07.20.22
Rank: #4 (Last year: #7)
€18.00 Billion ($20.95 Billion)
Prior Fiscal: €14.46 Billion
Percentage Change: +24%
R&D Expenditure: €1.55B
Best FY21 Quarter: Q4 €5.16B
Latest Quarter: Q2 €5.46B
No. of Employees: 66,100
Global Headquarters: Erlangen, Germany
KEY EXECUTIVES:
Bernd Montag, Ph.D., CEO
Jochen Schmitz, Ph.D., CFO
Darleen Caron, Chief HR Officer and Labor Director
Elisabeth Staudinger, MA, Member of the Managing Board
Consolidation and M&A are nothing new for the medical device industry. They’ve been a constant for “both sides of the table”—OEMs and the supply chain. Even the chaos caused by the pandemic didn’t derail this trend. As a primary example of that, nearing the end of its 2020 fiscal, Siemens Healthineers announced it was acquiring another MPO Top 30 medical device firm—Varian—in a deal reported to be valued at $16.4 billion.
While the transaction was announced in August 2020, the closing did not take place until well into the firm’s 2021 fiscal after getting the green light on several necessary stepping stones, such as antitrust clearance and approval from the Committee on Foreign Investment in the United States. Approval of the deal from the European Commission, however, came with conditions. Primarily, it required Siemens Healthineers maintain the interoperability of imaging and oncology software with third-party offerings going forward.
Finally, on April 15, 2021, it was announced the transaction to acquire Varian was complete. The deal expanded Siemens’ role in the treatment and care of patients with cancer, as well as addressing other conditions. Varian would be incorporated into the organization as a new business segment, which tied into the company’s Strategy 2025 plan.
Strategy 2025, announced in January 2018 (just two months prior to the spinoff of the firm from parent Siemens), centered around five key points:
ANALYST INSIGHTS: It is with enthusiasm that I note it took until #4 on the list before COVID is mentioned. While not exciting, Siemens remains a solid company that is executing across its portfolio (after integrating the Varian acquisition in 2021). They did receive a nice COVID boost in 2021/2022 due to their COVID diagnostic testing results. It will be interesting to observe how they use that additional cashflow momentum in 2023.
The two companies had a well-established relationship to diagnose and treat cancer, branded as EnVision. This partnership leveraged innovation from each organization to create a comprehensive digital, diagnostic, and therapeutic ecosystem that included treatment management. Now under one roof, the pairing will use AI-assisted analytics to advance data-driven precision care and optimize cancer diagnosis, care delivery, and post-treatment protocols.
“Through the transformative combination of Varian and Siemens Healthineers, our united company will address the growing need for personalized, data-driven diagnosis and precision cancer care that enables us to fight back against globally increasing cancer rates,” said Chris Toth, CEO of Varian. “By bringing together our unique and highly complementary portfolios and capabilities, we will support oncology clinicians and patients in achieving better outcomes and move even closer to achieving our vision of a world without fear of cancer.”
The newly established division was credited as contributing €1.3 billion to the company’s overall revenue figure of €18 billion for its 2021 fiscal year. While there was no comparison able to be made to the prior period, the company did note that product innovations led to higher customer investment in the U.S. and Western Europe. In addition, other regions were driven by a need to expand access to oncology equipment and services in underserved areas.
The capabilities of Varian joined a firm already showcasing its innovative prowess in addressing other healthcare concerns during the fiscal year. Specifically, the Healthineers diagnostic division was helping in the battle against COVID-19 through a bevy of testing products.
In October 2020, the company gained a CE mark for the release of its CLINITEST rapid antigen test for the detection of COVID-19. It provided a diagnosis within 15 minutes to help reduce the chance of disease spread and speed up the time a person would enter a quarantine period. The test demonstrated 96.72% sensitivity and 99.22% specificity based on a clinical study of 317 subjects.
Then, in January 2021, the organization announced the CLINITEST obtained another CE mark; this time for the ability for it to be used with swabs from the anterior part of the nose, in addition to the nasopharyngeal swab method. In this case, the diagnostic offered 97.3% sensitivity and 100% specificity.
February saw yet another acceptance for the test as it gained “special approval” from the German Federal Office for Drugs and Medical Devices for self-administration by lay persons in the country. In May 2021, the approval was extended to all CE member countries as the CE mark was granted for laypersons age 12 and older to use the test. At the time, Siemens was one of the first to offer an approved home diagnostic test. An emergency use authorization (EUA) from the U.S. FDA wouldn’t be granted for the self-test until the end of the year, after the close of the 2021 fiscal period.
