Siemens Healthineers and Kromek Group forge CZT technology agreement

U.K. – Siemens Healthineers has entered a pivotal licensing agreement with UK-based radiation detection specialist Kromek Group Plc to advance its in-house production of cadmium zinc telluride (CZT) material.

This material is essential for gamma ray detectors used in single-photon emission computed tomography (SPECT) systems.

Under the deal, Siemens Healthineers will license Kromek’s cutting-edge CZT production technology, enhancing its research, development, and manufacturing capabilities to support potential future innovations in gamma ray detectors for multi-modal SPECT systems.

Jim Williams, head of the Molecular Imaging business at Siemens Healthineers, highlighted the importance of the agreement, stating, “Bringing this production technology in-house is a key step to optimizing the process and material for our own applications.”

This initiative will complement the company’s ongoing advancements in sodium iodide (NaI)-based SPECT systems, which continue to be highly valued for their versatility and ability to support diverse nuclear medicine applications, including theranostics.

CZT technology stands out for its ability to detect gamma radiation at room temperature without converting it to optical light, offering superior energy resolution.

This unique feature can enable advanced detector and system designs, making it a critical component in next-generation medical imaging systems.

As part of the agreement, Siemens Healthineers will receive 15 of Kromek’s 174 CZT production furnaces, along with related know-how and production services.

Despite this transfer, Kromek retains 159 furnaces, maintaining its position as the largest independent CZT producer in the market.

The deal, valued at £30.2 million (US $37.5 million), includes an initial US $25 million instalment to be paid this year, providing a significant financial boost to Kromek.

Dr. Arnab Basu, CEO of Kromek, emphasized the transformative impact of the partnership, noting, “These significant agreements enable us to deliver profitability in FY 2025, significantly ahead of market expectations, and lay the groundwork for further growth in revenues and sustainable profitability beyond that period.”

He added that the initial payment will help Kromek achieve key milestones under the agreement, reduce its debt, and strengthen its operational capabilities.

The partnership announcement coincided with Kromek’s half-year financial results. For the six months ending October 31, 2024, the company reported revenues of £3.7 million (US $4.6 million), down from £7.1 million (US $8.9 million) the previous year.

Despite the decline, gross margins improved to 56.9%, up from 54.2%. Kromek reported a pre-tax loss of £5.7 million (US $ 7.1 million), an increase from £3.5 million (US $4.4 million) the prior year, while cash reserves stood at £0.6 million (US $0.75 million) with total borrowings at £11.8 million (US $14.7 million).

Looking ahead, Dr. Basu expressed optimism about the company’s future, anticipating growth in revenues for the fifth consecutive year in FY 2026.

He also emphasized Kromek’s continued profitability through collaborations with Siemens Healthineers, other original equipment manufacturers (OEMs), and contracts with government agencies for chemical, biological, radiological, and nuclear (CBRN) detection technologies in the UK and abroad.