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Buying Bayer Diagnostics, Siemens Approaches Guided Therapy with Imaging, Immuno Dx


Medical imaging giant Siemens is joining rival GE Healthcare in the molecular diagnostics field by purchasing Bayer HealthCare's Diagnostics division.

Under the terms of the acquisition, announced last week, Siemens will buy the unit for $5.34 billion, and the transaction is expected to be complete in the first half of 2007. Bayer will retain its diabetes diagnostics unit under the Diabetes Care Division moniker.

Large imaging companies, such as Royal Philips Electronics and Siemens have been dipping their toes in the molecular diagnostics market since GE bought Amersham in 2004. But Munich, Germany-based Siemens is only the second to purchase a company with molecular diagnostics capabilities.

Siemens appears to be less interested in genetic tests than in immunodiagnostics, an area which may have more immediate overlap with its imaging specialty, and that area still has plenty of pharmacogenomic applications. In a June 30 Siemens presentation about the Bayer Diagnostics acquisition, the company listed among its goals "closing ranks with No. 2 in IVD, Abbott" and "establishing No. 2 position in immunodiagnostics and covering gene-based analysis." Siemens is executing the purchase as part of a program to bring its growth up to twice the global GDP.

The company believes molecular IVDs are most useful for detecting diseases early; monitoring treatment efficacy, such as during drug development; aiding selection of individual patient therapy; and screening patients more broadly for genetic predisposition for diseases.

Neither Bayer HealthCare nor Siemens responded to requests for further comments before deadline.

According to the presentation, the company believes molecular IVDs are most useful for detecting diseases early; monitoring treatment efficacy, such as during drug development; aiding selection of individual patient therapy; and screening patients more broadly for genetic predisposition for diseases.

Bayer Diagnostics' 2005 fiscal year sales totaled $1.66 billion, of which approximately $120 million came from molecular diagnostic products. and the division employs approximately 5,400 people. IVD specialties include nucleic acid testing and a broad spectrum of mature applications, such as near-patient testing, lab automation, urinalysis, hematology, immunodiagnostics, and clinical chemistry. The company's genetic tests largely consist of infectious disease kits for HIV and hepatitis genotyping and viral load. Its nucleic acid-based instruments consist of its System 340 bDNA analyzer and the OpenGene DNA Sequencing System.

Bayer developed its TruGene HIV genotyping tests in a collaboration with Amersham Biosciences that was originally announced in February 2004. The companies continued to work on the products after GE Healthcare acquired Amersham in April 2004.

A recent deal between Bayer Diagnostics and Stratagene provides a glimpse into that company's plans before Siemens acquired it. Stratagene said in March that it had agreed to develop customized software and system features for its Mx3005P QPCR platform for Bayer. Bayer Diagnostics planned to use the instrument as a component of a new platform it was developing to expand its own IVD offerings, according to a statement accompanying Stratagene's first-quarter 2006 earnings report.

The statement highlighted the use of Q-PCR in infectious disease testing, and it featured a quote by Tom Warekois, Bayer senior vice president of global strategic marketing, praising the Mx3005P's small size, economy, and reliability.

Siemens' recent moves include its purchase in April of Diagnostic Products Corporation, an established immunodiagnostic company with products for disease detection and management in cardiovascular disease, diabetes, cancer, allergy, glandular disorders, and bone metabolism disturbances. DPC sells its products to hospitals, laboratories, and clinics in more than 100 countries. The acquisition cost Siemens approximately $1.86 billion.

DPC's product list does not contain any items with obvious pharmacogenomic implications. However, in a statement announcing the acquisition, Siemens billed it as a step toward "enab[ling] early and specific diagnosis and individualized patient therapy," and said that it planned to use its technologies in diagnostic imaging, healthcare information technology, molecular biology, and biochemistry to drive "personalized healthcare."

"The potential is huge to drive groundbreaking innovations by combining DPC's in vitro diagnostics leadership with Siemens' leading position in medical imaging and healthcare IT solutions," Erich Reinhardt, president and CEO of Siemens' Medical Solutions division, said in the statement.

Mohammad Naraghi, Siemens' senior vice president of business development told IVD Technology in June that the company saw potential in the overlap between imaging, genomics, and immunodiagnostics. "In vitro genomic-based companies need significant in vivo and immunoassay expertise to come up with new imaging solutions," he said. "So from that perspective, we think there's going to be a tremendous need for bringing together in vitro and in vivo under one roof, and intelligently linking them with new IT solutions."

Other Steps into Molecular Diagnostics

Siemens previously got a taste of molecular diagnostics in a proof-of-concept study in which it tested Sequenom's MassArray genotyping platform against those of four undisclosed competitors. Siemens planned to "evaluate a range of platforms, because the link between molecular medicine, molecular imaging, and current imaging modalities is becoming more apparent," Murali Prahalad, vice president of business development at Sequenom, told Pharmacogenomics Reporter in October 2004.

The German conglomerate's medical division was interested in evaluating MassArray's genotyping, epigenetic analysis, and gene-expression analysis in diagnostics, said Prahalad.

Siemens invested $3 million in Sequenom's April stock placement, but Stylli told Pharmacogenomics Reporter at the time that the company was "not likely" to be purchased by Siemens.

Siemens also purchased the biochip technology division of Infineon — a German semiconductor firm that is itself a spin off of Siemens — earlier this year, furthering its patent estate and development activities in the molecular diagnostics field. Naraghi told Pharmacogenomics Reporter sister publication BioArray News that the firm has "had activities to develop biochips for a couple of years now."

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