GE HealthCare to Acquire Remaining 50% Stake in Nihon Medi-Physics (NMP), a Leading Radiopharmaceutical Company in Japan, from Sumitomo Chemical

Rhea-AI Summary

GE HealthCare (GEHC) has agreed to acquire the remaining 50% stake in Nihon Medi-Physics (NMP) from Sumitomo Chemical, aiming to assume full ownership of the Japanese radiopharmaceutical company. NMP, which generated revenues of 28.2B JPY (~$183M) in 2023, specializes in developing and manufacturing radiopharmaceuticals for SPECT and PET molecular imaging procedures. The company operates 13 manufacturing facilities and focuses on research and development of radiotracers and theranostics. The transaction, expected to close in early 2025 subject to regulatory approvals, will strengthen GE HealthCare's Pharmaceutical Diagnostics segment and enhance patient access to next-generation radiopharmaceuticals in Japan and Asian markets.

Positive

• Transaction expected to be accretive to Adjusted EPS after year one
• Expansion in Japan, the third largest pharmaceutical market globally
• Full control over NMP's established infrastructure of 13 manufacturing facilities
• NMP's current revenue of 28.2B JPY (~$183M)

Negative

• Transaction will be EPS neutral in the first year
• Regulatory approval required, with closing not expected until early 2025

Insights

Financial Analyst

This strategic acquisition significantly strengthens GE HealthCare's position in the $7 billion global molecular imaging market. The deal to acquire the remaining 50% stake in NMP, which generated $183 million in revenue in 2023, provides full control over a profitable radiopharmaceutical business in Japan, the world's third-largest pharmaceutical market.

The transaction offers multiple value drivers:

• Vertical integration in the growing radiopharmaceutical sector
• Enhanced market access in Asia through NMP's 13 manufacturing facilities
• Expansion of proprietary radiotracer portfolio
• Strengthened precision care strategy in Asia

The deal's structure, expected to be EPS neutral in year one and accretive thereafter, suggests careful financial planning and potential synergies. This acquisition positions GEHC to capitalize on the expanding molecular imaging and theranostics markets, particularly in Asia.

Medical Research Analyst

This acquisition significantly enhances GE HealthCare's molecular imaging capabilities, particularly in neurology, cardiology and oncology diagnostics. NMP's portfolio includes important diagnostic tools like VIZAMYL for Alzheimer's detection, DaTSCAN for Parkinson's evaluation and MYOVIEW for coronary artery disease assessment. The company's 13 manufacturing facilities and R&D focus on radiotracers and theranostics research represent substantial infrastructure for developing next-generation radiopharmaceuticals.

The timing aligns with growing demand for molecular imaging in disease detection and treatment monitoring. Japan's position as a leading country in cyclotron facilities makes this acquisition particularly strategic for advancing precision medicine in Asia.

• GE HealthCare to acquire 50% stake from Sumitomo Chemical to assume full ownership of NMP, subject to regulatory approvals
• As part of GE HealthCare, NMP, already a leading radiopharmaceutical company in Japan, will enhance patient access to next-generation radiopharmaceuticals that enable detection and diagnosis of disease
• Acquisition positions NMP to become partner of choice for global innovators looking to bring novel radiopharmaceuticals to Japan and other Asian markets
• Transaction bolsters GE HealthCare’s Pharmaceutical Diagnostics segment and demonstrates its commitment to shaping the future of Molecular Imaging

CHALFONT ST GILES, England--(BUSINESS WIRE)-- GE HealthCare (Nasdaq: GEHC) has agreed to acquire full ownership of Nihon Medi-Physics Co., Ltd (NMP), by purchasing from Sumitomo Chemical (TYO: 4005) the 50% stake it does not already own. As part of GE HealthCare, NMP can build on its expertise developing and manufacturing proprietary and in-licensed radiopharmaceuticals used in single photon emission computed tomography (SPECT) and positron emission tomography (PET) molecular imaging procedures to detect and diagnose disease. Sumitomo and GE HealthCare expect the agreement to close in early 2025, subject to regulatory approvals.

Nihon Medi-Physics headquarters and woman looking at molecular imaging images (Photo: Business Wire)

NMP’s product portfolio includes GE HealthCare radiopharmaceuticals used to enable clinical images across neurology, cardiology and oncology procedures, such as its amyloid visualization radiotracer, VIZAMYL® Injection (Flutemetamol (¹⁸F) Injection), used in the Alzheimer’s pathway; DaTSCAN® Injection (Ioflupane (¹²³I) injection) used to evaluate patients with suspected Parkinson’s Disease or Dementia with Lewy Bodies; and MYOVIEW® (Technetium (^99mTc) Tetrofosmin), used in SPECT myocardial perfusion imaging for the evaluation of known or suspected coronary artery disease. NMP, headquartered in Tokyo, was formed in 1973 and generated revenues of 28.2B JPY (~$183M) in 2023. In addition to 13 manufacturing facilities, NMP also focuses on research and development, including nonclinical and clinical development of radiotracers and theranostics research. GE HealthCare has held its 50% stake in NMP since acquiring Amersham plc in 2004 and holds three positions on its Board of Directors.

