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Philips seeks role as comprehensive cath lab provider

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Philips Medical Systems was the undisputed global provider of cardiac cath imaging systems in 2005, a crown the company has worn for more than a few years. But being king of cardiovascular imaging is no longer enough.

Philips Medical Systems was the undisputed global provider of cardiac cath imaging systems in 2005, a crown the company has worn for more than a few years. But being king of cardiovascular imaging is no longer enough.

The company has hatched a strategy for its cardiovascular x-ray business to go beyond imaging. It is in the process of taking the first step in the proposed acquisition of a leading provider of hemodynamic monitors.

"We want to grow from an excellent cath lab provider to an integrated cath lab solutions provider," said Bert van Meurs, Philips senior vice president and business unit manager for cardiovascular x-ray. "To do so, we need to get ownership in the other areas of the cath lab."

Van Meurs is the architect of Philips' bid for privately held Witt Biomedical of Melbourne, FL. Witt, which achieved revenues of $49 million in 2005 on 18% growth over the previous year, is to be integrated into Philips' cardiovascular x-ray business. If the deal, valued at about $165 million, passes U.S. antitrust review, the two firms could begin the process of merging in late April or early May, according to van Meurs.

The hemodynamic systems in Witt's portfolio record ECG patterns, blood pressure, and other vital signs associated with cath lab procedures. Witt also offers a PACS dedicated to cardiology and other clinical reporting systems that record and document cath lab procedures.

Last year, Witt was the largest independent supplier of hemodynamic monitoring and clinical reporting systems in the U.S., according to Philips. It was the second largest such supplier in the world.

Less complementary than the hemodynamic offerings are Witt's clinical reporting systems, particularly its cardiology PACS. Philips already offers Xcelera cardiology PACS, which accommodates images from echocardiography and nuclear medicine, as well as cardiac cath.

Complicating matters further, Philips last year acquired PACS provider Stentor. Over the last eight months, the Dutch company has integrated Stentor's iSite PACS service model, whereby customers typically sign a five-year fee-per-study contract rather than make a capital investment in PACS equipment.

No decisions have yet been made on which way Philips will go in cardiology PACS. This step will happen if and when the Witt Biomedical deal is sealed.

"At that time, we will see how we can get the best aspects of both PACS portfolios into our new portfolio," van Meurs said.

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