In labs stretching from Illinois to North Carolina and beyond, Thermo Fisher Scientific’s instruments are impossible to miss.
At Duke University, environmental chemist Heather Stapleton says a Thermo Fisher mass spectrometer sits “at the heart” of her team’s research. The same goes for Ph.D. student Rachel Martini, who says about half of her lab’s new instruments at the University of Illinois Urbana-Champaign come from the company.
“They’re like the Amazon of the life sciences,” she said.
For years, Thermo Fisher has thrived on universities’ steady appetite for its products, a demand sustained by the deep well of federal research funding. But that partnership is starting to fray as the Trump administration moves forward with deep cuts to National Institutes of Health (NIH) grants.
On paper, the hit to Thermo Fisher seems modest. Academic and government sales account for just 15% of the company’s revenue, according to Ameriprise Financial. So far this year, weakness in that corner of the business hasn’t spread to its broader customer base.
But the trouble may just be getting started. The company’s revenue hinges on biotech and pharmaceutical customers whose ability to innovate relies on a steady flow of university research. Any lasting disruption to this relationship could shrink demand from its largest clients and hamstring future revenue growth.
“Most of Thermo Fisher’s end markets are feeling the strain this year,” said Vijay Kumar, an analyst at Evercore. “National Institutes of Health grant cancellations have drained demand on the academic side.”
Soon after the Trump administration announced major cuts to federal research in February, the $43 billion life sciences giant projected a $300 million revenue hit from weaker academic and government sales.
CEO Marc Casper said those customers remained “relatively soft” and were expected to stay that way through the year. Months later, the softness hasn’t budged. Revenue tied to this segment of the market continues to swing from single-to double-digit declines in recent quarters
Other market segments, however, are delivering significantly better results for the company with stronger-than-expected orders from private customers eager for its core products — such as diagnostics and biopharma tools.
On the stock front, Thermo Fisher’s shares are up 10% year-to-date, outpacing the First Trust Indxx Medical Devices Index, which is down 0.7%. The ETF, which tracks a basket of major medical technology and diagnostic companies, serves as a benchmark for the industry’s overall health.
By the third quarter, robust revenue growth drove a second upward revision to the company’s full-year outlook, with 2026 revenue now expected to reach $47 billion, up 5%.
All of this, however, rests on the expectation that federal funding cuts are just a short-term blip, unable to inflict any serious collateral damage on the nation’s research infrastructure.
While many analysts share this view, science leaders such as Heather Pierce, Senior Director for Science Policy and Regulatory Counsel at the Association of American Medical Colleges, warn that institutional erosion is already starting.
“The sense of doom among researchers is real,” said Pierce. “We’re seeing grants revoked or suspended without notice, which shakes confidence across the entire research ecosystem.”
Confidence is the operative word. Congress has been reluctant to follow the president’s proposal for a $27.5 billion budget, which would slash funding by roughly 40% compared to 2025. The Senate has even proposed a $400 million increase.
But inside research labs, scientists are already nervously gaming out scenarios for potential funding pullbacks. Dozens have even tweaked grant titles or experiment materials to avoid drawing the attention of political appointees scanning for “ideologically biased” language — a directive confirmed by federal court documents. In fact, NIH Reporter data show that more than 700 multiyear grants changed titles from 2024 to 2025, reportedly in response to these restrictions.
On its latest earnings call, Casper said academic and government customers “felt more confident” in their funding outlook, with cautious hope set on a flat NIH budget for the coming fiscal year.
Others in the scientific community argue that even flat funding is effectively a cut.
“Rising research costs from more sophisticated projects and pricier equipment mean each dollar stretches less than before,” Pierce said.
That financial squeeze is magnified by uncertainty surrounding an institution long seen as the bedrock of academic research. Each year, the NIH directs nearly $48 billion in grants to more than 2,500 institutions, supporting over 300,000 scientists.
Even minor future reductions can stall experiments and delay publication of research, setting off a cascade that stunts innovation over time. While funding is expected to rebound eventually, Pierce noted, researchers may still gravitate toward shorter, lower-risk projects as a hedge against any threat of midstream budget cuts — leaving longer, more ambitious experiments unrealized.
Still, if Thermo Fisher has second thoughts about its bet that the funding storm will soon clear, it isn’t showing it. The company did not respond to requests for comment.
Rather than dwell on losses among its academic and government clients, the company is doubling down on its private pharmaceutical partners. Last month, it agreed to acquire Clario Holdings for $9.4 billion — the firm’s AI-enhanced clinical trial platform has supported about 70% of FDA drug approvals over the past decade. The deal would be Thermo Fisher’s largest since its $17.4 billion purchase of PPD in 2021.
Analysts like Morozov concede the risk to innovation but doubt it will make any lasting impact. Funding constraints, he said, “won’t immediately derail [pharmaceutical companies’] ability to deliver new drugs,” since the industry’s 10- to 20-year development cycle allows for a “catch-up period.”
But that catch-up depends on the seamless return of a trusted partnership between academia, government, and industry. That may already be a thing of the past.