Kodak restructures to ramp up digital business; health unit is on the block
Eastman Kodak Company recently announced a strategic reorganization in an effort to gear itself for further growth in the booming digital technology market. A big part of this change will come in the selling of the Health Group — and Kodak said in early May it was looking for buyers. This could be a tough sell, as the division has been underperforming.
The unit is valued at $2.7 billion, but sales were down in 2005 by 7 percent to $585 million and earnings dropped to $46 million, from $78 million previously.
“The industry is maturing and there’s a ton of opportunity in the health IT space. We’re just looking for alternatives to go out and build on everything we’ve created,” said Kevin Hobert, president, Kodak Health Group. He added that this transition “certainly creates some uncertainty, but it also creates opportunity and that can be energizing.”
Goldman, Sachs & Co. is advising Kodak on the sale of the Health Group. And despite a rumor of a potential suitor, no public announcements have yet been made as to which companies may be interested in the purchase.
Listen to Kodak Health Group President Kevin Hobert on the potential sale and impact on customers.
• Future holds room for both digital and traditional modalities
Don’t expect film x-ray and other “traditional” radiology systems to go extinct anytime too soon. According to a new report from Kalorama Information called Medical Imaging Markets, Volume 1: Radiography, digital x-ray systems, for example, currently still make up just 30 percent of the worldwide radiography market.
However, though both types of systems will continue to exist, the digital market is booming and by 2010 digital radiographic equipment including x-ray and mammography is likely to experience double-digit growth in the United States.
• Many breast cancer survivors skip regular mammograms
A new study finds that many breast cancer survivors begin to skip annual mammography exams after a few years. This is problematic because these women are at a higher risk of a recurrence or a new malignancy in the other breast at some point in the future. During a five-year period, only one in three women studied in this high-risk population had received regular annual mammograms, according to a study published in the June issue of CANCER.
Hologic acquires three companies in strategic move
Hologic Inc. has recently made three acquisitions in an effort to expand its market presence in key areas. The company announced plans to purchasing Suros Surgical Systems Inc., a manufacturer of devices used for minimally invasive biopsy and tissue excision; has acquired photoconductor materials maker AEG Elektrofotografie GmbH to gain control of detector manufacturing; and most significantly, announced plans to acquire CAD leader R2 Technology Inc.
R2 Technology has more than 2,500 mammo-graphy CAD installations worldwide. R2’s CAD systems will be integrated with Hologic’s mammography product portfolio.
Siemens buying DPC to enter in-vitro market
Siemens Medical Solutions and Diagnostic Products Corporation (DPC) have announced a merger agreement under which Siemens will acquire DPC for approximately $1.86 billion. The move is an effort by Siemens to shift into the in-vitro diagnostics market. DPC is one of the global provider of immunodiagnostics, focusing on developing, manufacturing and distributing automated body fluid analyzers and tests some of which are related to cancer and cardiac disease, as well as hormone and allergy conditions.
Siemens intends to expand its existing healthcare portfolio to enable early and specific diagnosis and individualized patient therapy.
Bill calls for repeal of Medicare payments cuts for medical imaging
U.S. House of Representatives member Carolyn McCarthy (D-N.Y.) recently introduced House Resolution (HR5238) which takes aim at imaging reimbursement cuts that are included in the Deficit Reduction Act (DRA) of 2005 passed by the House of Representatives in February. McCarthy’s resolution calls for the repeal of the cuts.
The original DRA created Medicare reimbursement cuts for out-of-hospital medical imaging procedures which could have reduced access to much-needed imaging services or limited the number of Medicare patients who physicians would take. The bill, in its original form, could also cause some radiologists in rural areas to relocate to hospitals in larger cities.