13 Jul Crazy like a Google? With GE-Abbott deal scrapped, could Google be next buyer?
CNN and Medical Device Link recently announced that the $8 billion deal for GE Healthcare to acquire Abbott Diagnostics has been scrapped.
In my blog posting about the GE-Abbott deal soon after it was announced, I recognized that this potentially was a great win-win situation for both sides. For more details on why, please feel free to read my column in WTN News from this past February.
At that time, I also pointed out that the potential challenge for the deal was Abbott’s decision to not divest of the molecular diagnostics unit. Abbott management probably (and correctly) estimated that molecular diagnostics would likely have a higher intrinsic growth potential than the other diagnostic units. They were banking, of course, on the rise of personalized medicine and associated genomics technologies, as well as more potential synergies with the core pharmaceutical business with respect to pharmacogenomics.
Very importantly, that article also pointed out that in order to have made this really work, both companies should further advance the informational (e.g. information technology) aspects around diagnostics and move beyond simply the chemistry and analytics.
This was particularly important for GE Healthcare as it could leverage its own healthcare IT capabilities in order to “uncommoditize” the diagnostics services it was to have acquired. It is possible that the lack of the molecular diagnostics component made this strategy problematic.
Google search for diagnostics?
Who else could be a potential buyer? How about a very strong IT company whose main core competency and mission revolves around information, and who wants to get into healthcare? That kind of company may be a candidate to pick up the pieces after GE. Obviously, this IT company would need to have a lot of money.
Crazy as it sounds, Google should be interested. Google already has a stake in 23andMe, a small biotech company co-founded Anne Wojcicki, who is married to Google’s Sergey Brin.
It may not be such a crazy idea. Google knows nearly everything about your desktop; the search-engine giant may want to know everything about what’s inside your body as well.
• Abbott, GE agree call off their diagnostic acquisition deal
• GE acquisition may boost “early” healthcare strategy
Previous articles by Ogan Gurel
• Ogan Gurel: Reforming FDA: Focus on safety, let market judge efficacy
• Dr. Ogan Gurel: FDA: Tortoise, hare, or something else?
• Dr. Ogan Gurel: Who is minding the Innovation Gap?
• Barriers will not stop convergence of medical technologies
• Ogan Gurel: Abbott vs. Thailand has implications for innovation and access
This article previously appeared in MidwestBusiness.com, and was reprinted with its permission.
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