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Veradigm (MDRX) to Acquire AI Service Provider ScienceIO

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Veradigm Inc. (MDRX - Free Report) recently announced a definitive agreement to acquire ScienceIO, a leading provider of artificial intelligence (AI) platforms tailored for healthcare applications. This acquisition underscores Veradigm's commitment to innovation and data-driven solutions.

Veradigm will fund the acquisition of ScienceIOc, worth $140 million, in cash. The purchase price, subject to customary adjustments, includes a deferred payment of approximately $44 million, payable in installments over a span of three years.

Price Performance

For the past six months, Veradigm’s shares have lost 55.7% against the industry’s growth of 38.7%. The S&P 500 Index was up 10.8% in the same time frame.

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Veradigm's acquisition of ScienceIO will fast track the launch of new features and enhancements across its network, enhancing the overall customer experience. This strategic injection of AI will likely benefit Veradigm's Provider, Payer and Life Sciences businesses, offering highly differentiated and advanced products to its customers. By repositioning itself as a leader in healthcare data intelligence, Veradigm is poised to deliver greater value and better outcomes to patients throughout the healthcare ecosystem.

ScienceIO specializes in patient anonymization, record linkage, information extraction, summarization and predictive analytics. By integrating ScienceIO's AI platform with its own proprietary large language models, Veradigm aims to extract greater insights from its extensive data set of more than 400,000 providers and 200 million patients. This integration will ensure data integrity and patient privacy while driving innovation across the company’s business units.

Industry Prospect

A report by Grand View Research points out that the global electronic health records market was estimated at $28.1 billion in 2022, and is anticipated to witness a compound annual growth rate (CAGR) of 4.1% during 2023-2030. Government initiatives to encourage healthcare IT usage are a key driver in this market. Moreover, the introduction of technologically advanced healthcare services is also expected to drive electronic health records (EHR) market growth.     

Notable Developments

In January, Veradigm selected MedAllies, a leading healthcare interoperability and connectivity services provider, as its Qualified Health Information Network partner. The initiative will improve point-of-care decision-making by clinicians, utilizing Veradigm's EHR platform and access to a greater range of patient data, such as medication lists and medical histories.

In January, Veradigm announced its strategic acquisition of Koha Health, a full-service revenue cycle management company. This move is likely to solidify Veradigm's position in the ambulatory healthcare market and underscore its commitment to delivering comprehensive revenue cycle services.

Zacks Rank and Stocks to Consider

Veradigm currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Cencora, Inc. (COR - Free Report) , Elevance Health, Inc. (ELV - Free Report) and Cardinal Health, Inc. (CAH - Free Report) .

Cencora, carrying a Zacks Rank of 2 (Buy) at present, reported first-quarter fiscal 2024 adjusted EPS of $3.28, which beat the Zacks Consensus Estimate by 14.7%. Revenues of $72.25 billion outpaced the consensus mark by 5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cencora has a long-term estimated growth rate of 8.6%. COR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.7%.

Elevance Health reported fourth-quarter 2023 adjusted EPS of $5.62, which beat the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%. It currently carries a Zacks Rank #2.

Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 3.1%.

Cardinal Health reported second-quarter fiscal 2024 adjusted EPS of $1.82, which beat the Zacks Consensus Estimate by 16.7%. Revenues of $57.45 billion surpassed the Zacks Consensus Estimate by 1.1%. It currently sports a Zacks Rank #1.

CAH has a long-term estimated growth rate of 15.9%. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 15.6%.

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