Five Digital Health Companies Acquired by Pharma Giants in 2014: Innovations Driving Strategic Expansion

2014 was a record-breaking year for internet healthcare, with the total transaction volume exceeding $4 billion—more than double that of 2013 and equivalent to the sum of the previous three years. This clearly indicates a surge of hot money in the market and a pronounced industry trend. Although it is still too early to draw definitive conclusions about the overall situation in 2015, first-quarter statistics have already been released, showing that venture capital investment in the internet healthcare sector exceeded $630 million.

In the first quarter of 2015, the top six investment projects in the internet healthcare sector accounted for 61% of the total investment amount, i.e., $373 million. Listed in descending order by investment amount, these sectors were: big data analytics, healthcare consumer services, EHR and diagnostic workflows, digital diagnostics, population health management, and internet-connected medical devices.



A Review of Investment Trends in the Internet-Based Mobile Healthcare Sector in 2014In 2014, a total of 258 companies in the internet-based mobile healthcare sector attracted investor interest and secured financing. There were 295 investment transactions, with an average funding amount of $14.1 million per deal. In the same sector, there were 95 mergers and acquisitions (M&A) deals, totaling $20 billion. Major healthcare corporations remained active acquisition powerhouses, while medical device manufacturers, payers, and technology companies also demonstrated strong performance. Clearly, these industry players recognize the significant implications of comprehensively expanding into health technology, which is reshaping the industry’s business models and competitive landscape. Among the 258 M&A transactions, five internet healthcare companies were acquired by pharmaceutical giants. VCBeat has compiled an overview of the business scopes of these five internet healthcare companies and explains why top-tier pharmaceutical companies targeted them and what their strategic intentions were.



I. BD Acquires CareFusion
BD is a global leader in medical technology, primarily engaged in the production and sales of medical devices, systems, and biological reagents. The company’s operations are divided into three major segments: BD Medical, BD Diagnostics, and BD Biosciences. With strong research and development capabilities, BD focuses on improving medication delivery, enhancing the quality and speed of infectious disease diagnostics, and advancing the research and discovery of new drugs and vaccines. Its customers include healthcare institutions, life science research institutes, clinical laboratories, industrial entities, and the general public.

On March 17, 2015, BD announced that it had completed the acquisition of CareFusion in accordance with the merger agreement disclosed on October 5 of the previous year, at a price of $58 per share, for a total transaction value of $12.2 billion. BD’s leadership publicly stated that this represents the most significant milestone in the company’s history to date. This acquisition has substantially enhanced the breadth and depth of BD’s portfolio in medication management and patient safety solutions. Moving forward, BD is committed to becoming a global leader in medical technology and a preferred partner for healthcare providers worldwide.

CareFusion is a global company serving the healthcare industry, providing products and solutions specifically designed to help hospitals enhance medical safety and quality. The company develops advanced technologies across multiple product lines, including infusion pumps, connectors and accessories, automated medication dispensing systems, patient identification systems, airflow management equipment, data mining and surveillance systems, respiratory care devices, surgical instruments, and interventional therapy products.

Furthermore, CareFusion integrates electronic health records to produce fully automated equipment, such as computerized physician order entry (CPOE), barcode medication administration systems, and clinical information technology. In addition to its products, CareFusion offers solutions in enterprise informatics and analytics, infection prevention, medication management, operating room efficiency, and respiratory health.

The merger will create a complementary product portfolio, integrating pharmaceutical management solutions with smart device manufacturing. This encompasses medication preparation, hospital ward allocation, patient management, and intelligent monitoring. The ultimate goals are to enhance the quality of patient care, reduce healthcare costs, offer diversified medication options and services, minimize medication management errors, improve safety and efficiency, maximize the containment of infection spread, and facilitate more efficient emergency medical response.

CareFusion’s Chairman Believes That the Merger and Acquisition Has Made CareFusion Part of a World-Leading Medical Technology Company, Poised to Market Its Products and Services in the Global Marketplace.



II. AstraZeneca Acquires Definiens
AstraZeneca is a global innovative biopharmaceutical company. Headquartered in London, UK, with its R&D headquarters in Sweden, the company is engaged in the research and development, manufacturing, and sales of pharmaceutical products and healthcare services. Leveraging its unique strengths in small molecules and biologics, immunotherapy, and protein engineering, AstraZeneca has built a distinctive portfolio to harness its R&D capabilities and potential in these areas, focusing on three core therapeutic areas: oncology, cardiovascular and metabolic diseases, and respiratory, inflammatory, immune, and autoimmune diseases. The company also actively focuses on anti-infectives and neuroscience, investing in relevant collaborations and opportunities.

