DHRDanaher Corporation

Danaher sells equipment and consumables for biotech manufacturing — it earns from making medicines, not from selling them.

The main buyers are pharmaceutical and biotechnology companies needing filtration, media, chromatography, single-use production systems and diagnostic instruments. It occupies the picks-and-shovels position: income does not depend on whose particular discovery succeeds.

A substantial share of revenue recurs: an instrument is installed once and its consumables bought continuously, while changing supplier after a process has been validated by regulators is slow and expensive. That makes the business markedly steadier than one would expect from an equipment maker.

The company is known for its own continuous-improvement system and steadily acquires businesses to run through it, spinning off lines that stop fitting the profile. Cyclicality arrives from the customer side: reduced biotech start-up funding shows in instrument orders before it shows in consumables.