General Electric Co., the world’s biggest maker of medical-imaging equipment, is seeking to double within three to five years the $2.4 billion in annual sales it gets from divisions tied to molecular-based medicine.
“We’re going to put a lot of our resources, both organically and inorganically into the tissue-diagnostic side of this,” John Dineen, chief executive officer of GE Healthcare, said in an interview after speaking at a Goldman Sachs Group Inc. conference in Boston. About 20 percent of GE Healthcare’s research budget is dedicated to the effort, he said yesterday.
Drugmakers such as Eli Lilly & Co. are using molecular medicine for treatments that are more specific to each patient’s tumor, disease or condition. GE will build its molecular-related businesses with research and development, including partnerships, and through acquisitions of less than $1 billion each, Dineen said. He cited last year’s purchase of diagnostic testing company Clarient Inc. in a deal valued at $580 million.
“In a world where we used to look at the brain, or look at the bone, or look at the skull, now we’re looking beyond that, we’re looking at differentiating certain types of tissues at a molecular level so that we can diagnose diseases that we simply couldn’t see before,” Dineen said.
GE Chief Executive Officer Jeffrey Immelt began building this portion of the health-care business in 2004 with the $10 billion purchase of Amersham PLC, the company’s biggest ever acquisition. Since then, Fairfield, Connecticut-based GE has expanded partnerships and boosted research with an eye toward making cancer diagnosis more precise.
The molecular-medicine businesses, which includes diagnostics and life-science products used in drug discovery methods such as chromatography and protein analysis, aim to make diagnosis and treatment more precise for patients. Dineen points to Alzheimer’s disease and certain cancers as areas where GE seeks to hone and build its product lines and partnerships.
“We’re diagnosing at a biological level, not a physiology level,” he said. “We’ve gone from a physiology, which is ‘look at the brain, look at the tumor,’ to ‘let’s understand what’s going on in the cells of this tumor. What signals is it sending? What’s going on metabolically?’ It’s another level of resolution.”
GE doesn’t disclose R&D budgets for its non-financial units. Immelt has tripled total R&D spending to about $6 billion annually for all industrial businesses. Immelt has said the company isn’t considering large acquisitions following $12 billion in purchases in the past year, mostly in energy.
GE Healthcare provided $16.9 billion of the parent company’s $150.2 billion in sales last year, according to the company’s most recent annual report. About 53 percent of the division’s sales last year came from outside the U.S., a trend Dineen said will continue. He repeated a forecast for a sales increase of 5 to 10 percent annually, with a goal for profit increases of 10 percent.