Further supporting the effort to address the coronavirus, Siemens’ SARS-CoV-2 IgG Antibody Test was granted a CE mark in November 2020 and was also submitted to the FDA for an EUA. It measured neutralizing antibodies, which are critical as they defend cells from infection by COVID-19. The test could be used to assess the effectiveness of the eventual vaccines that would be announced and made available a month later.
Further products launched for the coronavirus also included the SARS-CoV-2 Antigen Assay and an AI-based COVID-19 Severity Algorithm. The assay gained CE mark status in February 2021 and was provided as an accurate, high-capacity testing solution to diagnose COVID-19. It enabled testing to be run on automated immunoassay analyzers (the Atellica Solution and ADVIA Centaur systems). The algorithm, on the other hand, was developed to help physicians identify patients at risk of progressing to severe outcomes. By entering a potential patient’s lab values and age, the algorithm generated a COVID-19 clinical severity score, including projected probability of progression to ventilator use, end-stage organ damage, and 30-day in-hospital mortality. The company partnered with the Hospital Universitario of La Paz, Spain, to gather COVID-19 patient data to build the algorithm and later to test the accuracy of the tool via retrospective analysis.
While COVID-related diagnostics generated the most headlines for the firm, they weren’t they only new releases that were announced. In December 2020, the company announced it had gained a CE mark and FDA clearance for its epoc NXS Host mobile computer. The epoc Blood Analysis System is an easy-to-use, hand-held device with intuitive software application to further advance point-of-care testing. The system incorporates caregiver suggestions that enhance performance and streamline the testing workflow for critically ill patients.
Addressing the need to expedite the diagnosis of a heart attack, Siemens’ Atellica VTLi Patient-Side Immunoassay Analyzer obtained a CE mark in April 2021. The analyzer provides lab standard, high-sensitivity cardiac troponin I test results to clinicians in eight minutes using a patient’s fingerstick blood sample. According to the company, the solution represents an industry-first technology, providing results at the patient’s side.
Finally, the organization announced the launch of its Sysmex’s CN-3000 and CN-6000 Hemostasis Systems for mid- and high-volume coagulation testing. A wide array of both routine and specialty coagulation assays from Siemens Healthineers that help identify blood coagulation disorders (such as abnormal blood clotting or bleeding) can be performed on the systems, representing a compact and comprehensive hemostasis testing solution.
Growth of the diagnostic segment year-over-year was the biggest contributing factor to the company’s overall revenue gain in its 2021 fiscal. The unit posted €5.42 billion to the overall figure, representing a 38% rise over 2020’s figure of €3.92 billion. Siemens Healthineers cited the increase in the market for point-of-care and lab tests as a primary reason, specifically those tied to the COVID-19 pandemic.
The largest contributing division, however, to the firm’s almost €18 billion revenue figure was its Imaging unit. The segment saw high, single-digit growth (8%), which brought its sales figure to almost €10 billion (€9.82 billion). According to the firm’s annual report, the increase was mainly due to large, COVID-driven demand for computer tomography systems and the beginning of normalization in all other modalities. The firm also shared a series of newsworthy product announcements centered around these products during the 12-month period.
The firm’s new fluoroscopy system—the Luminos Lotus Max—made its debut at the annual French JFR 2020. The remote-controlled solution offers versatility in clinical examinations, as it combines radiographic and fluoroscopic imaging with orthopedic studies such as long leg or spinal examinations and basic interventions. Since these capabilities are highly integrated, users can quickly switch between the different imaging modalities.
At another European event (virtual 33rd Annual Congress of the European Association of Nuclear Medicine), the company introduced its Biograph Vision Quadra—a CE-marked positron emission tomography/computed tomography scanner—designed for clinical use as well as translational research.
Unveiled at its SHAPE 21 Imaging Press Conference in November 2020, Siemens Healthineers presented Syngo Carbon—a new software environment for enterprise-wide image reading and reporting. The system enables easy access to all relevant data generated in the processes of imaging and reporting. Data from different departments is drawn out from various silos and integrated as part of a unified environment.
At the 2020 Annual Meeting of the Radiological Society of North America, the organization debuted its Cios Flow mobile C-arm, developed to make everyday workflows in imaging for surgical interventions easier and more efficient. Cios Flow can be used by many different medical disciplines in the OR, including orthopedics and trauma surgery, spinal surgery, vascular surgery, as well as pain therapy.
