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Watson To Acquire Merge Healthcare For $1B

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IBM (NYSE: IBM) today
announced that Watson will gain the ability to "see" by bringing together
Watson's advanced image analytics and cognitive capabilities with data and
images obtained from Merge Healthcare Incorporated's (NASDAQ: MRGE) medical
imaging management platform. IBM plans to acquire Merge, a leading provider
of medical image handling and processing, interoperability and clinical
systems designed to advance healthcare quality and efficiency, in an effort
to unlock the value of medical images to help physicians make better patient
care decisions.
Merge's technology platforms are used at more than 7,500 U.S. healthcare
sites, as well as most of the world's leading clinical research institutes
and pharmaceutical firms to manage a growing body of medical images. The
vision is that these organizations could use the Watson Health Cloud to
surface new insights from a consolidated, patient-centric view of current
and historical images, electronic health records, data from wearable devices
and other related medical data, in a HIPAA-enabled environment.
Under terms of the transaction, Merge shareholders would receive $7.13 per
share in cash, for a total transaction value of $1 billion. The closing of
the transaction is subject to regulatory review, Merge shareholder approval,
and other customary closing conditions, and is anticipated to occur later
this year. It is IBM's third major health-related acquisition -- and the
largest -- since launching its Watson Health unit in April, following Phytel
(population health) and Explorys (cloud based healthcare intelligence).
"As a proven leader in delivering healthcare solutions for over 20 years,
Merge is a tremendous addition to the Watson Health platform. Healthcare
will be one of IBM's biggest growth areas over the next 10 years, which is
why we are making a major investment to drive industry transformation and
to facilitate a higher quality of care," said John Kelly, senior vice
president, IBM Research and Solutions Portfolio. "Watson's powerful
cognitive and analytic capabilities, coupled with those from Merge and our
other major strategic acquisitions, position IBM to partner with healthcare
providers, research institutions, biomedical companies, insurers and other
organizations committed to changing the very nature of health and healthcare
in the 21(st) century. Giving Watson 'eyes' on medical images unlocks
entirely new possibilities for the industry."
Teaching Watson to "See" Medical Images
The planned acquisition bolsters IBM's strategy to add rich image analytics
with deep learning to the Watson Health platform -- in effect, advancing
Watson beyond natural language and giving it the ability to "see." Medical
images are by far the largest and fastest-growing data source in the
healthcare industry and perhaps the world -- IBM researchers estimate that
they account for at least 90% of all medical data today -- but they also
present challenges that need to be addressed:
-- The volume of medical images can be overwhelming to even the most
sophisticated specialists -- radiologists in some hospital emergency
rooms are presented with as many as 100,000 images a day1.

-- Tools to help clinicians extract insights from medical images remain
very
limited, requiring most analysis to be done manually.

-- At a time when the most powerful insights come at the intersection of
diverse data sets (medical records, lab tests, genomics, etc.), medical
images remain largely disconnected from mainstream health information.
IBM plans to leverage the Watson Health Cloud to analyze and cross-reference
medical images against a deep trove of lab results, electronic health
records, genomic tests, clinical studies and other health-related data
sources, already representing 315 billion data points and 90 million unique
records. Merge's clients could compare new medical images with a patient's
image history as well as populations of similar patients to detect changes
and anomalies. Insights generated by Watson could then help healthcare
providers in fields including radiology, cardiology, orthopedics and
ophthalmology to pursue more personalized approaches to diagnosis, treatment
and monitoring of patients.
Cutting-edge image analytics projects underway in IBM Research's global labs
suggest additional areas where progress can be made. They include teaching
Watson to filter clinical and diagnostic imaging information to help
clinicians identify anomalies and form recommendations, which could help
reduce physician viewing loads and increase physician effectiveness.
"As Watson evolves, we are tackling more complex and meaningful problems by
constantly evaluating bigger and more challenging data sets," Kelly said.
"Medical images are some of the most complicated data sets imaginable, and
there is perhaps no more important area in which researchers can apply
machine learning and cognitive computing. That's the real promise of
cognitive computing and its artificial intelligence components -- helping to
make us healthier and to improve the quality of our lives."
Watson Health and Merge Capabilities
Will Benefit Researchers, Clinicians and Individuals
IBM's Watson Health unit plans to bring together Merge's product and
solution offerings with existing expertise in cognitive computing,
population health, and cloud-based healthcare intelligence offerings to:
-- Offer researchers insights to aid clinical trial design, monitoring and
evaluation;

-- Help clinicians to efficiently identify options for the diagnosis,
treatment and monitoring a broad array of health conditions such as
cancer, stroke and heart disease;

-- Enable providers and payers to integrate and optimize patient engagement

in alignment with meaningful use and value-based care guidelines; and

-- Support researchers and healthcare professionals as they advance the
emerging discipline of population health, which aims to optimize an
individual's care by identifying trends in large numbers of people with
similar health status.
"Merge is widely recognized for delivering market leading imaging workflow
and electronic data capture solutions," said Justin Dearborn, chief
executive officer, Merge. "Today's announcement is an exciting step forward
for our employees and clients. Becoming a part of IBM will allow us to
expand our global scale and deliver added value and insight to our clients
through Watson's advanced analytic and cognitive computing capabilities."
"Combining Merge's leading medical imaging solutions with the world-class
machine learning and analytics capabilities of IBM's Watson Health is the
future of healthcare technology," said Michael W. Ferro, Jr., Merge's
chairman. "Merge's leading technology and proven expertise represent a
unique combination of assets that will deliver unparalleled value to Watson
Health clients. Together, we will unlock unprecedented new opportunities to
improve patient diagnostics and deliver enhanced care."

Posted-In: News M&A Press Releases

 

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