- Ciox Health and Datavant are merging in a deal valuing the combined health data companies at $7 billion, the latest in a string of mergers meant to unite siloed data in healthcare.
- The combined company, called Datavant, will facilitate data exchange across a network of thousands of hospitals and clinics, and bring in annual revenue of $700 million, according to the Wednesday announcement.
- The merger, expected to close in the third quarter, could pave the way for an initial public offering in the future, unnamed sources close to the deal told Bloomberg.
Real-world health data company Datavant and health record IT firm Ciox Health say combining forces will result in the largest health data ecosystem in the U.S., making patient-level medical information more widely accessible to doctors and researchers.
Together, San Francisco-based Datavant and Alpharetta, Ga.-based Ciox have a network of more than 2,000 U.S. hospitals and 15,000 clinics, along with hundreds of health plans, health data analytics and life sciences companies, government agencies and academic bodies.
The fragmentation of data is a big problem facing healthcare, and making it easier to share health information holds the potential to improve patient outcomes, foster drug development, advance value-based models and contribute to medical research. That's why HHS has made improving interoperability a key prong of its healthcare agenda over the last few administrations.
But rising data-sharing is creating a lucrative third-party data market, giving rise to worries about patient privacy as medical datasets rapidly expand. There are real risks to aggregated, de-identified patient data, which is largely unregulated by the HIPAA privacy law, and could be subject to various types of monetization once it's wiped of patients' names and other identifying information, and leaves a covered healthcare entity.
Ciox, which was created by the merger of HealthPort, IOD Inc., Care Communications Inc. and ECS in 2015, and Datavant, which was founded in 2017, say they don't sell patient data to any third parties.
The merger is supported by a group of investors including investment firm New Mountain Capital, LabCorp and Roivant Sciences. Pharma giants Merck and Johnson & Johnson also invested, as did payer Cigna's venture arm.
The deal is the latest in a flurry of tie-ups and partnerships in the health data connectivity space. In December, EHR giant Cerner snapped up the health division of Kantar Group for $375 million to advance its clinical research development. In February, 14 health systems formed Truveta, a company working on aggregating and selling de-identified data from their combined millions of patients; while just last month, several health data aggregators formed an industry coalition to advance the use of real-world data in regulatory decisions.
For their part, Datavant's closed two acquisitions, of IT company Highland Math in 2020 and data connectivity player Health Data Link in 2019, while Ciox bought AI company Medal last year.
The combined Datavant will be led by Coix CEO Pete McCabe, while Datavant CEO Travis May will be president and join the board of directors.