Siemens Healthineers has agreed to acquire the diagnostic arm of Advanced Accelerator Applications from Novartis for over €200 million ($224 million), according to the Financial Times. The unit, which produces radioactive chemicals for cancer scans, is expected to help Siemens establish its US-based PET radiopharmaceuticals business in Europe. The transaction, confirmed by both companies, is set to close in the fourth quarter.Last year, it came to light that Novartis was in the early stages of exploring a sale of some diagnostic imaging assets from the unit. The Swiss drugmaker said it decided to sell the division's diagnostics arm after concluding that "the growth of the molecular imaging business would be best supported under the ownership of a dedicated diagnostics shareholder." Novartis purchased AAA for $3.9 billion in 2017 to expand its range of cancer-targeting medicines, including the French biotech's radiopharmaceutical Lutathera (177Lu-Dotatate) for neuroendocrine tumours.The unit, spun off from the Conseil Européen pour la Recherche Nucléaire (CERN), runs Europe’s second-largest network of cyclotrons, which manufacture radioactive compounds for detecting cancer, heart disease and neurological disorders through PET scans.Sources revealed that the deal will also have the companies collaborating to increase the supply of nuclear isotopes for radiopharma drugs. Analysts estimate that Lutathera, which was approved by the FDA in 2018 to treat gastroenteropancreatic neuroendocrine tumours in adults, will generate $704 million in sales this year. Novartis recently spent $1 billion to acquire radioligand therapy developer Mariana Oncology and expanded its partnership with PeptiDream in a deal worth $2.7 billion. For related analysis, see Spotlight On: Novartis continues to push radiotherapies into new frontiers.Space heats upA recent uptick in deals underscores growing enthusiasm for the radiopharmaceuticals sector, with AstraZeneca shelling out roughly $2 billion to acquire Fusion Pharmaceuticals in March and Bristol Myers Squibb entering the space with its $4.1-billion purchase of RayzeBio in December. Eli Lilly has also ventured into the field, acquiring POINT Biopharma for $1.4 billion and inking a $140-million deal with Radionetics Oncology that gives it an option to buy the company for $1 billion after an undefined exercise period.