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Alongside its purchase of BioTelemetry, Philips announced on 19 January that it had signed an agreement to acquire Capsule Technologies, a medical device integration company.

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While not explicitly a remote care solution, Capsule’s platform can be used to enrich patient care management solutions both in a hospital and remotely by aggregating clinical data from numerous connected devices in one place.

“BioTelemetry provides services for over one million patients per year and has built the world’s largest remote cardiac monitoring services network. Acquiring BioTelemetry will further broaden and scale our patient care management solutions for the hospital and the home to enhance patient outcomes, streamline clinical workflows and increase productivity.”

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Philips has attributed this growth to the increased demand for remote healthcare products as a result of the Covid-19 pandemic, but stressed that this is far from a new area of business for the company.

Health tech giant Royal Philips has entered into a definitive agreement to acquire remote cardiac care company BioTelemetry for $2.8bn and announced plans to purchase Capsule Technologies for a cash consideration of $635m. Remote care platforms and the technologies that enable them are increasingly in demand, but what do these deals signal for medtech?

Telehealth has boomed in the wake of the Covid-19 pandemic and is expected to keep growing at a compound annual growth rate (CAGR) of 18.9% from 2019 to 2026, according to ResearchAndMarkets.com.

BioTelemetry remotely monitors more than one million cardiac patients annually and boasts wearable heart monitors and artificial intelligence (AI)-based data analytics within its portfolio.

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Capsule’s Medical Device Information Platform is comprised of device integration, vital signs monitoring and clinical surveillance services. It connects almost all existing medical devices and electronic medical records (EMRs) in hospitals through a vendor-neutral system, streaming clinical data and transforming it into actionable information for patient care management teams.

After weeks of negotiation, in mid-December 2020 Royal Philips entered into an agreement to acquire remote cardiac diagnostic and monitoring company BioTelemetry for a stock deal valued at $2.8bn.

However, Philips expects the increased demand for its connected care portfolio to abate somewhat over 2021 as the Covid-19 crisis lessens. While the pandemic is far from over, worldwide rollouts of numerous highly effective vaccine candidates have led many in the industry to anticipate waning remote care demand over the course of the coming year.

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A Philips spokesperson told Medical Device Network: “The acquisition of BioTelemetry will add to [Philips’ portfolio of] leading cardiac diagnostics and monitoring solutions, comprised of wearable connected heart monitors, AI-based data analytics and services. These clinically validated solutions are focused on the diagnosis and monitoring of heart rhythm disorders.

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“Connected care and remote monitoring outside the hospital have been part of Philips’ strategy for many years,” says a Philips spokesperson. “We have supported care providers with our secure, connected and AI-enabled solutions for monitoring in the hospital, plus screening, remote patient monitoring and care at home. This has been accelerated by Covid-19, but it is not new to Philips.”

Technologies and services such as those offered by BioTelemetry and Capsule have gone from new-fangled luxuries to de rigueur for many healthcare providers in 2020 and are likely to remain popular even after Covid-19 restrictions are lifted due to the many benefits they offer patients and practitioners at the system level.

This transaction is likewise expected to complete in Q1 2021 and will see Capsule’s approximately 300 employees become part of Philips Connected Care.

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The sale, which is expected to complete during Q1 2021, has been described by Philips as a “strong fit” with the rest of Philips’ cardiac portfolio by the company.

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In a statement, Royal Philips chief business leader of connected care Roy Jakobs said: “The acquisition of Capsule will further expand our patient care management offering. We look forward to integrating our strengths, adding a vendor-neutral medical device integration platform that further unlocks the power of medical device data to enhance patient monitoring and management, improve collaboration and streamline workflows in the ICU, as well as other care settings in the hospital and beyond its walls.”

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Philips will pay BioTelemetry shareholders $72 per share, representing a 16.5% premium on BioTelemetry’s closing price of $61.76 per share as of 17 December 2020. Following the news of the agreement, the company’s stock value rose to $72.22 on 18 December.

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Upon completion of the transaction, BioTelemetry and its workforce of approximately 1,900 employees will become part of Philips’s Connected Care enterprise, which specialises in patient monitoring solutions.

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Philips reported 7% comparable Q4 sales growth this week, with the €6bn revenue secured by the company beating analyst estimates by around €40m. The company’s diagnostics and treatment, personal health and connected care departments all outperformed expectations, but connected care stood out with 24% year-on-year comparable growth in sales.

Despite the expected downturn for telehealth, the pandemic has cemented remote healthcare pathways as viable options even when it’s safe to see patients face-to-face. A medtech giant such as Philips continuing to confidently invest in connected care sends a signal that this is an area of the sector that will continue to thrive even after the pandemic boom ends.

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