Epocrates IPO reveals $400K mobile EHR acquisition

By: Brian Dolan | Jul 19, 2010        

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iChart Mobile EMR iPhone AppEarlier this year at the HIMSS event, Epocrates announced its plans to offer an affordable, easy to implement electronic health record specifically for the solo practitioner or small physician group. At the time it was a bit of an open secret that Epocrates had acquired some of Caretools’ iChart assets since Epocrates named Dr. Tom Giannulli an “essential member of the Epocrates EHR development team.” Details, however, were scant.

According to Epocrates’ recent IPO filing document with the SEC, the company paid $400,000 to acquire certain “intangible assets” of Caretools that would help it create its forthcoming EHR product.

Giannulli developed and launched iChart in the summer of 2008 and sold iChart as an iPhone-based EHR app. By April 2009, Giannulli had sold the iChart app to 1,000 users in nine different countries. After the rev share with Apple, Giannulli would have likely raked in $97,000 from the $139 app.

Just two months later Epocrates purchased at least some of Caretool’s assets.

“In June 2009, we acquired certain intangible assets of Caretools, Inc. The acquisition was accounted for as a business combination under GAAP. Certain intangible assets acquired from Caretools will be used in our EHR product. Contingent consideration is calculated based on an estimate of royalties on revenue generated through June 2013 from the sale of products incorporating Caretools’ technology. For the three months ended March 31, 2010, we recorded a change in the fair value of the contingent consideration of $1.2 million. The change in the fair value of the contingent consideration was based on new estimates of revenue to be generated using the acquired technology,” according to the Epocrates SEC filing.

The filing also notes that Giannulli has served as Epocrates Chief Medical Information Officer since August 2009. Here’s the brief Giannulli bio provided in the SEC filing:

“Thomas C. Giannulli has served as our Chief Medical Information Officer since August 2009. From September 2003 to August 2009, Dr. Giannulli served a the Chief Executive Officer of Caretools, Inc., a healthcare technology company, where his primary responsibilities included leadership and oversight of all operational functions of the company, as well as development of strategic initiatives. From July 2001 to December 2004, Dr. Giannulli served a chief executive officer of Healthscan, Inc., a CT imaging center, where his primary responsibilities included leadership and oversight of advanced imaging development activities. Dr. Giannulli holds a B.S. from University of California, Irvine, an M.S. from University of Utah and an M.D. from University of Texas at Houston Medical School, where he completed a residency in internal medicine.”

For more, read the entire SEC document for Epocrates IPO filing here.