It’s been 20 months since Trevor Hawkins sent shudders through his staff at Amersham Biosciences by telling a GenomeWeb reporter that, in his new position as senior vice president of genomics there, he would emulate the management style of his “absolute hero … Jack Welch,” the General Electric CEO known, among other things, for showing less productive employees to the door.
Now the Amershamites might really get to find out what the GE culture is all about. What’s more, life sciences research customers will have a chance to purchase products and services from a conglomerate with a reputation for being one of the world’s best-managed. And other life sciences vendors — namely Applied Biosystems and Affymetrix — that compete with Amersham on sequencing and microarray technologies are likely to get a run for their money from a competitor that stands for nothing less than being number one in its market.
In mid-October GE made a $9.5 billion offer to bring Amersham PLC under its ownership. Only regulatory approval and a possible counterbid from medical imaging giant Philips, which has collaborated with Amersham in the past, stood in the way of the acquisition.
GE touted the purchase, which would be its biggest ever if not for an offer it made for Vivendi only a few days earlier, as a step that would position the GE Medical Systems division “to participate in exciting new developments in molecular imaging and personalised medicine” (British spellings in its press release perhaps in deference to its UK-based adoptee).
Andrew Carr, president of the Amersham Biosciences division of Amersham PLC, views the entry of the number five ranked company in the Fortune 500 into life sciences technology research as the start of a new era for genomics. “I see this in some ways as a maturing of the life sciences market. It’s a coming of age,” Carr tells Genome Technology. “This can only be good news for research and pharma customers. They’ll have more resources and we can take from GE some of the excellence they have in processes.”
Carr says GE ownership could bring immediate short-term benefits to Amersham’s customers — “GE can help us bring [resources] to developing products such as Code Link for the research market and take more integrated services into pharma labs” — but adds that in the long term, GE aims to build up a competence and strength in biology. “We all share a vision that capabilities in biosciences will translate to diagnostics and [therapeutics],” Carr says.
Carr also dispels speculation that GE was strictly interested in Amersham’s imaging and diagnostics capabilities and would likely sell off its discovery research and protein separations tools businesses. “The research market is very important. It’s where the innovation comes and technologies are tested and tried. … Look at GE Medical Systems: they have a hospital services business and clinical IT. There’s a real opportunity to develop the pharma and research lab business and expand what Amersham Biosciences is today. It’s a new channel-to-market for GE.”
To be sure, Amersham’s $2 billion revenues are peanuts compared to GE’s $132 billion. And Medical Systems, though it accounts for less than 10 percent of the diversified company’s operating profits, reaps $1.4 billion annually.
GE’s public statements about the deal, which will move Amersham’s 55-year-old CEO William Castell into the position of CEO of GE Healthcare Technologies, describe Amersham as “a global leader in diagnostic imaging agents and in life sciences” and say that the purchase “significantly advances General Electric’s strategy of addressing high-growth, high-technology segments of the global healthcare industry.”
By acquiring Amersham, GE management says it expects to gain access to new channels for each company’s products and services, create efficiencies in current channels, accelerate global expansion, and introduce new products. The newly expanded technology- and service-driven healthcare business will have combined 2003 pro forma revenues of $13 billion, GE predicts.
Asked whether the acquisition will boost Amersham’s sequencing and microarray businesses into the number one slots, Carr responds, “We’ve felt that there’s great potential in this business, and GE sees this as well. Aspiring to be number one is what we want to do. People should take us very seriously as a major player going forward.”
— Adrienne J. Burke