Amersham Little Help to GE Healthcare in This Down Market

As befits this struggling economy, each of the Big Three in diagnostic imaging sounded downbeat in their 2008 year-end financial assessments. Siemens AG saw declining orders for imaging equipment in the US; Royal Philips Electronics NV experienced a 6% reduction in new order revenue in the fourth quarter, "largely if not totally driven by North America"; and GE Healthcare , a division of General Electric Co., reported that domestic order revenue was down nearly 30% in the quarter. As reported in The Gray Sheet, those cautionary comments "closely coincided with the release of multiple reports detailing hospitals’ reluctance to fund expensive capital projects." (See "Diagnostics Imaging Sector Hit By Hospitals' Dwindling Access to Capital," The Gray Sheet, February 2, 2009 Also see "Diagnostics Imaging Sector Hit By Hospitals’ Dwindling Access To Capital" - Medtech Insight, 2 February, 2009..)

But the problem for GE may lie deeper than a fall-off in instrument placements and downward pressures on reimbursement over all. More so than the other two, in addition to hardware, GE Healthcare focuses on the development of new imaging agents, owing to its acquisition of GE Healthcare Bio-Sciences Inc. in late 2003: Amersham’s contrast agent and medical isotopes businesses formed the basis for a new GE Healthcare division, Medical Diagnostics