There has been a highly speculative and questionable rumor floating around that Philips is interested in buying wireless cardiac monitoring company CardioNet. The company has had a string of bad news lately as Highmark Medicare Services officially reduced reimbursement for the company’s services starting yesterday. CardioNet is also facing class action lawsuits related to the reimbursement cut.
According to Briefing.com (via MSN Money): “Medical supplier CardioNet has seen early strength after chatter that Philips could be interested in the [company] made the rounds.” The site prefaces the rumor with: “While many rumors circulate during the day, and the validity of the source of these rumors can be questionable, the speculation may increase volatility in the stocks in the near term.”
Right now this rumor is about as far-fetched as they come, but we do wonder what kind of an effect an acquisition like this one would have on the larger wireless health industry. CardioNet has announced longterm plans to leverage its existing platform and offer chronic disease management or diagnostic tools for diabetes, sleep apnea, hypertension and more.
Philips is also quietly driving a lot of innovation in wireless healthcare. For example, the company sits on the board of directors of the Continua Health Alliance. During an interview with Mobihealthnews, Scott Smith, principal at the consulting firm Changeist recently pegged Philips as a key leader in the emerging wireless healthcare industry:
“There is a range of devices and services that still have to emerge between the industrial-grade/hospital-grade heavy equipment that we rely on today and the iPhone or Android phone in our pocket. There’s an entire evolutionary chunk that still has to be filled in there. I think that is going to happen and it is happening now. The Philips, Siemens and GE Medicals of the world are working on that. There still needs to be some input from more of the companies in the consumer electronics side to fill in the gaps,” Smith said.
What do you think — does a Philips-CardioNet deal make sense? Or is this just a bunch of hot air?
September 2nd, 2009 at 4:06 pm
A Philips/CardioNet deal makes perfect sense to me.
Although expandable, the current CardioNet model is “inch wide, mile deep” — great business/operating model but in a very narrow niche.
Philips brings the breadth across wireless, consumer and medical markets.
IMHO, investors also have greatly overreacted in beating down CardioNet stock price, so the co. is a relatively much better acquisition value than just a few months ago.
September 2nd, 2009 at 10:44 pm
[...] Rumor: Philips to acquire CardioNet? (mobihealthnews) [...]
September 10th, 2009 at 9:49 am
[...] » Rumor: Philips to acquire CardioNet? | mobihealthnews [...]
November 20th, 2009 at 12:09 pm
[...] had reported on the seemingly spurious rumors that Philips was eyeing CardioNet as an acquisition target a few months ago, but it appears that — failing a reversal on the [...]
December 31st, 2009 at 5:03 am
[...] Rumor: Philips to acquire CardioNet? [...]
February 1st, 2010 at 4:42 pm
An acquisition like that would be very good for Philips.