In addition, the company plans to double its Phase III clinical pipeline by 2016, aiming to achieve its biologics portfolio objectives.
Steadily advance the launch of a series of specialty drug products to balance the company’s historical strengths in the generic drug sector. The company also engages in cross-regional team collaboration, gaining close access to world-leading hubs of biological science research, and igniting its R&D engine with innovation and scientific excellence.

On November 4, 2014, AstraZeneca announced that its global biopharmaceutical research and development company, MedImmune, had acquired Definiens, with MedImmune obtaining 100% of Definiens’ shares. The acquisition was valued at $150 million.

Definiens, a German company ranked number one globally in image processing software, is a leader in life sciences, tissue diagnostics, and quantitative digital pathology analysis, as well as in image analysis, data mining products, and solutions. Definiens’ technology employs automated analysis workflows, truly freeing technicians from the burden of image interpretation. It provides products and services to world-class pharmaceutical companies, biotechnology firms, and research institutions, while accelerating new drug development and shortening the disease discovery cycle.

Definiens’ core products are the Definiens Tissue Phenomics® suite, comprising Definiens Tissue Studio®, Definiens Developer XD®, and Definiens Image Miner®.

The product is applied in tissue phenomics, which involves the structural information of tissue samples or organs, including cell size, shape, absorbed stains, and intercellular substances. These data can be utilized across multiple studies, such as tracking characteristic changes in cells during development, accurately quantifying the onset and progression of cancer, grading degenerative changes, assessing the impact of environmental factors on the body, or measuring the cellular effects of drugs on specific organs or tissues.



Tissue Studio software provides detailed analysis of histological slides to identify biomarkers. Based on staining variations within the slides, it accurately identifies target regions and distinguishes cell types and subtypes. With cellular-level resolution, it examines morphological features and biomarker expression patterns of individual cells or intercellular structures. Furthermore, it integrates these results with data from other sources for comprehensive analysis, generating novel insights that offer enhanced decision support for research, diagnosis, and treatment.

Definiens XD is a multidimensional image processing platform that includes 2D image analysis, 2D-time analysis, 3D analysis, and 3D-time analysis. Using this platform, users can develop applications tailored to their specific needs. Definiens XD enables researchers and clinicians to identify and quantitatively analyze regions of interest through precise image classification and measurement.

Definiens Image Miner tightly integrates image analysis with data mining, accelerating the research and development of biomarkers.

eCognition, a professional remote sensing software developed by Definiens, is the world’s first solution to emulate the human cognitive process of extracting information from images for intelligent analysis and information extraction. By organically integrating simulated human brain cognitive principles with the supercomputing power of computers, it achieves a combination of the speed of automated computer classification and the accuracy of manual interpretation. Its key features include enhanced intelligence, precision, and efficiency in measuring image information.

MedImmune has a comprehensive cancer immunotherapy program that identifies which treatment patients are most likely to respond to, and the merger between the two parties will enhance MedImmune’s research capabilities in discovering new biological markers. This is crucial for the development of new drugs. Definiens’ technology can improve existing cancer immunotherapy approaches, ultimately providing patients with the most suitable targeted therapies.



3. Millennium Labs Acquires RxAnte
Millennium Laboratories offers drug monitoring, including Urine Drug Testing (UDT) and Pharmacogenetic Testing (PGT), to assist medical professionals in treating conditions such as chronic pain, psychiatric disorders, and psychological disturbances. Millennium also provides personalized prescription medication management, designs treatment plans, and delivers patient-specific medical programs with outcome monitoring.



On January 13, 2014, Millennium Labs strategically acquired RxAnte for a total of $70 million. RxAnte is a healthcare predictive analytics and decision support company that enhances medication adherence across populations, serving health plans, pharmacy benefit managers, pharmacy chains, and healthcare providers.



Founded in 2011, RxAnte is an internet healthcare startup backed by venture capital firms. It provides recommendations to payers, healthcare providers, resident physicians, pharmacists, and other medical personnel, aiming to completely eliminate and avoid the excess costs and risks associated with uncertain medication efficacy and reduced adherence.

Through predictive analytics, RxAnte enhances medication utilization and treatment outcomes. The “RxAnte Platform,” for which a patent is pending, is an innovative analytical platform offering a suite of healthcare solutions. These include predictive and prescriptive analytics, advanced assessment methodologies, and facilitation of collaboration between organizations and medical experts to deliver medical management interventions. This approach improves the safety and efficacy of patients’ prescription drug use while addressing issues such as low medication adherence, drug abuse, and misuse. (The figure below illustrates the general pattern of medication adherence, showing that patients’ likelihood of persisting with treatment declines over time.)



