Amersham is bringing good things to General Electric — at least as far as the conglomerate’s second-quarter earnings are concerned.
Total revenues for GE’s Healthcare division during the period ended June 30 — the first quarter to include Amersham — surged more than 40 percent, to $3.4 billion from $2.4 million in the year-ago quarter.
(The conglomerate did not break out Amersham's contribution to this top line, though Amersham reported £427 million [$795 million] in sales during the second quarter of 2003.)
GE posted $3.5 billion in orders during the second quarter; excluding Amersham, orders were $2.9 billion.
Total revenues inched up to $37 billion from $33 billion, a 12-percent increase, according to GE.
GE also reported a $100 million increase in second-quarter net income, to $3.9 billion, during a period in which it closed on the Amersham acquisition; completed the merger of NBC and Universal; and floated an initial public offering for its insurance unit Genworth Financial.
GE acquired Amersham in a $10.3 billion transaction that closed on April 8. Amersham is being integrated into GE and will eventually do business as GE Healthcare, which will become the only one of the conglomerate’s 11 businesses headquartered outside of the United States, combining GE's healthcare technology business with the whole of Amersham.
In a conference call last week, Jeffrey Immelt, the chairman of General Electric, said the integration of Amersham is “going well.”
“This is an area that clearly I'm spending a lot of time on,” he said. “The biosciences business is exceeding expectations.”
Immelt said GE has created a unified sales force to sell its products to the pharmaceutical industry, and it has linked GE’s service business with proteins separations and other Amersham businesses to “improve service operations” as well as taking other steps.
“We have combined strategic accounts and now have nine technology programs that combine the best of Amersham and GE to offer to customers over the next 12 months,” he said. “We love the way the business is operating and it will continue to drive good results.
“The deals are done, and are performing well and we are focused on executing,” Immelt added. “The second quarter was an important point for the company. This sets the framework going forward.”
The company reported a $40 million charge for the amortization of intangibles and integration expenses from the Amersham deal in the quarter.
The write-off of in-process research and development and a fair-market value for inventory amounted to $163 million, said Keith Sherin, co-CFO for GE. He said integration-related expenses for the deal for the remainder of the year and for next year would be nominal.
“We’re on track here to basically have these teams fully integrated,” he said. He didn’t provide a target date for the completion of the integration.
CodeLink customer Scott Magnuson, president and founder of GenUS Biosystems, an almost two-year-old Chicago-based firm offering gene-expression profiling services using Amersham’s CodeLink platform, said he sees no changes in CodeLink since the acquisition closed.
“It seems like a pretty seamless transition,” Magnuson told BioArray News, Pharmacogenomics Reporter’s sister publication, this week. “We have seen a pretty big push from them to become a bigger player. They don’t seem to be laying back.”
Magnuson previously was head of genomics and bioinformatics for Motorola Life Sciences, and before that, a senior scientist at Abbott. After Motorola sold the CodeLink line, Magnuson opted not to relocate with the product line to Chandler, Arizona, but instead opened a microarray-services business with two partners. Today, the firm has seven employees.
Magnuson said his company is seeing a wide array of customers for the CodeLink services GenUS offers.
“They are all over the board, from academia, pharma, and biotechs,” he said. “After a year or so into this, there is no set pattern in terms of outsourcing.”