Last year, German blue chip giant Siemens AG (NYSE: SI; XETRA: SIE), which has an annual turnover of $117 billion, was split up into three divisions - energy, industry, and healthcare. The healthcare division is to be assigned a far more central role that it had previously, as a growth engine and as a key line of business for Siemens, even though it entered it indirectly, through its imaging activity, which also includes magnetic resonance imaging devices (MRI).
"We want to cover the entire spectrum of diagnosis," says Walter Marzendorfer, CEO of Siemens' MRI business unit in an exclusive interview with "Globes", "from diagnosis for preventative medicine to diagnosis of disease, and diagnosis as part of the treatment of disease."
Marzendorfer recently visited Israel and met companies that could be of interest to the German giant as potential acquisitions or partners.
"We're interested in creating good relationships in the MRI field with academic authorities in Israel such as the Weizmann Institute or the Hadassah Medical Center, and also the Israeli companies in this field," he explains. "We did have a good relationship with Elscint in computer-based imaging systems. We jointly developed a product, which each company marketed under its own brand. In 2004, we acquired CADVision, which also focused on imaging system software."
Since Siemens is now building up the division, and adding more fields and capabilities, it is very receptive to the option of making acquisitions, including in Israel. "We've expanded our activity in computing products for the healthcare sector," says Marzendofer, "such as, for instance, software for image processing and analysis, and we have expanded our activity in biological diagnosis, meaning laboratory testing. We believe that these fields will be inseparable from one another in the future."
Globes: What items do you currently lack in your product line?
Marzendorfer:"We would be glad of software for surgical device navigation, a field in which Israel is strong. (among the companies specializing in this field are MediGuide Ltd., and SuperDimension Ltd., G.W.). "Another field of interest to us is surgical products that can work in a magnetic environment - like catheters and blades that are not affected by a magnet, but which still show up clearly in imaging. We would also like to move forward another field - the combination of MRI and Positive Emission Tomography (PET) imaging. MRI provides an excellent image of the brain's anatomy, while PET provides information on brain activity, on especially high resolution of up to an activity level of one molecule. It is believed that that a combination of these two technologies can be used to mark certain types of cell, for the purpose of diagnosing diseases such as, for example, Alzheimer's or Parkinson's disease, long before they begin to present clinical and anatomic symptoms. One can then focus medication on those cells."
Siemens stresses its focus on innovation. In 2007, the company spent $2.4 billion on innovation, registering 800 patents. "If you look at the list of the world's most innovative companies, we're in the top ten. This is what enables us to maintain our leadership," says Marzendorfer.
A substantial part of this innovation is happening in MRI, Marzendorfer's field of expertise. So what actually is new in this field? Aside from the giant anatomical mapping devices we're familiar with, MRI is being expanded to a host of additional areas, and the anatomical mapping devices available today are of a far higher quality and cheaper in price that at any time in the past.
"One of the most exciting areas in this field is MRI-guided surgery," says Marzendorfer. "So, for instance, if you want to remove a tiny metastasis from the liver without harming the organ, you can remove it with a MRI-guided needle. It is a very non-invasive procedure that can be performed more than one once without causing irreparable damage to the liver. This enables us to improve the length and quality of life for patients with a disease currently considered pretty hopeless."
MRI-guided neurosurgery is also a fast-growing area. MRI can now be also used to map out a three-dimensional structure of the brain and, to a certain degree, also the various activity areas - when one area in the brain is being used, the magnetic current in it is slightly different. This offers a tremendous advantage in research - but also in surgery.
"At present, the surgeon does not look at the brain directly, but through a microscope," says Marzendorfer. "You can carry out an MRI scan of the brain, including its various activity areas ahead of time, and superimpose that image on the microscopic one. That way, the surgeon has both three-dimensional information and information on the activity areas that guide him when he performs the surgery."
Classic MRI devices are also being made more innovative in various ways such as, for instance, increasing their accuracy by adding force to the magnetic field. "We have moved within a few years from devices with a force of 1.5 Teslas (a standard unit for the measurement of magnetic fields) to 3 Teslas in new devices, and research institutes already have devices with 7-9 Teslas," says Marzendorfer. "These devices enable us to see an organ in greater detail than if you were to remove it from the body and photograph it with a camera. These devices are currently very expensive - one million euro per Tesla."
In the past, Siemens toyed with the idea of developing a new generation of small, cheap MRI devices that would be placed in doctors' clinics and suited for specific limbs, such as the arm, knee or head. Marzendorfer claims the company has abandoned this option for the time being. "It turned out to be complicated. A device for imaging hands can also be used for the feet, but not for the shoulder or pelvis - so which device should an orthopedic surgeon have in his clinic? It turned out that producing these devices does not cost that much less than producing a device for the entire body. If so, we would be far better off working to bring down the costs of running a device for the entire body to a level that any clinic can afford."
As MRI becomes cheaper, it is increasingly being used in more esoteric fields beyond mere life-saving medicine - for example, in forensic laboratories. "You can carry out post-mortems without destroying the body, which is ideal for religious people, or in cases where investigators feel they need to study the body in more depth from the outside. You can also carry out simulations on a living subject in order to study internal trauma," says Marzendorfer. Another secondary field is sport, where a club can use MRI to study the state of the bones or cartilage of a player it is interested in signing.
Won't increased use of MRI raise fears about safety?
"In principle, MRI does not generate any ionized radiation and is therefore considered safe to use. The main safety issue where MRI is involved is the fact that it is a magnet. Accidents happen when a doctor enters the MRI room with a scalpel in his pocket and bends over the patient. People forget. There must be metal detectors at the entrance to every room with a MRI device."
Marzendorfer examined the situation in Israel and found the attitude of the local market worrying. "Israel is a country that offers appallingly little in the way of access to MRI devices," he says in a scalding done. "I was really surprised when I discovered how little there is. In countries in Europe the average is 25 devices for every million people, but in Israel there is just one device for the same size population. As a result, patients are referred for all sorts of diagnostic procedures and the MRI is left until last. They could save a lot of money, and spare patients radiation and bother if they made it one of the first tests on the list."
Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2008
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