank you, Mark, and thank you to all the presenters. So, we're at the portion of the program where we're going to open it up for Q and A. So we have an operator that's going to assist in that process. So operator, can you hear me?
Certainly. Our first question is from jajikumar with Evercore. Your line is open.
Hey guys, thanks for taking my question. And Mark and team, congratulations on execution. I know it wasn't easy to host an Analyst Day in the midst of a pandemic, but appreciate the efforts here in giving the Street some color on how to think about the business. I had two questions, one on COVID and one on a bigger picture question, Mark. I guess starting with the COVID tailwinds, dollars 4,500,000,000 for 2020, feels like that came in well above Street expectations.
I'm curious, is that all diagnostics? Was there any vaccines baked into the 4.5? And I guess, when you think about 2021, I guess the comment was meaningful tailwind expected to continue into 2021. But on a dollar basis, is that above this 4.5% that we saw in 2020 or perhaps below or any color on how to think about the tailwinds, I think that would be a helpful starting point.
So, Vijay, thank you for the question. So, as I think about the response revenue, right, the scale is obviously at $4,500,000,000 is incredibly substantial. And that's predominantly our testing related revenue, the instrumentation, the sample preparation, the kits, the LVTs that we enable, that's the largest proportion. But we also had, as Michelle had highlighted, the sales of PPE and other products to our customers and as well the beginning ramp up of our pharma services revenue. As we look to 2021, the pharma services revenue, the development and the production of vaccines and therapies, that number starts to ramp fairly substantially in terms of magnitude.
And we still expect a meaningful role and a meaningful amount of revenue coming out of all the work that we do in testing. So the question is exactly how that compares to the $4,500,000,000 Hard to know right now at this moment in terms of what that scale is. But I think we'll be in a really good position as we go into the year end to have a sense of what that number is. And I could see scenarios that that number is very large. I could see that scenario where the number is a little bit smaller than what we have today.
And we'll figure that out as the year plays out.
Just on the top point, Mark, on pharma services ramping up for next year, I think one of the slide had this 250 projects with $1,000,000,000 of revenues over time. Is that sort of a peak revenue or total revenue potential? Because I guess one of the things that the suite struggled with is if diagnostic testing is 4 plus $1,000,000,000 could Pharma Services be equivalent or perhaps bigger? How should we think about that pharma services bucket?
Yes. So the way that we've calculated it is the committed activities that we have from our customers, right, as opposed to what might happen or how big it can be because some of these medicines and some of the vaccines will be successful hopefully and others probably won't. And therefore, it's hard to know what the total magnitude is. The reason that we wanted to give you the $1,000,000,000 number to at least be able to frame, how we see it for sure. And we see scenarios, obviously, depending on which companies and what the mix is that that number could be meaningfully above it as well, but it's too early to tell at this point.
That's helpful framing that those who are committed to orders, Mark. Just maybe one big picture one, Mark. I love the past 10 year, the slide you guys put up. I think this core compounder piece, it's hard for us when I'm looking at the next quarter revenues, it's hard to take a step back and look at a 10 year framework. If I think about the 2 big picture trends over the last 10 years, biopharma, CVMO, you guys saw these trends, right?
And you rightly deployed your focus your capital allocation towards those fashion growth areas. So if I look at your organic, we started the decade at 3% to 5% and then ended at 5% to 7%. Given that biopharma is now 42% of your revenue mix rate, should that I guess, removing COVID, right, is that underlying 5 to 7, is that accelerating for Thermo just given your mix? And I guess when you look at the next decade, right, I mean, thermal is much bigger, your $25 plus 1,000,000,000 of revenues. Maybe talk about what kind of big picture trends are you seeing, Mark, which perhaps gives confidence to the suite on this core compound rothesus should be sustainable for the next decade?
Thank you.
Vijay, thank you for the question. So we're incredibly well positioned for the decade that we just started, right? And when you think about our 5% to 7% growth that we talked about over the last few years, right, that's a blend of the market growth that we have. And we said it's about 3% to 5% and our objective to grow 1 to 2 points faster than that in terms of share gain. If I look at the actions that we've taken, the investments we're making in this year during the pandemic to create a brighter future, obviously, we're very well positioned to continue to drive very strong top line growth.
