The spinoff, along with the Siemens Healthineers IPO and subsequent Varian acquisition, has been part of a long-term strategy for the firm to establish a leadership position in precision medicine. Diagnostics and therapy treatment both involve the use of medical imaging and laboratory tests to enable decisions. Now, with a complete imaging portfolio and burgeoning IVD business, the new Siemens-Varian company will be able to start combining and analyzing these results, allowing for the development of truly individualized treatment plans, care pathways and AI-enabled clinical decision support tools.

In addition, oncology care contains some of the most complex workflows present in healthcare today, with the discipline moving heavily toward multidisciplinary collaboration. As this practice develops, we expect provider focus to intensify on fixing issues within software interoperability. How Siemens and Varian approach this challenge will be key to long-term success; Siemens has traditionally been slower to move its digital capabilities toward a more consolidated and open-source platform, notably only recently announcing a roadmap to connect its imaging IT solutions together via the syngo Carbon platform. Initially this preponderance will have limited impact, such is the relatively best-of-breed approach to Oncology IT in most markets today. However, if Siemens is to realize its precision medicine aims, integration and interoperability for its broader digital portfolio will be critical to success.

Homing in on emerging markets
Integration across workflows also leads the way toward clinical pathways and tumor board development, and the company would be very well positioned to integrate information from across products. Competitors in this space are currently immature and often struggle to provide the use-case for their technology. The key challenge in this market therefore, would be replacing existing teleconferencing platforms like Microsoft and Zoom, which have no specialist capabilities but seem to have been adopted widely throughout last year as a COVID-19 solution to continuation of services. These platforms, however, do not offer benefits to workflow, nor do they facilitate access to a wide range data required for oncology care. Siemens-Varian would therefore be much better positioned to integrate and curate this information easily for providers, compared to startup vendors.

However, we do not think this focus on end-to-end oncology management signals a wider move in the market toward “closed” proprietary software provision. Providers themselves see the benefit in interoperability and vendor neutrality, and are increasingly frustrated by complex integrations. Oncology sits at the convergence of many major departmental and enterprise IT systems, and historically has seen a healthy demand for neutral best-of-breed solutions, such as those provided by vendors like RaySearch Laboratories. RaySearch Laboratories itself has begun some progress in larger academic and cancer centers, through focusing on the provision of AI-enabled software to improve provision across a range of parameters. Navigating this balance between best-of-breed capability and singular platform interoperability and customer retention will be a challenging tightrope to navigate for the firm in oncology, let alone across broader acute provider diagnostics. However, expertise and a strong position in many of the core product segments should provide the firm with an advantage in terms of navigating core customer transition from stand-alone point solutions toward broader integrated platforms.

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