Kevin O’Neill, President & CEO of the Pharmaceutical Diagnostics (PDx) segment of GE HealthCare, said: “As the third largest pharmaceutical market in the world¹, and amongst the leading countries by number of cyclotrons², Japan is on a path to becoming a leader in the $7 billion molecular imaging global market and a center of excellence for Asian markets. NMP will play a key role in that journey, including bringing its deep expertise and scale to global innovators looking to bring novel products to the Japan market and beyond. This will strengthen our precision care strategy in Asia and our existing footprint in Japan, where our contrast media and medical devices are used every day to enable imaging procedures across the country.”

Hiroshi Ueda, Executive Vise President, Sumitomo Chemical, said: “We are proud of our 50-year relationship with NMP and our partnership with GE HealthCare to ensure patients in Japan could benefit from access to molecular imaging. At a time of exciting developments in the industry, following its discussions with Sumitomo Chemical, we believe GE HealthCare is the best owner to enable NMP to continue its successful growth journey. I would like to recognize NMP’s leadership and talented team for their significant achievements to date and their commitment to patients.”

As a leading global medical technology and pharmaceutical diagnostics innovator, GE HealthCare provides both molecular imaging equipment and proprietary radiotracers used across major patient care areas. The recent U.S. FDA approval of GE HealthCare’s first-of-its-kind PET radiopharmaceutical, Flyrcado™ (flurpiridaz F 18 injection), its in-licensing of Phase II FAPI assets and broadening theranostics offerings are all examples of the company’s commitment to novel diagnostics that are shaping the future of molecular imaging to drive improved patient outcomes. GE HealthCare’s PDx segment is a global leader in imaging agents used to support over 120 million patient procedures per year globally, equivalent to four patient procedures every second.

The Company expects this transaction to be neutral to Adjusted EPS^3,4 in year one and accretive thereafter.

GE HealthCare was advised by Solomon Partners Securities, LLC.

Forward-Looking Statements

This release contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as “will,” “expect,” “may,” “would,” “could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “potential,” “position,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. These forward-looking statements may include, but are not limited to, statements about the transaction, the completion and expected results of the transaction, and GE HealthCare Technologies Inc.’s (the “Company’s”) performance, growth opportunities, and strategy. These forward-looking statements involve risks and uncertainties, many of which are beyond the control of the Company. Factors that could cause the Company’s actual results to differ materially from those described in its forward-looking statements include, but are not limited to, the conditions to the completion of the transaction may not be satisfied; closing of the transaction may not occur or may be delayed; the Company may be unable to achieve the anticipated benefits of the transaction; operating costs and business disruptions (including, without limitation, difficulties in maintaining relationships with employees, customers, and suppliers) may be greater than expected; the Company may assume unexpected risks and liabilities; and completing the transaction may distract the Company’s management from other important matters. Other factors that may cause such a difference also include those discussed in the "Risk Factors" section of the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission and any updates or amendments it makes in future filings. There may be other factors not presently known to the Company or which it currently considers to be immaterial that could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. The Company does not undertake any obligation to update or revise its forward-looking statements except as required by applicable law or regulation.

About GE HealthCare Technologies Inc.

GE HealthCare is a leading global medical technology, pharmaceutical diagnostics, and digital solutions innovator, dedicated to providing integrated solutions, services, and data analytics to make hospitals more efficient, clinicians more effective, therapies more precise, and patients healthier and happier. Serving patients and providers for more than 125 years, GE HealthCare is advancing personalized, connected, and compassionate care, while simplifying the patient’s journey across the care pathway. Together our Imaging, Advanced Visualization Solutions, Patient Care Solutions, and Pharmaceutical Diagnostics businesses help improve patient care from diagnosis, to therapy, to monitoring. We are a $19.6 billion business with approximately 51,000 colleagues working to create a world where healthcare has no limits.

Follow us on LinkedIn, X, Facebook, Instagram, and Insights for the latest news, or visit our website https://www.gehealthcare.com for more information.

¹ https://www.trade.gov/country-commercial-guides/japan-pharmaceuticals, accessed on October 29, 2024
² https://nucleus.iaea.org/sites/accelerators/Pages/Cyclotron.aspx, accessed on October 29, 2024
³ See our latest earnings release dated October 30, 2024 for the definition of Adjusted EPS.
⁴ Non-GAAP financial measure

View source version on businesswire.com: https://www.businesswire.com/news/home/20241201060498/en/

GE HealthCare Media Contact:

David Morris

M +44 7920 591370

david.j.morris@gehealthcare.com

Mathilde Bouscaillou

M +33 647 008271

mathilde.bouscaillou@gehealthcare.com

Source: GE HealthCare

FAQ

What is the value of NMP's revenue that GEHC is acquiring?

NMP generated revenues of 28.2B JPY (approximately $183M) in 2023.

When is GEHC's acquisition of NMP expected to close?

The acquisition is expected to close in early 2025, subject to regulatory approvals.

How many manufacturing facilities does NMP operate that GEHC will acquire?

NMP operates 13 manufacturing facilities that will come under GEHC's full ownership after the acquisition.

What is the financial impact of the NMP acquisition on GEHC's earnings?

The transaction is expected to be neutral to Adjusted EPS in year one and accretive thereafter.