Dive Brief:
- Siemens Healthineers will buy radiation oncology systems and software maker Varian Medical in an all-cash deal valued at $16.4 billion, the companies announced Sunday, confirming a Bloomberg report Saturday.
- The likely biggest deal in medtech so far this year gives Siemens Healthineers, which formally spun out of the German conglomerate via a 2018 IPO, a suite of cancer treatment technologies, including a growing proton therapy business.
- The companies expect the deal to close in the first half of next year. The Varian brand will continue to operate as an independent company under Siemens after the deal closes, the companies said.
Dive Insight:
The deal is an outlier in a year when medtech deal values were down 88% in the first half of the year, according to an analysis by PwC.
The combination of Siemens Healthineers and Varian Medical Systems tops Thermo Fisher’s bid for Qiagen, originally valued at $11.5 billion before Thermo Fisher increased its per-share offer for Qiagen by 10% in mid-July.
Siemens Healthineers plans to acquire all of Varian’s outstanding shares for $177.50 in cash. That’s a premium of 24% over Varian’s closing price Friday, and a 42% premium over the 30-day weighted volume average closing price.
Also Sunday, Varian announced fiscal third quarter results, revealing its revenues fell 16% to $694 million as many health systems have reined in spending on capital equipment amid financial strain from managing COVID-19. About 94% of that revenue came from oncology systems, down 17% on the year. Likewise, orders for oncology systems were down 14%.
Proton technologies brought in $33 million in revenue, a gain of 6%, which Varian said was mainly driven by growth in services revenue.
In reporting the prior quarter’s results in May, despite eking out a 2% increase in revenue, Varian said early effects of the pandemic resulted in delays to oncology procedures and to installations of equipment in hospitals.
Siemens Healthineers has been active in diagnostic testing for COVID-19, with its antibody test gaining recognition from U.K. public health regulators as having higher accuracy than tests from competitors Abbott, DiaSorin and Roche.
FDA said Friday it authorized two Siemens Healthineers “semi-quantitative” serology tests meant to estimate the amount of antibodies in a person’s blood — the first OK’d in that category. But FDA in vitro diagnostics lead Tim Stenzel hedged the usefulness of antibody test results for now.
“There are still many unknowns about what the presence of SARS-CoV-2 antibodies may tell us about potential immunity, but today’s authorizations give us additional tools to evaluate those antibodies as we continue to research and study this virus,” Stenzel said in a statement.
Original Article: (https://www.medtechdive.com/news/varian-sold-to-siemens-healthineers-in-164b-all-cash-deal/582753/)