We're obviously on track to do much better than 5% to 7% this year. So that puts us in a great spot entering the decade and we'll continue to position the company for excellent strategic position and great financial performance. And as you mentioned, the larger exposure that we've built over time organically in the pharmaceutical and biotech business or that customer set obviously is a fastest growing customer set that does create tailwinds over time. So Vijay, thank you for the question.
Our next question is from Tycho Peterson with JP
Mark, I actually just want to pick up where you left off on the longer term outlook or lack of 3 year outlook at this point. But do you see the underlying market growth changing? Obviously, we're in a better NIH funding environment next year. There's a lot of talk of a handle effect from COVID. So do you see the underlying research market growth changing over the next 3 years versus what we've seen in the last couple of years?
Yes. So Tycho, thank you. In terms of our view on the funding acceleration, right, I think areas like the National Institutes of Health and the similar bodies around the world, I think that you'll see very strong funding environments, right? When you think about National Institutes of Health and you think about the scale of in the U. S.
Is roughly a $40,000,000,000 investment relative to the magnitude of the total budget. It becomes a small amount of incremental money, makes a big difference in our industry. So I think that bodes well. And certainly in our congressional discussions that we've had, there's great excitement around what the NIH is doing. So I feel very positive about that.
And when I look at how the pharmaceutical and biotech industry has responded to the pandemic and how it has mobilized, I think that creates a positive funding environment as well in that customer set. So I'm very excited about what the future holds. And obviously, there's always going to be some level of recessionary and GDP impacts. And on the longer term view, that'll ebb and flow as the economic growth. But in total, we see very bright future for our end markets and of course, our competitive position.
And then a follow-up on the COVID opportunity. I appreciate all the color on the vaccine and therapy tailwinds. As we think about the $1,000,000,000 you laid out, can you just talk to how much of that is the CDMO service work versus bioprocessing equipment at consumables and over what timeframe? And then on the testing side, a couple quick ones. There's been some quality issues on the antibody test.
I'm wondering if you could address that. Also any plans to enter antigen testing? We've seen a number of your peers roll out low cost antigen testing. And then lastly, Amplitude, how do you see that fitting in? There are obviously a number of high throughput fully automated analyzers.
So how do you see Amplitude fitting in competitively in the market?
Yes. So I'll start and then Mark Stephenson will talk a little bit about Amplitude. So in terms of some of the thoughts, the $1,000,000,000 of revenue in the CDMO portion our business, that should happen over the balance of this year over the next couple of years. The majority of that's going to be on the CDMO side, less than half will be bioproduction in terms of our cell culture media purification and the single use technologies, but it's going to be meaningful, right, in terms of that activity. So quite a number of projects there.
We're excited about our testing offering and the expansion you saw some of that viewpoint. And as a reminder, our channel business actually represents some of the antigen companies already. So we'll get some of that revenue. And Mark, why don't you discuss quickly your thoughts on Amplitude?
Sure, Mark. Thanks, Tycho, for the question. So what we saw from our customers is a continual need to automate their labs, speed up their throughput, and that's really what we're delivering to them with Amplitude. So we've had very strong initial demand coming through to really get up to this 6,000 a day capacity, which as we enter into the fall and the winter season, I think will be very important. So excited about what we have with the Amplitude system.
Our
next question is from Jack Meehan with Nephron Research.
Thank you. Good morning. So Mark, I was hoping you could provide a little bit more color on the durability demand for COVID-nineteen testing. Just what are you seeing in the market today for PCR and how do you see that trending into 2021? And also, could you just comment on the interplay between PCR and antigen?
Just how do you see these two markets playing out? Do they overlap? Are they separate? What's the role for each?
Jack, thanks for the question. So if you look at the Q3 outlook that Stephen articulated, obviously, you saw the base business get better, but you obviously saw the COVID response revenues increase from about 1,100,000,000 to about 1,600,000,000 and the predominant driver within that is the demand for our testing solutions, right. Everything from the viral transport media that Mark described through the PCR testing, right. So demand sitting here in mid September was even stronger than we anticipated. We obviously anticipated strong demand at late in July.
