Epocrates Inc. — the San Mateo, California, company that makes mobile drug reference tools — has acquired Modality Inc. in Durham, North Carolina, for $13.8 million in cash.
Modality develops digital learning, assessment, training and reference applications for Apple iPad, iPhone and iPhone Touch mobile devices. Its acquisition will expand Epocrates’ product portfolio and Apple app-development workforce.
Ever since Apple created a dedicated category for medical applications for the iPhone and iTouch in November 2008, it seems “the medical community is flocking to the iPhone,” according to mobihealthnews. In January 2009, Apple’s AppStore started stocking Epocrates Essentials for iPhone and iTouch users.
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“We have the trust of more than one million healthcare professionals, and with Modality, a richer, advanced Apple development expertise,” said Rose Crane, chief executive officer for Epocrates, in a press release. “Together, we will cultivate even more cutting-edge and indispensable apps for clinicians that directly impact patient care.”
Used by more than 175,000 U.S. physicians, Epocrates is the top drug reference application on Apple mobile technologies, the company said. With Modality’s Internetwork Operating System development expertise, Epocrates will try to churn out more new education and resource apps for clinicians.
“Transforming best-in-breed content from the world’s largest medical publishers into engaging and powerful mobile user experiences has been our focus for years,” S. Mark Williams, Modality’s CEO and founder, said in Epocrates’ release.
On Wednesday, Epocrates updated its registration statement for an initial public offering that could raise as much as $75 million. Epocrates plans to use the money raised through the offering to pay $28.6 million-worth of preferred stock dividends, as well as for working capital, research and development, sales and marketing and capital expenditures.
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It’s the company’s second shot at an IPO. Epocrates filed for a $75 million initial public offering in 2008, then pulled the filing after the U.S. economic crisis began.
For the nine months ended Sept. 30, Epocrates had a net loss attributable to common shareholders of $1.5 million, or a loss of 16 cents a share, on revenues of $73.7 million. That compared to net income of $702,000 on revenues of $66.2 million, or 6 cents a share, in the same 2009 period. The company had 292 employees on Sept. 30.
