Philips adds Visicu and Emergin to patient monitoring stable

8 January 2008

Royal Philips Electronics announced in December two takeovers that are expected to grow its patient-monitoring business.

Early in the month, Philips acquired privately held US company Emergin, Inc. a supplier of software to rapidly transmit medical alarm signals throughout hospitals. The terms of the deal were not disclosed. The transaction is expected to close in the fourth quarter of 2007, upon which Emergin will become part of the Patient Monitoring business unit within Philips’ Medical Systems.

Emergin is based in Boca Raton, Florida, with approximately 100 employees. Founded in 1995, Emergin has seen strong demand for its software solutions, with 2007 sales at an estimated US$18 million, or roughly 50% year-on-year growth over the past three years.

Emergin produces alarm management and event notification software that helps ensure that critical information is sent rapidly to the right caregiver on the personal communication device of their choice — be it a pager, wireless telephone, PDA or LED sign. Emergin’s software has wide acceptance among hospital chief information officers (CIOs), who increasingly play a central role in the purchasing decisions at hospitals. The acquisition of Emergin will enable Philips to integrate the functionality offered by Emergin’s software directly into Philips’ current and future patient monitoring products.

Just before Christmas Philips announced a merger agreement with clinical IT and service provider VISICU Inc. (NASDAQ: EICU). Philips is offering to acquire the entire share capital of VISICU for US$12.00 per VISICU share. Philips’ cash offer values the company at approximately US$300 million (approximately 200 million). The transaction is expected to close in the first quarter of 2008.

Based in Baltimore, Maryland, VISICU produces clinical IT systems that enable critical care medical staff to actively monitor patients in hospital intensive care units (ICUs) from remote locations.

The company’s patented clinical IT system, called the eICU Program, provides real time, 24x7 patient monitoring in ICUs, and can be likened to an air-traffic controller’s station by centrally networking critical care physicians and nurses to ICU beds using voice and video. Equipped with artificial intelligence algorithms, the system also offers advance clinical support. The eICU Program has been shown to significantly reduce patient mortality, length of stay, and medical complications while lowering ICU costs.

VISICU’s eICU program can track ICU patients at various hospitals, and provides continuous monitoring of patient vitals signs, medications, labs and early-warning alarms — known as ‘smart alerts’ — which are triggered by deviations in a patients’ vital signs based on their admitting or current diagnosis.

Smart alerts use embedded algorithms and protocols to send warning signals to physicians and nurses to provide early medical intervention and optimal care. The eICU Program also supplements hospitals’ critical care staff by allowing them to increase the number of ICU patients monitored by a factor of 15. The clinical and financial benefits of the eICU Program have resulted in several affiliated hospitals electing to expand their eICU Program to serve smaller regional and rural hospitals outside of their network.

By integrating VISICU’s remote patient monitoring and clinical decision support technology with Philips’ patient monitors, both companies expect to accelerate growth by offering products that provide more effective clinical decision support to hospital staff, while allowing them to monitor far greater numbers of critically ill patients.

Founded in 1998, VISICU has a staff of approximately 100, which includes clinicians, software developers, sales and client services personnel. The company had sales over a 12-month period ending in the third quarter of 2007 of approximately US$36 million.

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