In March 2021, the company introduced new solutions for breast image reading and mammography workflow optimization. Through the Mammovista B.smart and the Teamplay Mammo Dashboard (a tool for dashboard-based visualization of key performance indicators in the breast imaging process), the company is extending its digital offerings for breast care. The Mammovista B.smart user interface was designed to reduce the number of clicks required for specific tasks wherever possible.
Two months later, the firm launched a new CT scanner for fast diagnosis and precise interventions in demanding clinical areas. The Somatom X.ceed has a large bore of 82 centimeters and offers user-friendly tablet operation. It also comes with two “companions” integrated for automated user guidance—myExam Companion guides users through diagnostic procedures, while myNeedle Companion supports targeted needle path planning and laser-guided insertion across multiple modalities.
The company’s AcuNav Volume ICE (intracardiac echocardiography) catheter—a therapy-enabling imaging guide that provides real-time, wide-angle visualization of heart anatomy during structural heart and electrophysiology procedures—received a CE mark in June 2021.
At the close of its 2021 fiscal, Siemens Healthineers made two additional announcements. The first was the launch of its Luminos Impulse, a fluoroscopy system with a new design and features shared by high-end fluoroscopy systems. Highlights of the system include a seamless imaging chain, comprehensive dose optimization, cybersecurity features, and detector-sharing capabilities for radiography.
The second was the 510(k) clearance of the Naeotom Alpha, the world’s first photon-counting CT. The centerpiece of this innovation is the new photon-counting detector, which provides an active detection layer that consists of a cadmium telluride one crystal and offers clear advantages over conventional CT detectors. Traditional CT systems use a two-step process in producing the final image; the photon-counting CT detector performs the action in one step, improving image sharpness and contrast.
Siemens’ final unit, Advanced Therapies, saw a gain of 5% in 2021, finishing with a contribution of €1.72 billion. The growth was attributed primarily to the return of elective surgeries as well as the return of patients.
€18.00 Billion ($20.95 Billion)
Prior Fiscal: €14.46 Billion
Percentage Change: +24%
R&D Expenditure: €1.55B
Best FY21 Quarter: Q4 €5.16B
Latest Quarter: Q2 €5.46B
No. of Employees: 66,100
Global Headquarters: Erlangen, Germany
KEY EXECUTIVES:
Bernd Montag, Ph.D., CEO
Jochen Schmitz, Ph.D., CFO
Darleen Caron, Chief HR Officer and Labor Director
Elisabeth Staudinger, MA, Member of the Managing Board
Consolidation and M&A are nothing new for the medical device industry. They’ve been a constant for “both sides of the table”—OEMs and the supply chain. Even the chaos caused by the pandemic didn’t derail this trend. As a primary example of that, nearing the end of its 2020 fiscal, Siemens Healthineers announced it was acquiring another MPO Top 30 medical device firm—Varian—in a deal reported to be valued at $16.4 billion.
While the transaction was announced in August 2020, the closing did not take place until well into the firm’s 2021 fiscal after getting the green light on several necessary stepping stones, such as antitrust clearance and approval from the Committee on Foreign Investment in the United States. Approval of the deal from the European Commission, however, came with conditions. Primarily, it required Siemens Healthineers maintain the interoperability of imaging and oncology software with third-party offerings going forward.
Finally, on April 15, 2021, it was announced the transaction to acquire Varian was complete. The deal expanded Siemens’ role in the treatment and care of patients with cancer, as well as addressing other conditions. Varian would be incorporated into the organization as a new business segment, which tied into the company’s Strategy 2025 plan.
Strategy 2025, announced in January 2018 (just two months prior to the spinoff of the firm from parent Siemens), centered around five key points:
- Utilizing its unique position in the in-vivo and in-vitro markets to combine data and knowledge around precision medicine and make it relevant for clinical use
- Using data and artificial intelligence to integrate existing and innovative technologies for therapy
- Coordinating and optimizing the patient journey through the healthcare continuum
- Developing a full range of technical, operational, and clinical service offerings that are more effective and more efficient by using technologies from Siemens Healthineers
- Continuing to develop and invest in capabilities in artificial intelligence that support the above areas
ANALYST INSIGHTS: It is with enthusiasm that I note it took until #4 on the list before COVID is mentioned. While not exciting, Siemens remains a solid company that is executing across its portfolio (after integrating the Varian acquisition in 2021). They did receive a nice COVID boost in 2021/2022 due to their COVID diagnostic testing results. It will be interesting to observe how they use that additional cashflow momentum in 2023.
