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With Molecular Dx Division In Place, GE Healthcare Sets Sights on Clinics

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When General Electric acquired Amersham for £5.7 billion ($10.3 billion) in April, speculation mounted about what would happen to the British biotech’s Biosciences unit.

Now, with the recent opening of GE’s Molecular Diagnostics unit in Piscataway, NJ, the conglomerate’s Healthcare division, which absorbed Amersham, seems to be moving on its plan to beef up Amersham assets most likely to contribute to diagnostics — the MegaBACE sequencing technology and the moribund CodeLink array. It will also help propel GE’s own in vivo imaging and information technology.

Trevor Hawkins, president of the Molecular Diagnostics unit, told Pharmacogenomics Reporter this week that his division would maintain a staff of “several hundred” employees “to provide DNA-, as well as protein-based assays that will go to the clinic.”

Hawkins, who had been vice president of development and new business initiatives at Amersham, later wrote in an e-mail that the unit will concentrate on clinical areas in which GE already has expertise: cardiology, neurology, oncology, and infectious diseases. He also said GE Healthcare would work with GE Global Research to better define the molecular diagnostics marketplace.

Formation of the unit would involve no layoffs, said Hawkins. Instead, the company intends to “bring together” research groups in Piscataway, Arizona, California, and the United Kingdom. “We’re looking at this as one of our key growth areas within the business,” Hawkins said. He declined to say how many former Amersham employees were slated to work at the Piscataway unit, and he would not disclose its annual budget.

Of Amersham’s two business units, Amersham Biosciences was not as profitable as Amersham Health when the acquisition was announced in October 2003 [see 10/16/03 PGx Reporter]. Total revenues for Biosciences in 2003 were $1.2 billion compared with $1.8 billion for Health. Biosciences also employed fewer staff than Health: 4,650 employees versus 5,300, respectively.

In the run up to the acquisition, GE emphasized the utility of Amersham Health, and the imaging chemistries that would complement its own imaging instruments, while paying less attention to Biosciences.

Any doubts the pharmacogenomics industry had about the fate of Biosciences evaporated on April 8 when the acquisition closed: Following a conference call announcing the deal, Hawkins said that GE’s newly formed Healthcare unit would retain Amersham Biosciences along with Amersham Health, and would continue to support their PGx technologies, including MegaBACE and CodeLink [see 4/14/04 PGx Reporter]. The two units that were created within GE Health, Healthcare Biosciences and Healthcare Technologies, now employ 42,000, including approximately 10,000 former Amersham employees.

The decision seems to be paying off for GE. For the three months ended June 30 — GE’s first quarterly earnings report to include Amersham — total revenues increased 40 percent to $3.4 billion [see 7/15/04 PGx Reporter]

What’s the Next Step?

So how does GE Healthcare fit together in vivo, in vitro and IT from here? Even though GE Healthcare has mammoth resources in its corner and already reaches the clinical diagnostics market with its imaging technology, it can’t do anything without demand.

One answer lies in the CodeLink technology, and whether GE can muster enough interest to develop it for the clinical marketplace. “Are clinical labs ready for sophisticated microarrays?” asked Jerry Willamson, former managing director at Pyrosequencing and cofounder of the biosciences consulting firm Beacon BioPartners, where he is managing partner. “This has been the Holy Grail. The likes of Illumina, Luminex, and Affymetrix and other microarray companies have been pushing the hope that they’ll be able to get a highly reliable, useful, large-scale microarray into the clinical laboratory to be used for diagnostic purposes.”

To be sure, GE is in it for the long haul. According to Hawkins, putting together genomics, traditional imaging, and IT “is a change that will occur over the next five to 10 to 15 years as DNA-based and protein-based assays become more prevalent, as the early diagnosis of disease becomes the norm, and the ability to have one’s DNA checked for predisposition and how one metabolizes particular drugs is something that is done at birth and is very much part and parcel of standard healthcare.”

Some of this strategy involves GE’s brain trust, GE Global Research, the early-stage, long-term development division with which Hawkins said Molecular Diagnostics would work in figuring out the future of the molecular diagnostics market. To that end, GE has recently moved its UK-based Discovery Systems unit — which oversees the GenomPhi and AmpliPhi amplification technology, and the MegaBACE technology — to join the Global Research Center in Nikayuna, NY.

Hawkins said the MegaBACE will remain within the Discovery Systems business while the platform’s clinical diagnostic applications — such as the recent molecular diagnostics deal with Bayer — will be run out of Molecular Diagnostics [see 2/19/04 PGx Reporter].

CodeLink will become part of Molecular Diagnostics, using updated components to pry open the clinical lab market. The unit will also be working to develop a CodeLink protein array.

With its fingers already in the clinical lab pie — by way of its CT and MR imaging technologies, for example — GE can approach CodeLink differently, said Williamson. “Without having the benefit of access to these channels, like GE now has, if anyone tries to put a product out into the marketplace, where the market isn’t fully formed, you would expect it to be a slow go,” he said. “Now with GE’s stronger relationships in the clinical market, is that going to help advance the technology? I’m sure that’s their hope. It’s a plausible strategy.”

— CW

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