By Ogan Gurel MD

CNN and Medical Device Link have just announced that the $8 Billion deal for GE Healthcare to acquire Abbott Diagnostics has been scrapped.

In my blog posting commenting on the GE - Abbott deal soon after it was announced (see: What’s More Important in Medicine: Diagnostics, Therapeutics or Prognosis – 2/5/07?), I recognized that this potentially was a great win-win situation for both sides. For more details on why - please see feel free to read that blog posting back from this 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 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. IT) 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.

Who could thus be a potential buyer? To this end, a very strong IT company of some sort whose main core competency and mission revolves around information and who wants to get into healthcare may be a such 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: Should Google be interested? Google already has a stake in a small biotech company called 23andMe which is co-founded by Anne Wojcicki (Sergey Brin’s wife).

It may not be such a crazy idea. Google nearly knows everything about your desktop; they may also want to know everything about what’s inside your body as well.

Ogan Gurel, MD MPhil
gurel@aesisgroup.com
This article originally published on Dr. Gurel’s Life Sciences Business Daily (http://blog.aesisgroup.com/). Visit the site for more articles about the business of life sciences.