By Jonathan D. Rockoff and Cara Lombardo

Thermo Fisher Scientific Inc. is nearing a deal to buy pharmaceutical-testing company PPD Inc. for more than $15 billion, according to people familiar with the matter, in what would be the latest tie-up among companies that run clinical trials and provide other services for drugmakers.

The companies could finalize a deal as soon as this week, assuming the talks don't fall apart, the people said. PPD has a market value of about $13.6 billion, while Thermo Fisher's is $187 billion.

PPD, based in Wilmington, N.C., is a so-called contract-research organization, a type of company that runs the studies testing experimental drugs developed by pharmaceutical companies. PPD also provides laboratory services.

The contract-research industry has expanded in recent years as drugmakers pour money into developing new cancer and other treatments. While CROs, as the firms are known, were hurt as pharmaceutical trials were disrupted in the early days of the pandemic, activity has been returning, augmented by drugmaker- and government-funded studies testing Covid-19 drugs and vaccines. The industry is poised to benefit further from a heightened interest in treatments and preventive measures for any future pandemics.

PPD reported $4.7 billion in revenue last year, up 16%. Its net income tripled to just over $160 million.

Thermo, of Waltham, Mass., sells lab equipment, chemicals and tests, among other life-sciences services and products. It had $32 billion in sales last year, a 26% increase. The shares have risen sharply over the past several years and are up nearly 50% in the past 12 months alone.

Through its Patheon business, acquired in 2017, Thermo already provides services including clinical-trial logistics, and buying PPD would augment that.

Thermo has been on the hunt for acquisitions. It agreed to buy molecular-diagnostics company Qiagen NV for about $10.1 billion in March 2020. It subsequently sweetened the bid but in August terminated the agreement after failing to get shareholder approval. Thermo now has more than $10 billion in cash.

The agreement would be the second major tie-up in the CRO industry this year and would come as a handful of others also consider deals.

In February, Icon PLC said it would buy rival PRA Health Sciences Inc. for $12 billion. Laboratory Corp. of America Holdings said in March it hired bankers to review the company's structure; analysts expect it could explore a separation of its drug-development unit Covance.

Two private-equity firms are significant owners of PPD: Hellman & Friedman LLC owns 38% of the company, while Carlyle Group Inc. holds 16%, according to FactSet. The two firms agreed to take the company private in 2011 before it returned to the public markets in a February 2020 IPO.

The shares plummeted in the early days of the pandemic along with much of the market, but have since recovered and were trading at around $39 apiece Wednesday afternoon, up from around $30 a share at their debut. The stock soared more than 13% after The Wall Street Journal subsequently reported on the potential deal.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Cara Lombardo at cara.lombardo@wsj.com

(END) Dow Jones Newswires

04-14-21 1614ET