Toronto-based mobile health company Diversinet agreed to sell its assets to subsidiaries of Parsippany, New Jersey-based IMS Health for about $3.5 million (US). The sale includes Diversinet's intellectual property, software, and customer contracts. Some employees will also be offered positions at IMS, once the deal is finalized. The asset acquisition is still subject to the approval of the company's shareholders but a vote is scheduled for mid-September. Diversinet plans to liquidate its remaining assets and wind the rest of the business up.
Diversinet was a particularly active mobile health company in 2009 and early 2010. Back then it provided the key technology to a joint venture called AllOne Mobile, a mobile-centric PHR offering that focused heavily on its security features and was affiliated with Blue Cross NEPA. Diversinet provided security and encryption for AllOne mobile users’ health information and also enabled the software to run across a number of mobile platforms. The AllOne-Diversinet partnership secured deals with the U.S. Army, Significa Insurance Group (Significa), Erin Group Administrators (EGA), Blue Cross NEPA and others. After slow growth AllOne Mobile shutdown in late 2009 but not before paying out about $4 million in contractual obligations to its key technology partner Diversinet.
Over the years Diversinet offered secure mobile app technology to other mobile health companies, payors, providers, and medical device companies as well as secure messaging services, called MobiSecure SMS. Last year Diversinet attained Federal Information Processing Standards (FIPS) 140-2 validation by the National Institute of Standards and Technology (NIST) for its MobiSecure technology -- a required certification for technology intended for use in protecting sensitive government data. AirStrip Technologies was one of Diversinet's better known customers. In late 2012 Diversinet announced a new product called the Wallet, a secure, personalized virtual container for downloading, entering, managing and sharing personal health information, that is designed to work with the federal government's Blue Button initiative.
Diversinet's revenues for the second quarter of 2013 were $263,000 down from $419,000 year over year. Total revenues for the first half of the year were $566,000 down from $701,000 during 2012's H1. Net loss for Q2 was $794,000. Diversinet delisted its shares from the Toronto Stock Exchange on August 13th.
The acquisition is a telling move for IMS Health, which now has a portfolio of mobile health-related patents. While the company has yet to make any other major moves in mobile health, it was the first health company to get the greenlight from Ford to integrate its app -- an allergy management app -- with the car company's onboard computing systems.
UPDATE and Correction: The original version of this story incorrectly stated the acquisition price was $3.5M Canadian or $3.4M US. It was actually $3.5M US.