Siemens Healthineers Boosts Cancer Imaging with €200M Acquisition from Novartis

Siemens Healthineers is set to enhance its cancer imaging capabilities through a significant acquisition of over €200 million from Novartis, specifically targeting the diagnostics arm of Advanced Accelerator Applications (AAA). This deal reflects Siemens Healthineers' commitment to strengthening its core business, particularly in the realm of diagnostic imaging, where it has emerged as a leader. The news follows Novartis' strategic decision to divest lower-growth segments of its portfolio. AAA, acquired by Novartis in 2017, is known for operating Europe’s second-largest network of cyclotrons, instrumental in manufacturing radioactive compounds essential for positron emission tomography (PET) scans. These scans are pivotal in diagnosing cancers, heart diseases, and neurological disorders, offering critical insights into patient health. Siemens Healthineers, which separated from its parent company Siemens in 2017, is poised to leverage this acquisition to expand its already dominant PET radiopharmaceuticals business into the European market. The company noted that the proximity of material production to patients is vital, given the short half-life of radioactive compounds, which necessitates their immediate use post-manufacture. The transaction, pending regulatory approval and discussions with Novartis's works council, is expected to finalize in the last quarter of the year. This acquisition comes at a time when PET scan utilization is rising, as evidenced by the more than doubling of PET scan capacity across numerous European nations from 2010 to 2020. This surge in capacity has corresponded with an increased demand for the radioactive compounds produced by AAA, underscoring the strategic importance of this deal. Siemens Healthineers reported that its imaging division alone accounted for nearly €3 billion in sales during the last quarter, comprising over half of the group’s revenues. The company’s market value reached €58 billion, indicating robust investor confidence in its growth trajectory. In conjunction with the sale, Novartis is expected to collaborate with Siemens Healthineers to boost the supply of nuclear isotopes used in radiopharmaceuticals like Lutathera, which targets neuroendocrine tumors. This drug, which has been on the market since 2018, is projected to generate substantial sales this year, further solidifying the intersection of radiopharmaceuticals and diagnostic imaging. Overall, the acquisition of AAA’s diagnostics division not only aligns with Siemens Healthineers’ strategic vision but also positions the company to meet the growing global demand for advanced diagnostic tools in the fight against cancer. As the healthcare landscape evolves, this transaction illustrates the critical role of innovative imaging solutions in enhancing patient outcomes and supporting the broader medical community.