Zacks_Analysts' Blog : Merge Takes Up 7 New - Analyst Blog

With an aim to strengthen its position in the health IT (HIT) market, Merge Healthcare (MRGE) has taken up seven new contracts for its clinical trials solutions. In this regard, the company signed a deal with North Carolina based Cato Research Ltd., a Contract Research Organization (CRO) which will use Merge’s cost saving solution myEDC for its early phase trials.

Merge has started the year with a strong note. In January 2011, its iConnect which is an interoperable platform that enables providers to view current and historical images and content, irrespective of the various ways of image storage, has been selected by Radiology Associates of Sacramento (RAS), North California.

Merge is confident about its iConnect platform and expects greater acceptance of the solution going ahead. Also in this month it provided an improved imaging distribution solution iConnect Access to the physicians of UMass Memorial Health Care of New England.

In November 2010, Merge had a distribution agreement with Salumed, a large healthcare equipment distributor in Ecuador. Salumed has licensed Merge software technology for image management, specialty image review in orthopedics, mammography and practice management.

Merge is confident that its iConnect solution has great opportunity particularly in Western Europe, which has high digital adoption. With these efforts, Merge is on its way to record higher sales from the international market.

Earlier in April 2010, after the acquisition of AMICAS, an image and information management solutions provider, the company has undertaken several changes which consist of restructuring at the top management level and increasing the sales force.

Although there is huge potential in the diagnostic imaging market, especially with the government’s emphasis on HIT and an aging population, Merge's growth prospect is highly dependent on capital investments by hospitals for advanced imaging solutions which are tied to general economic conditions.

Moreover, the competitive landscape of the HIT market with major players like GE Healthcare, Siemens (SI) and McKesson (MCK) is creating a tougher ground for Merge.