Two become one

Katharine Sanderson finds out about the merger of two companies and the birth of a new business, GE Healthcare, which aims to provide complete medical imaging and personalised healthcare solutions

What happens when one of the world’s biggest engineering companies joins forces with a serious bioscience firm? The marriage of General Electric’s (GE) medical imaging arm and Amersham Biosciences 18 months ago, in April 2004, formed the market-engulfing GE Healthcare. The new company aims to provide the complete medical imaging package and hopes to begin a personalised medicine revolution. 

Amersham already had sales of around $3 billion (?1.6 billion) a year. It specialised in radioisotopes for use in medical imaging. GE provided the hardware - the scanners and imaging instruments used in hospitals worldwide. And now GE Healthcare has annual sales of around $14 billion. This comes from GE Healthcare Technologies ($13 billion) and GE Healthcare Biosciences ($3 billion). 

Bringing the two businesses together has been a good move so far. GE Healthcare employs over 42000 people across the globe in more than 100 countries. Of GE’s 11 businesses, GE Healthcare has been designated a high growth area. It is performing well, with first quarter results from 2005 showing a growth rate over the first quarter of 2004 of 19 per cent in equipment and 10 per cent in services. As well as that, since the first quarter of 2004, around the time Amersham was acquired, total orders have increased by 45 per cent to $3.5 billion. Revenue increased from $339 million to $409 million over the same period. 

GE Healthcare’s headquarters are in the UK at Amersham’s site in Chalfont St Giles. This heralds the start of a new, global attitude for US giant GE. ’It’s the first time that a business of GE has been headquartered outside the US,’ says John Jeans, UK president, GE Healthcare. ’Jeff Immelt [GE chief executive officer] has a very strong view about globalisation of GE and was very keen, first of all, to have a business headquartered outside the US.’  

Friends in high places 

Jeans cites Immelt’s relationship with old Amersham chief, Bill Castell, as being responsible for this move. ’Immelt was very strongly influenced by his relationship with Bill Castell,’ he says. Immelt then asked Castell to become a vice-chairman of GE. ’This is the first time that a main board director of GE has been a non-American,’ adds Jeans. 

GE Healthcare is a science business and John Anson, head of development for lead discovery within GE Healthcare Biosciences, recognises the role that chemists play within that business. ’We have a core group of organic chemists who are all experts in dye chemistry,’ he says. Back in the Amersham days, the need for chemistry within the healthcare industry was identified. ’We have a big history going back over 10 or 12 years now where we’ve been investing heavily into organic chemistry, particularly into dye chemistry,’ says Anson.  

Much of this work is around the cyanine family of dyes. They have applications in genomics, in sequencing, in proteomics for labelling proteins, and in labelling proteins for high-throughput screening, as well as in cell analysis. ’Core chemistry expertise has generated a lot of product opportunities and products that encompass a lot of areas,’ says Anson. 

Developing innovations 

The list of innovations that have been developed by GE Healthcare both pre- and post-Amersham is long. It includes HDMR, the world’s first high definition magnetic resonance system. HDMR will allow doctors to get clear images of patients whose movements are difficult to control - such as Parkinson’s disease sufferers. 

It has also developed the IN Cell Analyser system to study cell behaviour in response to drugs. This is used by pharmaceutical companies to screen potential cancer, diabetes and other treatments.  

Technology like this is an attempt to make it easier and quicker to do pre-clinical investigations, before they go to full scale clinical trial. ’Drugs that only work in a selected small section of the patient population can be more effectively developed,’ says Jeans. 

This technology enters the controversial area of pharmacogenomics (see Chemistry World, July 2005, p32). One of GE Healthcare’s major goals is to develop personalised medicine. Before the company was created both Immelt and Castell believed that this was the future of medicine and healthcare, and it was instrumental in the new joint venture being a success.  

Healthy criticism 

Facing up to its critics, GE Healthcare recently hosted a debate at Oxford University to discuss personalised medicine. The debate raised the need for governments to prioritise providing support for developing nations. ’Nobody would disagree with that,’ says Jeans. ’Nobody’s going to develop healthcare technology with only one constituency in mind, medicine isn’t developed like that, it’s developed with diseases in mind.’  

Jeans mentions a genetic test for predisposition to bowel cancer, not a GE Healthcare product, but a useful example nonetheless. ’You can do a profile to see if you as an individual have got a high propensity for bowel cancer. That little test could be available for pennies all over the world and would be very useful in all countries.’ 

He says that GE Healthcare recognises the dilemma but adds that it is ’developing technology which is ubiquitously available and can be applied not just in the most wealthy parts of the world but actually in any part of the world.’ 

The similar outlook of the two chiefs has meant that GE healthcare has been able to adopt a strategy that suits both parts of the company, and consequently merging the two businesses has been fairly smooth. ’There was so much synergy between the strategies that it was a logical step,’ says Jeans. 

A key advantage of Amersham becoming part of GE has been the access to GE global research centres in the US, Germany and India. These centres cover all areas of GE’s business, allowing the former Amersham scientists access to a much broader range of scientific skills. According to Jeans these centres are involved in blue sky research, ’horizon research’ as he calls it.  

According to Anson, the company’s customers fall into two broad areas. They are either working in pharmaceutical or biotechnology companies engaged mainly in discovering new therapies for treating diseases, or they’re academic researchers working on the fundamental understanding of disease processes at the biological level. 

Once the ’box of tricks’ as Anson puts it, has been handed over to the customer, GE Healthcare’s interest doesn’t stop. ’We’re not blinkered enough to think that we’re the ones that will come up with all the new ideas,’ he says. The company thinks it is important, once the tools are in the customer’s hands, to look back with the customer to understand how the technology is being used. And from there it can try to predict where the next area of interest 
might be. 

A complete healthcare package 

The moment GE acquired Amersham, it created a unique business. It can now provide a complete package to its customers. The joining of the companies didn’t come without its critics. ’I think the other people in the industry were first of all surprised by [the merger],’ says Jeans, ’and now it’s been generally accepted that this is a very interesting and fundamentally important move. The truth of the matter is there is no competitor that actually does what we do.’ 

Jeans gives the example of positron emission tomography (PET), one of the latest developments in imaging. PET uses a combination of hardware, software and very short half life radioisotopes. What was once GE medical imaging provides the hardware and software and what was once Amersham can provide the radioisotopes.  

Jeans talks about what happens to the information when it comes off the PET scanner. He sees information technology as being crucial, and explains that in future, an image from the PET scanner will be transferred to a doctor’s office through an IT network.  

The concept is less futuristic than it sounds, and the UK’s National Health Service is already putting such a network in place, with the help of companies like GE Healthcare. ’You’ve got a combination of classical scanner technology, classical chemistry - short half life radioactivity chemistry - and very sophisticated information technology all coming together,’ says Jeans. ’It is obvious that one company that has that ability will do very well in the market place.’