So that's very encouraging. Looking forward and in the discussions that we have with our customers, they're expecting to be active right in the Q4 and which is why we started out with a very strong expectation on COVID demand as well. And we view it as antigen testing is quite complementary because there are some applications that the antigen testing is going to be widely adopted to kind of some of the back to life things. But there's so much confirmatory testing that you're likely to see and so much medical based testing around COVID. We would expect that PCR is going to continue to have robust demand for the foreseeable future.
Your next question is from Derik De Bruin with Bank of America. Your line is open.
Good morning, Derik. Hey, good morning. So, Mark, a couple of questions. I guess the first one is, I was sort of struck by your comments on the diagnostics market and the fact that you're adding new PCR machines, you're making it you've sort of become a much bigger player in the overall molecular diagnostics market. Plus you've been doing a number of deals in the companion diagnostics and MGS and genomic space.
I guess how do you think about the diagnostics, especially diagnostics business now? And you've historically avoided doing M and A transactions for box companies and such in that space, Fatty will be sort of being the last one. How do you sort of see about your diagnostics role evolving now and sort of like where is the trajectory for that business?
Yes. So Derek, as you think about how we serve the diagnostics and healthcare arena, right, we have chosen a strategy of having very strong positions where we choose to play, right. So leadership in transplant diagnostics, incredible sets of capabilities from a sequencing perspective around oncology, driving mass spectrometry or life sciences tool into the clinical applications, given our strength and understanding of the markets. And obviously, we've always had a major role from a genetic sciences through our PCR and Sanger sequencing capabilities. And that's really come to the forefront during the pandemic.
When I look to the future, we have a good organic outlook for this business. We've strengthened our competitive position. We've earned incredible trust and relationships with our customers. And that gives us opportunities to expand our offering through product development, looking at inorganic opportunities as well. And we'll continue to build out our specialty diagnostics capabilities over time.
Great. And just two quick follow ups. One is some specific comments on the academic end markets, particularly in the U. S, where are your customers in terms of their lab openings? And then another one, as we think about your fill and finish business, what sort of is a good sort of like average revenue number to think about on a per dose basis?
Or what could Thermo could potentially get?
That's always my favorite question, the latter one. But in terms it's very hard to extrapolate the fill and finish to a specific number per dose because first of all, the number of doses in the vial varies tremendously based on how much volume of the vaccine that you get. So when you think about that $1,000,000,000 of revenue in the CDMO, a meaningful portion of it comes from our sterile full finish activities, but so does our bioproduction activities and we're involved in the drug substance work as well, both on API and on biologics. So that's kind of a comprehensive number. So it's hard to say what's the cents dollars per dose.
It's not it depends very much on the particular vaccine. And remind me, Derek, of the first question again. We might have lost you. So sorry if we oh, academic segment, I remember that now. So when I think about the progression over the last couple of months, we're going to give all the details on our earnings call.
What we have seen is generally the activity level continues to pick up across all of the world and across all of our customer segments. And you're seeing some of the academic customers starting to reopen activities, those that had curtailed it, but we'll provide a lot more color when we do our call in October.
Our next question is from Steve Brujaw with Wolfe. Your line is open.
Hi, thanks for the time here.
Good morning, Steve.
Mark, I
wonder if we could give your unique season as much you have a sense for how you federal governments are thinking about the world. And it's a testing question, medium term, maybe even long term testing question. How as you talk to your customers in the federal governments, are they thinking about MX surveillance over time? And to what extent is this an opportunity for you post COVID, post vaccine?
Yes. So Steve, in the discussion with governments around the world with some of the thought leaders, we expect that COVID testing is going to be around for quite some time, including when the pandemic is considered under control, right? So it's not as if it just magically disappears in terms of the need for testing. And you could envision different use cases over time from a surveillance perspective as well. So we would expect to see an active use of COVID testing for quite some time.
Okay. I appreciate that. I don't know whether to be happy or sad about that, but thanks for the color there. The second one I wanted to ask relates to capital budgets of logical reasons, instrumentation this year is under some pressure. Question going forward for 2021 and maybe beyond, then should people think about up in capital versus things being pushed out?
Is there a way you can generalize about it? Or is it maybe certain more cyclical categories get thought of differently to categories with other sources of funds? And then I'll drop back in queue.
