Siemens Healthineers is raising its guidance for the year after receiving a huge boost from sales of its COVID-19-related diagnostics. The Erlangen, Germany -based company said revenue growth could be between 14% to $17% as opposed to the original forecast of 8% to 12%.
The company adjusted its basic earnings per share that were once projected to be between $1.96 and $2.19 to $2.28 to $2.46.
Siemens Healthineers recently closed on its $16.4 billion acquisition of Varian Medical Systems - one of the largest medtech deals announced in 2020. With Varian, the company was able to jump into the cancer care market.
In prepared remarks, Bernd Montag CEO of Siemens Healthineers AG, touted the progress the company has made over the past few months and the importance of adding Varian.
“The Siemens Healthineers team has done an outstanding job during the past months,” Montag said. “While we have further improved our operational performance and have once again made a valuable contribution to cope with this historical crisis, we have at the same time managed to successfully complete the largest transaction in our history. Together with Varian, we are making a leap in cancer care and a leap in our impact on global healthcare. With our even more comprehensive portfolio, we are addressing many of the most important diseases. Against the backdrop of continued strong business development in the second quarter and the transformative merger with Varian, we have again raised our outlook for the current fiscal year.”
COVID-19 Test Revenue Drives M&A in Diagnostics Industry
Siemens Healthineers joins a group of companies with diagnostic offerings that have seen a surge in revenue because of the demand for COVID-19 tests.
Waltham, MA-based Hologic recently saw its 2Q21 revenue increase from $103.4% to $1.54 billion. Thermo Fisher saw its revenue jump 59% to $9.91 billion. LabCorp recently saw its revenues jump about 50% to $4.16 billion – compared to this time last year.
It shouldn’t come as a surprise to some that these companies have been actively involved in M&A. Thermo Fisher Scientific announced it was acquiring Mesa Biotech for about $450 million in cash with the potential for $100 million in milestones. The company then said it would acquire PPD, a provider of clinical research services to the pharma and biotech industry, for $17.4 billion.
Hologic has seen four deals this year and kicked off 2021 with the acquisition of Somatex for $64 million. The deal would help the firm expand its breast health solutions.
Within the same week of the Somatex deal, Hologic announced it would acquire Biotheranostics, a private company that provides molecular diagnostic tests for breast and metastatic cancers, for $230 million. The company then acquired Diagenode for $159 million.
Early last month, the company said it was acquiring Mobidiag Oy, a molecular diagnostics firm, for about $795 million. The acquisition is expected to close early in 4Q21.