UPDATE 1-Thermo Fisher says Inverness ends supply contract

* Sees 2010 Biosite sales less than half of 2009 levels

* Says signed agreement with another supplier

* Sees selling $40 million of new products in 2010

Nov 10 (Reuters) - Thermo Fisher Scientific Inc (TMO.N: Quote, Profile, Research) said Inverness Medical Innovations Inc (IMA.N: Quote, Profile, Research) ended a supply agreement on a line of diagnostic products, effective July 1, 2010, and expects related revenue to more than halve in 2010.

Thermo Fisher's recent decision to expand its product offerings with a broader menu of diagnostic solutions may have prompted Inverness' move, Thermo Fisher said in a filing.

However, the scientific instruments maker said it signed a supply agreement with another supplier and expects to sell about $40 million worth new products in 2010, partly offsetting the drop in revenue from the Biosite line of products from Inverness.

The company now sees revenue from the Biosite line falling by more than half in 2010, compared with the $200 million that it expects in the current year.

Thermo Fisher expects sales from the Biosite line to be minimal in 2011 and beyond.

Shares of the Waltham, Massachusetts-based company were down 23 cents at $45.16 Tuesday morning on the New York Stock Exchange. They touched a low of $44.88 earlier in the session. (Reporting by Vidya L Nathan in Bangalore; Editing by Unnikrishnan Nair)