Imaging and interoperability solutions provider,
) announced another addition to its ever-increasing client list
with the latest deal with Worldwide Clinical Trials, Inc.,
a global contract research organization (CRO) that provides
full-service drug development services to the pharmaceutical and
Per the deal, Worldwide Clinical Trials will deploy Merge's
eClinical OS that provides an end-to-end study support from a
single clinical trial operating platform so that users can conduct
the studies more efficiently. However, financial settlements of the
contract were not disclosed.
At first, Worldwide Clinical Trial selected eClinical OS only to
manage the Phase I trials of their clients. However, with the
solution's capability of multiple functioning, Worldwide Clinical
Trial chose the eClinical OS for other trials as well. Merge
believes that its association with a global CRO like Worldwide
Clinical Trials is likely to provide it with a huge exposure in the
international clinical trial market.
Merge realigned its business into two operating groups in the
second quarter of 2012, after observing changes in customers'
buying habits. These operating groups, Merge Healthcare and Merge
DNA (Data & Analytics), were formed to better focus on two
primary end users: providers and consumers. Consequently, earlier
this month, the company noted another significant addition to its
We are encouraged by the fact that Merge changed its focus
according to the purchasing requirements of its clients.
We note that despite the general slowdown in hospital spending,
low demand for imaging equipment and related technology due to the
global credit crisis and macroeconomic factors, the company
reported balanced segmental revenue growth during the second
quarter of 2012.
This has been possible because of favorable demographic trends,
reinforced by a supportive regulatory environment. We expect these
factors to lead to sustained growth in demand for electronic health
record ("EHR")-related software in the foreseeable future. We
believe that Merge is well placed to gain a meaningful share of the
multi-billion dollar American Recovery and Reinvestment Act
(ARRA)-related healthcare information technology investment
However, we remain concerned about the declining Medicare
reimbursement for advanced medical imaging that could negatively
affect hospital and imaging clinic revenues, thereby reducing the
demand for imaging-related software and services offered by Merge.
Furthermore, the presence of big players like
) has made the healthcare solutions and services market highly
Currently, Merge retains a short-term Zacks #4 Rank (Sell). Over
the long term, we have a Neutral recommendation on the stock.
GENL ELECTRIC (GE): Free Stock Analysis Report
MCKESSON CORP (MCK): Free Stock Analysis Report
MERGE HEALTHCAR (MRGE): Free Stock Analysis
To read this article on Zacks.com click here.