So, Steve, thanks. When I think about capital budgets and I can say what do we believe right now, Obviously, those that are related to the life sciences, driven by the pharmaceutical biotech, the medical type of research that goes on, we expect that funding should be pretty strong, right, which is if you think about all of the positive trends around the importance of the life science research, we think that bodes well for our instrument business, right? Those parts of the sectors that are very purely industrial in focus are likely to be more driven by GDP growth, right? So that's how I would think about it. But I would expect the combination of easier comparisons for us in our instruments business going into next year should be a nice help as well.
Our next question is from Doug Schenkel with Cowen. Your line is open.
Good morning and thank you for taking my questions. My first question really relates to the uncertainty regarding durability of revenue associated with the pandemic, which I think is something we all struggle with and by extension the associated terminal value. So it's definitely helpful to hear your comments on 2021 with what I just said in mind. Recognizing that you did not update your 3 year financial targets, if we go back to the ones you outlined last year, just a simple question, is it fair to conclude that you're confident that your 2022 revenue and earnings will be much better than what you would have expected had it not been for the pandemic?
The answer to that Doug is yes. Let me turn it over to Steven to give a little bit more detail. We're obviously incredibly well positioned versus the May 2019 3 year model.
So Doug, yes, when I think about that last Analyst Day model back in from May 2019, that was for 2020 to 2022.
Two things
to think about that. First of all, we finished 2019 significantly stronger than we were expecting to do back in that May timeframe. So the starting point in terms of dollar standpoint was significantly stronger. And clearly through 2020, we're going to be significantly ahead of how we think about that model. So we're really well positioned to be significantly stronger than the endpoint on that as we're exiting out.
And then going forward, really well positioned as well.
Okay, that's helpful. My second question relates to operating margin. So last year, you generated operating margin, I believe, of 23.4%. In a normal environment, it seems like you would have been on track to generate around 24% operating margin this year and something close to maybe around 25% next year. Just building off of your track record and the multi year targets you outlined at last year's Analyst Day.
The margin profile associated with COVID revenue likely positions you to generate operating margin of maybe around 27% this year, could be a little bit better, maybe not quite that high, but one way or the other, you're around 300 basis points ahead of what I think would have been expected had it not been for the pandemic. At some point, do you face an inevitable margin cliff? If not, why? And if so, what levers do you expect to pull to offset any associated bottom line pressures? Thank
you. Doug, the way that I think about it is, we have always done a good job in managing the company and delivering excellent financial performance. And when you think about the volume leverage we've gotten through the COVID response, right, which is very efficiently and effectively scaling up, we've obviously been able to generate strong incremental margins and you see it in the results. And when you think about the benefits of our PPI business system and constantly looking for a better way every single day at the company, that really puts us in a good position for margins. It's very hard to if you say kind of what's underlying, as we grow, we're going to deliver good margins, but the exact mix in a given year, it's going to be hard to know how it's going to compare.
As we go year by year and eventually we get to the point we can give a 3 year outlook, we'll be able to answer the question specifically about what's the future margins, how does it compare to the 2020 endpoint. But what I do know is that our earnings growth that we're going to deliver over the next number of years is going to be outstanding, just like we did over the past decade. So thank you, Doug, for your questions.
Your next question is from Steve Willoughby with Cleveland Research. Your line is open.
Hi, good morning. Thanks for taking my questions. I have 2. 1, and I apologize if you've already maybe touched on this a bit, but it still wasn't clear to me. So I was wondering if you could just be any more clear on if you think the COVID related tailwinds in 2021 are the same larger or smaller compared to the tailwinds you're seeing here in 2020?
And then just my second question is on the non COVID businesses. Stephen, you made some comments obviously about some easy comps going into 2021. Just if there's any additional color on how you're thinking about the non COVID business in 2021, given the comps that you'll be facing next year? Thank you.
Steve, thanks for the questions. I'll do the first part around response revenue and Stephen, maybe you can comment a little bit about the base business. I see scenarios under all scenarios, I see a very meaningful revenue next year from COVID response. I see scenarios at comparable levels, I see scenarios above the 2020 and I see scenarios below, right? So in a way, it's going to see how the pandemic evolves, what does it look like around the world, how global, where are we with vaccines and therapies.
