Siemens Healthineers has decided to carve out its in vitro diagnostics (IVD) business under the new name Olyrian Diagnostics as clinical laboratories face a new wave of investment decisions. Aging automation systems, changing testing networks, and growing pressure to demonstrate their value to healthcare organizations are reshaping how laboratories operate and what they expect from diagnostics manufacturers.

For Sharon Bracken, President of Diagnostics at Siemens Healthineers, the planned separation represents an opportunity to position the business more directly around those needs. “We started a journey of basically shaping a more autonomous diagnostics company about four years ago,” Bracken told Inside Precision Medicine. “It was really aligning the business model with our customers’ needs.”

Announced November 5, the carve-out is expected to be completed by mid-2028. Olyrian will remain part of Siemens Healthineers during the transition, with no immediate changes to customer contracts, products, services, or points of contact. Siemens Healthineers also plans to change its name to Healthineers.

The business entering this transition is substantial, manufacturing more than 16 billion diagnostic tests annually and spanning clinical chemistry, immunoassays, hematology, specialty testing, laboratory automation, and point-of-care (POC) diagnostics.

But it is also undergoing a financial turnaround. Diagnostics revenue declined 4.2% on a comparable basis in the fourth quarter of fiscal 2026, with an adjusted EBIT margin of 5.4%. Siemens Healthineers CFO Jochen Schmitz said during the company’s fourth-quarter earnings call that the Diagnostics business is targeting an additional €400 million in cost savings as part of its ongoing transformation, with the aim of achieving mid-teens operating margins over the medium term. The challenge for Olyrian will be to translate a more focused organizational structure into commercial growth while continuing to improve profitability.

A changing market for laboratory infrastructure

Bracken sees a significant opportunity in the changing requirements of large health systems and diagnostic laboratory networks.

Many customers, she explained, are approaching another major capital investment cycle as laboratory track systems installed in the early 2000s age. At the same time, testing models have evolved following the COVID-19 pandemic, while consolidation among laboratory providers and the expansion of hub-and-spoke networks have changed how diagnostic services are organized. “What we’re hearing from customers as they’re maturing is that they’re coming back around to their second major capital investment,” Bracken said. “The track systems are now aged.”

Rather than approaching Siemens Healthineers solely to purchase new instruments, she said, customers are increasingly seeking assistance with the design of new laboratories and the reconfiguration of existing testing networks. “Customers are coming to us now saying, ‘I have a greenfield lab I want to build,’ or ‘I need to totally reshape my testing.'”

That demand reflects a broader shift in how some healthcare organizations view their laboratories. Where diagnostic testing has traditionally been evaluated primarily as an operating expense, laboratory leaders are increasingly seeking to demonstrate contributions to clinical decision-making, operational efficiency, and institutional revenue. “Lab is no longer a cost center. It’s a value driver,” Bracken said, characterizing the perspective of major healthcare institutions.

Siemens Healthineers has already been promoting this view. In July, the company released survey findings on the growing strategic importance of laboratory services and showcased technologies intended to help laboratories address operational and workforce constraints. The company also offers consulting services that address laboratory financial performance, test utilization, operational efficiency, and hub-and-spoke network design.

For Olyrian, the opportunity is therefore not simply to replace aging equipment but to participate in broader decisions about where testing should take place, how laboratories should be connected, and how diagnostic services can support the financial and clinical priorities of healthcare systems.

From instrument supplier to laboratory partner

With Olyrian, core, specialty, and POC diagnostics will all be “under one roof.” Bracken believes the breadth of that diagnostics portfolio gives the company an advantage in helping healthcare systems plan and modernize their laboratory operations. That combination allows the company to address laboratory operations across multiple testing disciplines rather than approaching each instrument category independently.

Bracken described recent interactions with major healthcare institutions planning new laboratory facilities, as well as an exchange in which public health system representatives from Spain visited one of Siemens Healthineers’ large private laboratory customers to examine its operations.

Such interactions, she suggested, are becoming more common as laboratory operators look beyond individual technologies toward the organization of entire testing networks. “We sit at the table with that, which is something that I had not experienced in more fragmented companies in the past,” she said. The standalone structure is intended to strengthen that approach by allowing Olyrian’s commercial organizations to concentrate more directly on diagnostic customers.

Bracken noted that Siemens Healthineers has historically maintained relationships with healthcare executives at the system level. While those relationships have benefited the diagnostics business, she expects a more focused organization to deepen engagement with laboratory operators and diagnostic service providers. “It will be more focused, less diluted, and truly diagnostic,” she said.

She sees that specialization as an opportunity to accelerate revenue growth, although the separation has yet to demonstrate its commercial benefits.

Four years of restructuring

The Olyrian carve-out builds on operational changes that began approximately four years ago. One early step involved reorganizing service operations that had previously been integrated across Siemens Healthineers. According to Bracken, supporting medical imaging equipment and diagnostic laboratory systems requires different service models.

The company also reorganized its diagnostics portfolio into more focused business areas. High-volume clinical chemistry, immunoassay testing, and automation were concentrated within the core laboratory business, enabling greater attention to the Atellica portfolio. Specialty diagnostics maintained distinct priorities across hematology, hemostasis, plasma proteins, and allergy testing, while POC development emphasized connected platforms and blood gas testing.

The Atellica Forte Series represents part of the company’s next generation of laboratory technology, bringing together planned advances in automation, informatics, and workflow integration. The platform remains under development and is not commercially available.

Bracken said the reorganization allowed the company to maintain its R&D investment profile while tailoring development priorities to individual diagnostic markets.

The separation does not signal a change in its clinical research priorities, she emphasized. The business will continue pursuing diagnostic applications in neurodegenerative diseases, metabolic syndrome, oncology, and cardiovascular disease. “Nothing is changing in this announcement in what we’re doing in terms of those areas of focus,” she said.

The restructuring has also involved difficult portfolio decisions, including the discontinuation of legacy diagnostic platforms. Bracken pointed to the scale of those transitions, alongside the recovery from COVID-related disruptions and challenges in China, as part of the groundwork for the company’s next phase.

The financial pressures have not disappeared. Weakness in China, where healthcare reforms have affected the diagnostics business, remains an important challenge, and the carve-out itself is expected to generate near-term separation costs.

Fixed footprint while focusing on financials

Despite the organizational changes, Bracken does not anticipate major changes to the company’s physical footprint. Olyrian will remain predominantly U.S.-centered, with significant reagent operations in Tarrytown, New York; Walpole, Massachusetts; and Glasgow, Delaware, alongside instrument operations elsewhere, including Marburg, Germany.

The question now is whether a more autonomous diagnostics business can capitalize on the laboratory modernization opportunities Bracken describes while navigating the financial and operational challenges inherited from Siemens Healthineers.

For Bracken, the opportunity lies in combining the engineering and automation expertise developed within Siemens Healthineers with the assay development capabilities that have long been central to the diagnostics business. “The business model being focused on diagnostics is going to be a big opportunity for us to unleash top-line growth,” she said.

Whether that growth materializes will depend not simply on the new organizational structure but on Olyrian’s ability to help laboratories solve increasingly complex operational and clinical challenges.