Business & Technology Briefs (08/2007)
Brief summaries of recent product and company developments in the device industry, including the demise of GE's proposed $8 billion acquisition of Abbott Diagnosticss, the Cytyc/Hologic merger, and Alsius' SPAC merger.
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Roche's hostile tender offer for Ventana Medical Systems, and to a lesser extent its recent acquisitions of life science tools companies this year, highlight the firm's belief in diagnostics and its bet that personalized medicine--an area where innovative platforms and molecular test content will play significant if separate roles--will be key to its long-term growth. It could be an expensive and risky strategy that will take years to come to fruition.
The entry by GE into the core lab business via its acquisition of Abbott's clinical diagnostics businesses follows a similar move by Siemens last year, and suggests IVD may be best suited for generalist industrial giants. While the pricing pressures that have dogged this segment of diagnostics are not likely to abate, existing players--including Abbott--are continuing to develop high-margin molecular diagnostic tests that they expect the new players will want to incorporate into their platforms.
Hologic is garnering more attention these days than it might have in the past because it's just come off an "annus mirabilis." In 2006, Hologic made three vertical acquisitions in the area of breast cancer detection, and it reported stellar financial results. The company is now a market leader in osteoporosis assessment and has an approxmately 50% share of the conventional mammography customer base as well as an early lead in digital mammgoraphy, which is remarkable considering that it is a mid-sized company competing in capital equipment markets against the likes of GE and Siemens.