There's so many variables that it's very hard to pin down the number. So the one thing we do know is the number should be very large and then we'll narrow it down as it gets closer to 2021. Stephen, you want to talk a little bit about the rest of the business?
Yes. And Steve, as you have a similar answer in terms of the rest of the business, it's really going to depend on how 2020 plays out. There's a range of outcomes for the rest of the business in Q4 and that will then set the baseline for 2020. But we've seen that progression of growth from a in terms of the depths of pandemic in the early start of Q2. And we've come out of that as the customers have come back to the workplace.
That's improved over time. But as you look into 2021, we're expecting that to continue. But if the pandemic gets worse and shutdowns happen, then there are scenarios where that could lessen the impact year over year. But in most scenarios as we think about it, it should be very strong growth from a market standpoint and then we've got share gain on top. So we'll frame it up in more detail as we get clarity as to how 2020 finishes and then how the pandemic is playing out in early 2021.
Our next question is from Puneet Souda with SFB Leerink. Your line is open.
Yes. Hi, Mark, it's Steven. Thanks for the questions. So first of all, thanks for your commitment on COVID testing and vaccines and BP, it's quite a lift that you have done over the year. So first question that I have is on priority for the next decade.
Thanks for the presentation, first of all. What was most striking to me was that you accelerated the top line growth while your revenue base has grown remarkably. And the fact that you have grown from $400,000,000 to now $3,000,000,000 in revenue in China over a decade. So, a bit of a high level question. As you look at the next decade, what are the priorities, especially when thinking in terms of sort of capital deployment, areas that you expect where you want to further strengthen and in essence double down and where you are potentially not today, where you can potentially build a stronger position going forward.
So just in the context of the sort of capital deployment, any additional areas and anything geographically or operational priorities that you can highlight here for the next decade looking for any folks who are looking at Thermo today from a 7 to 10 year horizon?
So Puneet, thank you for the question. When I think about our priorities for this decade, it's very simple. Do a great job for our customers every day, right? If we help our customers be successful every single day, that creates the opportunities for an amazing decade ahead. Why we're doing that?
Continue to strengthen Thermo Fisher as a great place to work, right? That's the combination of what our priorities are. When we do that, it opens up opportunities for the future, right? It allows us to be able to deploy our capital to strengthen our offering, open up new opportunities for our customers and continue to build on our industry leadership. So we're incredibly well positioned for the future from that perspective.
So do we have time for one more question, Ken?
Yes. So Puneet, thank you for that. We have time for just one more. Thank you.
Our final question is from Dan Arias with Stifel. Your line is open.
Good morning, guys. Thanks for getting me in here. Mark, I just wanted to follow-up on the capital deployment question on M and A. You guys obviously have a great track record in terms of acquiring things that are cutting edge with the portfolio, but kind of look at the look at the type of companies that are emerging in this sort of next wave of life sciences growth, liquid biopsy, sophisticated genomics platforms, etcetera. When you look out over the next few years, do you envision Thermo making bets on some of the earlier stage assets that have these really high ceilings, but are maybe a bit riskier?
Or is it more about kind of staying the course on this stuff that's a bit more mature, more predictable and kind of in your wheelhouse?
So Dan, thanks for the question, right. So when you think about our criteria, strength of the company strategically, valued by our customers, create shareholder value as measured by not just EPS, but the returns on invested capital that we get. When we look back at the 68 transactions that we've done, right, there have been large transactions, bolt on transactions that have all strengthened the company, some that are very early stage businesses, some that are later stage businesses. So when we look at that criteria, you'll see us do things that strengthen our portfolio that may have a mix of some earlier stage opportunities, but you're not seeing a change in the strategy, right? It's continually evolving our portfolio to make sure that it's best suited to serve our customer needs.
So, Dan, thank you for the final question. Let me wrap it up here with a couple of thank yous. One is thanks for participating today. Thank you for your support of Thermo Fisher Scientific. I also as I want to end where I started thanking the Thermo Fisher team for doing everything that you heard today, putting us in such an enviable position to serve the response amazing team around the world.
I hope that each of you remain safe, healthy, and I look forward to updating you next on our upcoming earnings call in October. Thanks, everyone.