9. GE Healthcare

GE Healthcare logo
2016 saw GE Healthcare return to growth after a 3.6% decline the year before, making up 15% of GE’s 2016 revenues.

GE Healthcare
CEO: Kieran Murphy
Based: Little Chalfont, U.K.
2016 sales: $9.8 billion**
2015 sales: $9.5 billion
Change: 3%

*Fiscal year ended Dec. 31, 2016

2016 saw GE Healthcare return to growth after a 3.6% decline the year before. Healthcare made up 15% of GE’s 2016 revenues, coming in behind aviation (21%) and power (22%). Healthcare is split into three units: healthcare systems, which houses its diagnostic imaging and clinical systems businesses, healthcare digital, which includes software and cloud solutions, and life sciences, which handles drug discovery and imaging agents.

In December 2015, GE Healthcare announced a partnership with Arterys, under which it would integrate the latter’s deep learning technology into its ViosWorks cardiac MRI analysis system. And early in 2016, GE teed up to launch the device, which applies deep learning and cloud computing to quickly analyze cardiac MR images more quickly than a traditional MRI scanner.

In March, Omnyx, GE Healthcare’s joint venture with the University of Pittsburgh Medical Center, launched digital pathology software to help physicians diagnose cancer more quickly. Later on, GE and UPMC confirmed they would exit the JV, and in December, Omnyx was folded into GE Healthcare.

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The company chased innovation, partnering with diagnostics player Check-Cap in July to develop high-volume manufacturing for ingestible X-ray capsule and teaming up with Boston Children’s Hospital in November to develop a deep learning solution to help doctors interpret images of childrens’ brains. The Boston Children’s collaboration aims to create digital tools for the diagnosis and treatment of childhood diseases with an initial focus on brain disease.

In March, an analyst speculated that GE might sell its healthcare business after then-CEO Jeff Immelt refocused the company around heavy-duty machinery. Immelt stepped down in July this year, with Flannery replacing him. Kieran Murphy, who previously headed the Life Sciences unit, took the helm of GE Healthcare.

“The premise is that the diagnostics and life-sciences businesses have enough critical mass to stand as an independent entity and could arguably be declared as noncore to GE's portfolio migration,” said RBC Capital Markets analyst Deane Dray at the time. But Flannery brushed it off. And in May, he said the company had been looking inward rather than outward to boost growth.

"When we look at the basic position of the company, we like the portfolio," Flannery told Bloomberg at the time. "So my mandate right now is to get the earnings growth going again, and there's a lot to just better managing the portfolio we have, align it more with customers and outcomes, for a better margin rate."

In 2016, GE Healthcare had “great international strength,” Immelt said on the Q4 earnings call. Sales grew 20% in China, 6% in Europe and 16% in Latin America, Immelt said. The company expects continued growth in emerging markets and China.

In fall 2015, GE Healthcare bet big on emerging markets, pumping $300 million into a new business dubbed Sustainable Healthcare Solutions, which is dedicated to increasing access to healthcare and improving health outcomes in these markets.

A device that would be particularly useful in resource-poor areas is GE’s Vscan hand-held ultrasound. In March, the company kicked off an initiative to train 1,300 midwives and prenatal healthcare providers to use the device. The Vscan is used in countries like the U.K. for supplemental ultrasound monitoring. It could, however, be the only source of such imaging for women in Nigeria.

Through Sustainable Healthcare Solutions, GE Healthcare works with governments, healthcare providers, payers and nongovernmental organizations. The subsidiary posts an annual growth of 20%, according to GE’s 2016 annual report.

** GE’s healthcare business consists of a number of revenue lines, which do not relate to end-user sales of medtech products and therefore don’t fall under Evaluate’s “total medtech sales” classification, explaining why its total medtech figure doesn’t match GE’s reported healthcare revenues. GE has periodically given a breakdown of the segments in their Healthcare business, which Evaluate has added into its model and applied the percentage split going forward.

9. GE Healthcare