Siemens Pays $1.9B to Enter IVD Market

Siemens on Thursday announced that it has entered into an agreement to acquire Los Angeles-based Diagnostic Products Corporation for approximately $1.9 billion.

Subject to shareholder and regulatory approval, the deal would make DPC, which had sales of $481 million in 2005, a wholly owned subsidiary of Siemens Medical, which produces medical imaging and healthcare information technology and competes with General Electric and Philips.

The acquisition would broaden Siemens's health offerings by the additon of DPC products such as automated body fluid analyzers and including tests related to cancer and cardiac disease, as well as hormone and allergy conditions.

Siemens heralded the acquisition as it entry into the in-vitro diagnostics market. As such, it is an expensive move, but one that demonstrates the hopes for growth in this sector, given an aging population in the US, which is expected to require greater healthcare services and products.

According to some studies, US demand for in vitro diagnostic products is projected to grow over 6 percent annually to $17.9 billion in 2009 fueled by new reagents and instruments with improved disease detection and measurement capabilities. Currently the large share of IVD products are for health assessment screening, and diabetes-related blood glucose monitoring.

But, polymerase chain reaction products, as well as microarrays and, in the future, nanoarray technologies – in combination with new disease markers and targets -- are seen as spurring greater demand. IVDs today represent less than 5 percent of total healthcare expenses.

For more information on the in-vitro diagnostics market, see this article by Michael Rosen, published on the Wisconsin Technology Network.