GE HealthCare (GEHC.US) plans to acquire Sofie for $1 billion, pointing to the high growth track for radiopharmaceuticals

The Zhitong Finance App learned that, according to people familiar with the matter, GE HealthCare Technologies (GEHC.US) is in in-depth negotiations to acquire Sofie Biosciences for about 1 billion US dollars. This move will expand its layout in the field of radiological diagnostic drugs used in medical scans.

The two companies may announce the deal as early as this week, but negotiations may still change or break down.

Sofie develops radiopharmaceuticals and operates a production network to produce short-lived radioactive materials used in positron emission tomography (PET). Its R&D pipeline includes diagnostic drugs designed to detect certain gastroesophageal and pancreatic cancers.

The acquisition of Sofie will enhance GE HealthCare's pharmaceutical diagnostics business—a business that provides substances for patients to use prior to imaging tests. It will also give the company a stronger position in a rapidly growing field that combines specialty medicines with scanning equipment already sold by GE HealthCare.

By simultaneously selling imaging equipment and supporting diagnostic drugs, the acquisition helps GE HealthCare generate more revenue from every medical scan. Compared to large scanners, radiopharmaceuticals may also generate more recurring revenue because hospitals buy larger scanners less frequently.

For investors, the main question is whether the price paid by GE HealthCare is reasonable and how quickly Sofie can turn its R&D pipeline into commercially meaningful sales.

If completed, this acquisition would be GE HealthCare's second major acquisition since the split from GE in January 2023. Since the first day of listing, its stock price has risen by about 12%, far behind the strong performance of former GE brothers GE Vernova (GEV.US) and GE Aerospace (GE.US).

GE HealthCare is always looking for ways to improve growth and focus on its core business. In July of this year, the company began evaluating strategic options for its Patient Care Solutions division. Trian Fund Management, an activist investor that helped drive GE's split, has also increased its stake in GE Healthcare to nearly $200 million.

Sofie is still mostly owned by its founder and executives. Trilantic acquired 25.8% of the company's shares in 2024, when the deal valued the company at a maximum of $550 million. Selling for close to $1 billion would be a significant increase over that valuation, which would also put pressure on GE HealthCare to achieve strong growth from this business.