AthenaHealth to Acquire Epocrates

Athenahealth (Watertown, MA, USA), a provider of online services to doctors and hospitals, is acquiring Epocrates (San Mateo, CA, USA), developer of a leading smartphone app for doctors.

The purchase is intended to help athenahealth build a health information backbone that will be able to better serve an expanded network of providers, by transforming the way physicians access and engage with clinical information, with each other, and with their patients. Athenahealth may also benefit from name recognition for the Epocrates app, which as of August 2012 was used by 338,000 U.S. physicians to call up summaries on drugs, including side effects and interactions. Athenahealth estimates that about 90% of doctors had heard of Epocrates, three times the recognition factor of athenahealth itself.

Additionally, the acquisition will enable athenahealth to combine Epocrates’ mobile expertise with knowledge and data from athenahealth’s cloud-based network, and introduce new mobile applications that will deliver high-value information to the clinical community. The combined company will also seek to pioneer new mobile workflows to improve provider efficiency and support care delivery outcomes, including care coordination, provider-to-provider communication, and patient engagement tools. The closing of the transaction is subject to the approval of Epocrates shareholders and other customary closing conditions, and is expected to occur early in the second quarter of 2013.

“I have been an admirer of Epocrates since it first emerged and have watched the company grow consistently, one app download at a time, as it has cemented itself into the consciousness of America’s physicians,” said Jonathan Bush, president, chairman, and CEO of athenahealth. “We are confident that we can provide Epocrates with the stewardship and resources it needs to grow and develop within health care, and that Epocrates' capabilities are going to mesh exceptionally well with athenahealth’s cloud-based physician and patient services.”

“Epocrates and athenahealth are two strong and progressive brands dedicated to helping clinicians deliver high quality care more efficiently through continued innovation and a keen understanding of physicians’ workflows,” said Andrew Hurd, President, CEO, and interim CFO of Epocrates. “By combining the companies’ unique expertise in mobile and cloud-based services, we are setting out to dramatically improve the accessibility of information and redefine the dynamics within health care.”

Epocrates was founded in 1998 to provide drug information to doctors using the PalmPilot, and rose to prominence on the iPhone soon after the Apple App Store opened in 2008. Apple officials, including now-deceased CEO Steve Jobs, had highlighted Epocrates in speeches, and the application was voted the “Most Important Mobile Health-Care App” in December 2012 by the website ModernHealthcare. While most doctors use a free version of the app, the company charges drug companies for sponsored links that doctors see when looking up drug information.

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