Siemens splits off diagnostics business
Olyrian Diagnostics will replace Siemens Healthineers’ in vitro diagnostics division, with plans to operate independently by mid-2028. The newly branded entity will focus exclusively on lab and point-of-care diagnostic products.
Clients of Olyrian Diagnostics include Quest Diagnostics, which recently extended its contract by five years. Siemens Healthineers is also rebranding its remaining business, with plans to drop “Siemens” from its name and become Healthineers next year.
The company’s decision to carve out its diagnostics business comes after laying the groundwork over the past year. Executives revealed the planned carve-out in May, citing a lack of relationship with the company’s other units that would benefit both parties.
“We have started the carve-out with a clear intention to separate,” CEO Bernd Montag said on Siemens Healthineers’ earnings call. “This process will position diagnostics as a market-leading in vitro pure play and help diagnostics to leverage its strength across lab solutions and point-of-care testing.”
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Comparable revenue at the diagnostics business fell 4.2% in fourth-quarter results. Sales “stabilized sequentially while still declining” year over year, Montag said. Diagnostics sales in China continue to decline due to the structural market rebasing in the country, according to CFO Jochen Schmitz.
Siemens Healthineers is preparing to carve out its diagnostics business while working through the split from its parent company. They are targeting an additional 400 million euros in savings at the diagnostics unit, with a significant portion of the savings to be realized by 2028, Schmitz said.
The company is launching additional measures to counter over 300 million euros of stranded costs stemming from the diagnostics carve-out. The short-term disruption will position the company to focus capital allocation clearly in the mid- and long-term, Schmitz said.
As part of the separation, Healthineers will pay Siemens 300 million euros for the three-year brand transition phase. Shareholders will vote on the separation in February, marking a significant step in the company’s plan to spin off Healthineers.
