Business & Technology Briefs (09/2007)
Brief summaries of recent product and company developments in the device industry, including Medtronic's acquisition of Kyphon, Siemens' purchase of Dade, and the FoxHollow/ev3 merger.
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Integration is occuring at almost every level of the in vitro diagnostic industry--at the preclinical level to decrease drug development costs and timelines and at the clinical level to better manage diseases. In the lab, there's a demand for new tools to improve speed and efficiency, and new information systems to better integrate disparate data. At the same time, there has been a flurry of integration and consolidation at the market level, with 35 mergers and acquisitions in the last 12 months.
A year ago at this time, a sale to another company was the last thing on the minds of senior executives at St. Francis Medical, one of the leading companies in dynamic stabilization. But interest by large spine companies put a halt to the company's plans to go public and led to an auction that was eventually won by Kyphon. Kyphon's acquisition of St. Francis Medical was one of the device industry's biggest deals in 2006--and just what everyone was waiting for.
The entry by GE into the core lab business via its acquisition of Abbott's clinical diagnostics businesses follows a similar move by Siemens last year, and suggests IVD may be best suited for generalist industrial giants. While the pricing pressures that have dogged this segment of diagnostics are not likely to abate, existing players--including Abbott--are continuing to develop high-margin molecular diagnostic tests that they expect the new players will want to incorporate into their platforms.