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
The two companies had a well-established relationship to diagnose and treat cancer, branded as EnVision. This partnership leveraged innovation from each organization to create a comprehensive digital, diagnostic, and therapeutic ecosystem that included treatment management. Now under one roof, the pairing will use AI-assisted analytics to advance data-driven precision care and optimize cancer diagnosis, care delivery, and post-treatment protocols.
“Through the transformative combination of Varian and Siemens Healthineers, our united company will address the growing need for personalized, data-driven diagnosis and precision cancer care that enables us to fight back against globally increasing cancer rates,” said Chris Toth, CEO of Varian. “By bringing together our unique and highly complementary portfolios and capabilities, we will support oncology clinicians and patients in achieving better outcomes and move even closer to achieving our vision of a world without fear of cancer.”
The newly established division was credited as contributing €1.3 billion to the company’s overall revenue figure of €18 billion for its 2021 fiscal year. While there was no comparison able to be made to the prior period, the company did note that product innovations led to higher customer investment in the U.S. and Western Europe. In addition, other regions were driven by a need to expand access to oncology equipment and services in underserved areas.
The capabilities of Varian joined a firm already showcasing its innovative prowess in addressing other healthcare concerns during the fiscal year. Specifically, the Healthineers diagnostic division was helping in the battle against COVID-19 through a bevy of testing products.
In October 2020, the company gained a CE mark for the release of its CLINITEST rapid antigen test for the detection of COVID-19. It provided a diagnosis within 15 minutes to help reduce the chance of disease spread and speed up the time a person would enter a quarantine period. The test demonstrated 96.72% sensitivity and 99.22% specificity based on a clinical study of 317 subjects.
Then, in January 2021, the organization announced the CLINITEST obtained another CE mark; this time for the ability for it to be used with swabs from the anterior part of the nose, in addition to the nasopharyngeal swab method. In this case, the diagnostic offered 97.3% sensitivity and 100% specificity.
February saw yet another acceptance for the test as it gained “special approval” from the German Federal Office for Drugs and Medical Devices for self-administration by lay persons in the country. In May 2021, the approval was extended to all CE member countries as the CE mark was granted for laypersons age 12 and older to use the test. At the time, Siemens was one of the first to offer an approved home diagnostic test. An emergency use authorization (EUA) from the U.S. FDA wouldn’t be granted for the self-test until the end of the year, after the close of the 2021 fiscal period.
Further supporting the effort to address the coronavirus, Siemens’ SARS-CoV-2 IgG Antibody Test was granted a CE mark in November 2020 and was also submitted to the FDA for an EUA. It measured neutralizing antibodies, which are critical as they defend cells from infection by COVID-19. The test could be used to assess the effectiveness of the eventual vaccines that would be announced and made available a month later.
Further products launched for the coronavirus also included the SARS-CoV-2 Antigen Assay and an AI-based COVID-19 Severity Algorithm. The assay gained CE mark status in February 2021 and was provided as an accurate, high-capacity testing solution to diagnose COVID-19. It enabled testing to be run on automated immunoassay analyzers (the Atellica Solution and ADVIA Centaur systems). The algorithm, on the other hand, was developed to help physicians identify patients at risk of progressing to severe outcomes. By entering a potential patient’s lab values and age, the algorithm generated a COVID-19 clinical severity score, including projected probability of progression to ventilator use, end-stage organ damage, and 30-day in-hospital mortality. The company partnered with the Hospital Universitario of La Paz, Spain, to gather COVID-19 patient data to build the algorithm and later to test the accuracy of the tool via retrospective analysis.
While COVID-related diagnostics generated the most headlines for the firm, they weren’t they only new releases that were announced. In December 2020, the company announced it had gained a CE mark and FDA clearance for its epoc NXS Host mobile computer. The epoc Blood Analysis System is an easy-to-use, hand-held device with intuitive software application to further advance point-of-care testing. The system incorporates caregiver suggestions that enhance performance and streamline the testing workflow for critically ill patients.
Addressing the need to expedite the diagnosis of a heart attack, Siemens’ Atellica VTLi Patient-Side Immunoassay Analyzer obtained a CE mark in April 2021. The analyzer provides lab standard, high-sensitivity cardiac troponin I test results to clinicians in eight minutes using a patient’s fingerstick blood sample. According to the company, the solution represents an industry-first technology, providing results at the patient’s side.
