MD Buyline Anticipates Three Possible Outcomes from J&J’s Sale of Ortho Clinical Diagnostics

Whoever acquires OCD looks to gain a major piece of the growing blood bank automation market.

DALLAS, TX — November 8, 2013 — The most recent announcement from J&J indicating they are in talks with both investment firms and healthcare companies to sell their chemistry immunoassay/blood bank automation division, Ortho Clinical Diagnostics (OCD), suggests some big changes on the horizon for the laboratory market. Currently, OCD is one of only three major vendors, along with Immucor and Biorad, which offer blood bank automation within the U.S. This indicates whoever acquires OCD looks to gain a major piece of the growing blood bank automation market.

MD Buyline anticipates three possible outcomes from this sale:

  1. One of the three “mega vendors” such as Roche, Siemens, or Beckman Coulter (Danaher) acquires OCD to round out their laboratory portfolio.
  2. GE or Philips acquires OCD in an effort to get a foothold on the laboratory market.
  3. OCD is purchased by an investment firm.

ROCHE, SIEMENTS, OR BECKMAN COULTER ACQUIRES OCD

Over the last few years MD Buyline has seen the hospital laboratory vendor market move away from what was once a diverse group of several different companies towards a new scene dominated by Roche, Siemens and Beckman Coulter. These companies have slowly been rounding out their laboratory portfolio, expanding beyond clinical chemistry into molecular diagnostics and other laboratory segments, through the acquisition of smaller companies. Roche, Siemens and Beckman Coulter all have comparable laboratory service lines, but they each lack blood bank automation. If one of these major vendors were to acquire OCD, this would allow them to offer a full line of laboratory solutions and give them a significant advantage over the other two vendors.

GE OR PHILIPS ACQUIRES OCD

Given GE and Philips’ recent entry into the laboratory market with digital pathology, it is possible that they are looking to follow in the footsteps of Siemens. While neither company has FDA approval for their digital pathology solutions for primary screening, GE already offers some laboratory solutions through their Life Sciences division. GE previously tried to acquire Abbott’s diagnostic unit in January 2007, but by July of that year, the $8 billion deal had fallen apart due to disagreements over the final terms. Philips was also rumored to be interested in purchasing a molecular diagnostics company but nothing materialized from this. Given their interest in the past and their digital pathology offerings, it is possible GE and Philips might see OCD as an excellent opportunity to gain entry into the hospital laboratory market. It would provide them with two laboratory segments, chemistry immunoassay and blood bank automation, for the price of one. Should either company purchase OCD, they are also likely to begin acquiring other smaller companies that would help them compete with Roche, Siemens and Beckman Coulter.

OCD IS PURCHASED BY AN INVESTMENT FIRM

The third and most likely option is that OCD will be purchased by an investment firm who will help grow their business before reselling the company, likely to one of the big three vendors or another interested party.

About MD Buyline

MD Buyline, the leading provider of healthcare technology and clinical research for reducing the purchasing costs across the healthcare supply chain, provides more than 3,300 hospitals with unbiased, up-to-the-minute data on vendors, products, services, and user satisfaction ratings to ensure they invest in the right technology and services at the right price. For more information, please visit www.mdbuyline.com and follow MD Buyline on Twitter, @MDBuyline.