Moscow, Russia and Amsterdam, Netherlands – Russian State Atomic Energy Corporation ROSATOM and Royal Philips Electronics (AEX: PHI, NYSE: PHG) have announced their intention to develop a nuclear medicine industry ecosystem in Russia. Nuclear medicine is an important medical imaging technique used to diagnose and stage cancer. With cancer becoming a primary cause of death, this partnership is an important step towards enabling better healthcare in Russia.

As part of the Memorandum of Understanding, ROSATOM and Philips intend to manufacture three important imaging modalities in nuclear medicine in Russia: SPECT (Single-Photon Emission Computed Tomography), SPECT/CT (SPECT combined with X-ray Computed Tomography) and PET/CT (Positron Emission Tomography combined with CT). This is the first time that an international manufacturer of nuclear medicine equipment has declared an intention to grant a local partner a license for SPECT/CT equipment production in Russia, reducing Russia’s dependency on other countries for the supply of this type of equipment. The companies intend to offer the Russian-made scanners to Russia and CIS markets under joint branding.

Another important area of cooperation will be in R&D (including clinical trials), the development of a local component manufacturing base and the future upgrade of joint products. Philips also intends to license its engineering know-how for the production and maintenance of medical devices to ROSATOM. Philips experts would also provide in-depth training to Russian engineers employed at R&D and production sites. ROSATOM intends to provide the partnership with infrastructure, production facilities and oversight of the production process. The final part of the intended collaboration is aimed at establishing the first Russian manufacturer and supplier of a complete PET center for local and global markets. ROSATOM’s healthcare activities will be organized in a dedicated healthcare part of the company.

“The main objective of our collaboration is to jointly create a comprehensive nuclear medicine industry ecosystem in Russia. It is intended to be a developing long-term cooperation. In line with the state program of the Russian government, we intend to reach a 50% localization target for this medical equipment in Russia.” said Mikhail Batkov, Director Radiation Technologies Program of the State Atomic Energy Corporation ROSATOM. “We believe that this partnership with Philips will catalyze growth in the local medical equipment industry, and we invite Russian companies to become our partners or suppliers. In the near future we hope to start diagnosing patients with Russian made equipment capable of competing with the best of its kind around the world.”

“We are convinced that partnerships between local and global companies are key enablers of improving local healthcare systems, offering more and better care to people,” said Steve Rusckowski, CEO of Philips Healthcare. “The early diagnosis of cancer is extremely important as cancer is now the number-two cause of mortality in Russia. Positron Emission Tomography is the most sensitive molecular imaging technique and has the potential to visualize cancer in a very early stage, even before structural changes can be seen on CT and MRI images. Its use in Russia, enabled by the Philips-Rosatom partnership, will help to significantly reduce public funding for costly cancer treatment.”

The local production of nuclear medicine equipment will reduce Russia’s dependency on the import of healthcare solutions and devices. Currently, an estimated 81% of all Russia’s medical equipment is produced outside Russia. By offering affordable diagnostic solutions tailored to the local market, the partnership aims to help modernize medical facilities in Russian hospitals. For example, there are only seven PET centers in Russia (compared to 2000 PET centers in the USA) and all of them are located in Moscow or St. Petersburg, allowing a mere 1-5% of the Russian population to gain access to this type of diagnostics. According to independent experts, over 140 PET centers should be built in Russia in the near future.