CEO: Frans van Houten
2016 sales: $13.1 billion**
2015 sales: $12.7 billion
* Fiscal year ended Dec. 31, 2016
Philips started out making light bulbs in the 1800s. But 2016 saw the Dutch company refocusing away from its origins and directing its energies on healthcare. The company announced this transformation in 2014, saying it would offload its lighting businesses to “beef up” its healthcare and consumer electronics units, which it united under the HealthTech umbrella.
In 2016, it spun off Philips Lighting, which began trading in May after its failed attempt to unload its Lumileds lighting business to China’s GO Scale Capital in January. The deal fell through thanks to pressure from U.S. regulators, but Philips eventually sold off Lumileds to Apollo Global Management in December.
It’s unsurprising, then, that Philips is embracing the rapid changes in the industry, striking deals and launching innovative products in areas such as digital health, remote patient monitoring and analytics for medical imaging.
In the summer of 2016, the company acquired a pair of companies to grow into this vision: the digital pathology startup PathXL and Wellcentive, a company that makes population health management software.
PathXL’s digital pathology workflow software complements Philips’ IntelliSite Pathology Solution, an automated system aimed at helping pathologists analyze large datasets and improve diagnosis. Philips submitted positive data for the IntelliSite platform to the FDA in October and snagged clearance in April this year. It is the first digital pathology platform to be cleared for primary diagnostic use in the U.S.
In October, the FDA cleared Philips’ cardiac transducer for use with Lumify, its portable diagnostic device. Lumify, which comprises an app and two transducers for an Android smartphone, can now conduct cardiac imaging and perform ultrasound scans of the abdomen. The portable system allows emergency room staff to quickly triage patients without needing to locate an ultrasound cart.
The company made a number of moves in the connected health and remote monitoring space. It partnered with Validic to integrate consumer-generated data from health apps and remote monitoring devices into the cloud-based Philips HealthSuite, which pulls in data from a range of devices. There, this data can be analyzed alongside a patient’s electronic medical record and other clinical data.
It also integrated HealthSuite with Qualcomm Life’s 2net platform, adding even more connected medical devices to its repertoire, including drug dispensers, blood pressure monitors and ventilators.
Shortly after announcing its refocus in 2014, Philips picked up Volcano and its catheter-based imaging stable for $1.2 billion. Now integrated, Volcano delivered “strong performance” in fiscal 2016, boosting Philips’ Image Guided Therapy unit. HealthTech’s performance in 2016 is a testament that the refocus is paying off, van Houten said.
As it continues through 2017, Philips shows no sign of slowing down. June was a busy month, as the company launched its IntelliVue X3 patient monitoring system in Europe and inked a deal to buy Spectranetics—which makes devices that help cardiac surgeons retrieve leads while treating conditions such as peripheral artery disease—for $2.2 billion.
That same month, the company said it would acquire Electrical Geodesics for its brain-monitoring electroencephalogram (EEG) hardware and software and also announced a pair of precision medicine deals. One will see the company working with Memorial Sloan Kettering Cancer Center to develop new precision diagnostics for pancreatic cancer. The second is a collaboration with Illumina and Navican which aims to expand access to precision medicine.
** Philips’ 2016 medtech revenues of $13.1 billion come from the following:
- Diagnosis & Treatment sales ($7.4 billion)
- Connected Care & Health Informatics sales ($3.5 billion)
- HealthTech Other sales ($529 million)
- Sleep & Respiratory Care revenue from the Personal Health division ($1.6 billion, where the sales are based on the estimated percentage split of the Personal Health division by equity analysts)
Editor's note: this piece was updated to reflect that Philips has earned FDA clearance for the IntelliSite platform.