Sectors such as radiology have seen massive consolidation in response to the demand for competitively priced outsourced services.
The biggest impact continues to be felt in imaging and diagnostics: 53% of companies say they are more likely to consider divesting these assets in light of this move toward consolidation, on par with last year (54%).
Some health care businesses are selling off core assets for diagnostics while retaining their specialty drug units. Novartis, for example, sold its commercial laboratory subsidiary Genoptix to private investors while retaining the Genoptix specialist biopharma business.
In the case of diagnostics, companies with deep expertise in test development may be better positioned to derive the greatest value from diagnostic assets because of the different development, regulatory and commercial requirements. Biopharma or medtech companies looking to divest might sell assets to global diagnostics companies; however, if the business is sizable enough to be considered a stand-alone diagnostic company, private equity groups may also be interested.
Diversified conglomerates with health care assets are also optimizing their portfolios. Siemens, which floated a 15% stake of its Healthineers medical imaging and diagnostics division in 2018, is one example. The spin-off of GE Healthcare is another: it includes the organization’s valuable diagnostics assets, the largest part of GE Healthcare.
1. “Novartis Completes Sale of Genoptix Lab Business.” 7 March 2017. https://www.genomeweb.com/cancer/novartis-completes-sale-genoptix-lab-business#. XBjjX2j7QuU.
2. “Siemens plans IPO of Siemens Healthineers AG in the first half of calendar year 2018.” Press release. 19 February 2018. https://static.healthcare.siemens.com/siemens_hwem-hwem_ssxa_websites-context-root/wcm/idc/groups/public/@global/documents/download/mda3/nze3/~edisp/pr2018020166coen-04858444.pdf.
3. “Siemens Healthineers up 7 percent on 4.2 billion euro market debut.” Arno Schuetze and Ludwig Burger. Reuters. 16 March 2018. https://www.reuters.com/
4. “GE Focuses Portfolio for Growth and Shareholder Value Creation.” Press release. 26 June 2018. https://www.genewsroom.com/press-releases/ge-focuses-portfolio-growth-and-shareholder-value-creation-284411.