Finally, the organization announced the launch of its Sysmex’s CN-3000 and CN-6000 Hemostasis Systems for mid- and high-volume coagulation testing. A wide array of both routine and specialty coagulation assays from Siemens Healthineers that help identify blood coagulation disorders (such as abnormal blood clotting or bleeding) can be performed on the systems, representing a compact and comprehensive hemostasis testing solution.
Growth of the diagnostic segment year-over-year was the biggest contributing factor to the company’s overall revenue gain in its 2021 fiscal. The unit posted €5.42 billion to the overall figure, representing a 38% rise over 2020’s figure of €3.92 billion. Siemens Healthineers cited the increase in the market for point-of-care and lab tests as a primary reason, specifically those tied to the COVID-19 pandemic.
The largest contributing division, however, to the firm’s almost €18 billion revenue figure was its Imaging unit. The segment saw high, single-digit growth (8%), which brought its sales figure to almost €10 billion (€9.82 billion). According to the firm’s annual report, the increase was mainly due to large, COVID-driven demand for computer tomography systems and the beginning of normalization in all other modalities. The firm also shared a series of newsworthy product announcements centered around these products during the 12-month period.
The firm’s new fluoroscopy system—the Luminos Lotus Max—made its debut at the annual French JFR 2020. The remote-controlled solution offers versatility in clinical examinations, as it combines radiographic and fluoroscopic imaging with orthopedic studies such as long leg or spinal examinations and basic interventions. Since these capabilities are highly integrated, users can quickly switch between the different imaging modalities.
At another European event (virtual 33rd Annual Congress of the European Association of Nuclear Medicine), the company introduced its Biograph Vision Quadra—a CE-marked positron emission tomography/computed tomography scanner—designed for clinical use as well as translational research.
Unveiled at its SHAPE 21 Imaging Press Conference in November 2020, Siemens Healthineers presented Syngo Carbon—a new software environment for enterprise-wide image reading and reporting. The system enables easy access to all relevant data generated in the processes of imaging and reporting. Data from different departments is drawn out from various silos and integrated as part of a unified environment.
At the 2020 Annual Meeting of the Radiological Society of North America, the organization debuted its Cios Flow mobile C-arm, developed to make everyday workflows in imaging for surgical interventions easier and more efficient. Cios Flow can be used by many different medical disciplines in the OR, including orthopedics and trauma surgery, spinal surgery, vascular surgery, as well as pain therapy.
In March 2021, the company introduced new solutions for breast image reading and mammography workflow optimization. Through the Mammovista B.smart and the Teamplay Mammo Dashboard (a tool for dashboard-based visualization of key performance indicators in the breast imaging process), the company is extending its digital offerings for breast care. The Mammovista B.smart user interface was designed to reduce the number of clicks required for specific tasks wherever possible.
Two months later, the firm launched a new CT scanner for fast diagnosis and precise interventions in demanding clinical areas. The Somatom X.ceed has a large bore of 82 centimeters and offers user-friendly tablet operation. It also comes with two “companions” integrated for automated user guidance—myExam Companion guides users through diagnostic procedures, while myNeedle Companion supports targeted needle path planning and laser-guided insertion across multiple modalities.
The company’s AcuNav Volume ICE (intracardiac echocardiography) catheter—a therapy-enabling imaging guide that provides real-time, wide-angle visualization of heart anatomy during structural heart and electrophysiology procedures—received a CE mark in June 2021.
At the close of its 2021 fiscal, Siemens Healthineers made two additional announcements. The first was the launch of its Luminos Impulse, a fluoroscopy system with a new design and features shared by high-end fluoroscopy systems. Highlights of the system include a seamless imaging chain, comprehensive dose optimization, cybersecurity features, and detector-sharing capabilities for radiography.
The second was the 510(k) clearance of the Naeotom Alpha, the world’s first photon-counting CT. The centerpiece of this innovation is the new photon-counting detector, which provides an active detection layer that consists of a cadmium telluride one crystal and offers clear advantages over conventional CT detectors. Traditional CT systems use a two-step process in producing the final image; the photon-counting CT detector performs the action in one step, improving image sharpness and contrast.
Siemens’ final unit, Advanced Therapies, saw a gain of 5% in 2021, finishing with a contribution of €1.72 billion. The growth was attributed primarily to the return of elective surgeries as well as the return of patients.