RxAnte’s solution leverages existing project requirements, clinical diagnoses, and intervention data to assess the risk of adverse outcomes associated with suboptimal medication adherence for each individual. It identifies the most effective treatment regimens and assigns a dedicated professional medical team to each patient, ensuring that accurate information meets their differentiated needs. The technical team comprises experts in healthcare informatics and advanced analytics, including industry-leading data analysts, epidemiologists, clinicians, and statisticians.

The platform can predict the likelihood of patients adhering to a specific treatment regimen when they are first exposed to it, such as when initiating a new drug therapy, thereby forecasting their future medication adherence.



The merger enables the two parties to leverage their complementary strengths by combining two rapidly growing healthcare technology companies to jointly achieve their goal: enhancing safe and effective medication use for individuals through technology-enabled medication management and therapy solutions.

IV. Roche Acquires Bina Technologies
Bina has developed next-generation sequencing technology capable of processing and managing genomic data at scale with high accuracy. Its integrated, scalable, and comprehensive analysis platform enables medical researchers to derive deeper insights from genetic data, significantly reducing the complexity, time, and cost of gene sequencing, thereby accelerating the advancement of personalized medicine.

Bina specializes in genomic data management solutions. Its product portfolio includes Bina RAVE, which leverages Bina’s read alignment and expression modules along with variant detection technologies to accelerate high-throughput sequencing. Additionally, Bina offers AAiM, a solution that enables annotation completion within minutes and query and filtering operations within seconds through its annotation system and intelligent analysis modules. The company also provides Flexible Deployment solutions, allowing for flexible development and analysis of high-throughput sequencing data according to specific needs.

On December 19, 2014, Roche announced the acquisition of Bina. Since then, Bina’s genomic data analysis software, Bina-GMS, has been integrated into Roche’s sequencing workflow. The merged entity continues to develop and commercially promote Bina-GMS, which supports multiple testing technologies and is specifically developed for Roche’s sequencing systems.

Bina’s products enhance the efficiency and value of genomic analysis, as efficient information and data management methods are critical to seamless end-to-end sequencing solutions. Bina will continue to develop new algorithms to correlate next-generation sequencing (NGS) data with disease-associated genetic markers. The acquisition of Bina demonstrates that its technology has gained recognition, underscoring the increasingly significant role that big data science and information science will play in the future.



The acquisition of Bina is, in fact, part of a series of acquisitions by Roche. Last year, Roche made successive investments in next-generation sequencing technologies, having previously acquired Ariosa Diagnostics, a company specializing in non-invasive prenatal testing. In October 2014, Roche acquired AbVitro’s high-throughput sequencing sample preparation technology. In June 2014, Roche acquired Genia, a startup focused on single-molecule nanopore technology. Earlier, in 2013, Roche entered into an agreement with Pacific Biosciences to develop clinical gene sequencing systems.

V. Merck Acquires eCardio
On September 9, 2014, telehealth monitoring company eCardio agreed to merge with Preventice, a manufacturer of wearable devices and remote monitoring equipment. The newly merged entity will retain the name Preventice. This merger is expected to stimulate innovation in remote monitoring systems and advance the development of mobile health applications.

In fact, just a few weeks ago, on August 22, Merck acquired eCardio in advance. Therefore, the Merck Global Health Innovation Fund will provide funding to Preventice for its development of heart rate sensors and the BodyGuardian remote monitoring system. The merger between eCardio and Preventice also aligns with the rapidly growing market for cardiac telehealth services.

eCardio Diagnostics offers a comprehensive suite of ECG testing solutions, optimizing patient care, enhancing patient adherence, and reducing the time required to diagnose cardiac arrhythmias.



eCardio's main products are as follows:
1. eCardio Verité, a single-component, dual-mode portable cardiac telemetry monitor with built-in symptom and activity capture capabilities. Advanced algorithms detect ongoing and transient arrhythmias, including atrial fibrillation.
2. The ER920W, a single-component cardiac event monitor, employs advanced diagnostic algorithms to automatically capture asymptomatic events such as atrial fibrillation, bradycardia, tachycardia, and cardiac pauses. It automatically detects, records, and transmits abnormal cardiac rhythms, thereby improving patient compliance. Physicians can utilize the ER920W for up to 30 days of cardiac monitoring.
3. eTRIGGER: Since many cardiac arrhythmias are asymptomatic, patients often fail to recognize irregular heartbeats. eCardio’s eTrigger AF920 is a transdermal remote cardiac event monitor that automatically detects and records asymptomatic events, such as atrial fibrillation (Afib), bradycardia, tachycardia, and asystole. It also supports continuous cardiac monitoring for up to 30 days.
4. Post-Event Recorder: Detects transient symptoms; the device is lightweight, convenient, and easy to use. It also functions as a transtelephonic electrocardiogram recorder, capable of recording cardiac electrical activity following symptom onset.