By Malorye A. Branca

December 15, 2003 | After several years of shopping around, Amersham Biosciences settled on a well-heeled suitor -- and what a partner it found. The GE-Amersham Biosciences merger is one of the most intriguing deals in recent years. Besides adding yet another comfortably profitable business unit to the GE empire, the merger sets both companies on a path to realize a courageous vision -- pioneering diagnostics for personalized medicine. 

The deal pushes GE to the forefront of a nascent field, one that CEO Jeff Immelt described as “a game changer” during the company’s third-quarter earning conference call on October 10, the same day the deal was announced.

The $9.5-billion acquisition of Amersham Biosciences was blessed by good timing. Shortly after the deal, the FDA released its guidance on pharmacogenomics data (see  FDA Guidance: More Questions Than Answers), re-igniting interest in a once “exuberant” field. Over the past few years, investors have deserted pharmacogenomics, weary of waiting for the pay-off.

But GE’s calculated move will reap a staged series of rewards, with pharmacogenomics providing the icing on an already satisfying cake.

Once the acquisition is finalized, Sir William Castell, Amersham International’s CEO, will head a new entity called GE Healthcare Technologies, which will combine GE Medical’s diagnostics imaging, service, and healthcare-IT businesses with the diagnostic imaging and life sciences company. Amersham will bring approximately $2.7 million in annual revenue to GE Healthcare, which will be worth about $13 billion overall.

The first fruits will likely come from the union of Amersham’s reagents with GE’s body-imaging hardware, software, and related tools. PET and MRI are already part of GE’s fastest growing healthcare businesses. The trends of functional imaging, targeted therapies, and biomarkers should increase the demand for such products, Immelt said. “We could already see MRI and PET scanners being used in this area,” he said. “Molecular medicine is a great fit for GE and Amersham and gives us a headstart [toward personalized medicine].”

Beyond that, GE hopes Amersham will open new markets in drug discovery and development labs, where “Amersham has a play in each one of the critical areas,” Immelt said. Those are fields that GE has apparently been hankering to get into with its imaging equipment. “Some of the imaging tests today can be used in clinical trials,” said Andrew Carr, president of Amersham Biosciences. “We also see opportunity for imaging in basic drug discovery.”

But the bold vision is personalized medicine. “Amersham has been working for more than five years on enabling molecular and personalized medicine,” Carr said. “GE shares that vision, and has a powerful brand and market franchise.”

Immelt emphasized that GE has succeeded so far not by following trends, but by anticipating them. If he’s correct about this one, it should be another interesting ride.