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Siemens--Stealing GE's Thunder

Executive Summary

Siemens AG continues to assemble the pieces necessary to create a one-stop-shop for medical testing. With its $7 billion take-out of Dade Behring Holdings Inc., the German industrial giant ups the acquisition ante for in vitro diagnostic companies. Rival GE may have to play catch-up if it wants to maintain its leadership position in medical testing.

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The early biotech industry thrived on a combination of hope and hype while diagnostics, which evolved using many of the same tools, was traditionally viewed -- and priced -- almost as a commodity. Now we're seeing the advent of complex, high-value diagnostics. As the techniques underlying tests increase in their biological complexity and the knowledge base of their developers about specific disease areas deepens, is the value proposition becoming more biotech-like?

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