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Merge eyes strategic options, hit with FDA warning letter
By Erik L. Ridley, AuntMinnie staff writer

September 6, 2012 -- Healthcare IT and advanced visualization developer Merge Healthcare has retained investment bank Allen & Company to assist the firm in evaluating a broad range of strategic alternatives, including a sale of the company or a business combination.

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Merge said it does not have a defined timeline for the strategic review, and that there can be no assurance that the review will result in any specific action or transaction. It also does not intend to comment further regarding the evaluation of strategic alternatives unless a definitive agreement for a specific transaction is entered into, the process is concluded, or it otherwise deems further disclosure is appropriate or required, according to the company.

Merge's stock price was up nearly 10% in midday trading on the Nasdaq Global Select Market.

In other Merge news, the company received a warning letter from the U.S. Food and Drug Administration (FDA) on August 24 relating to its manufacturing of blood pressure monitoring computer kiosks.

An FDA investigator noted a number of violations at Merge's Winchester, TN, location:

  • Failure to establish and maintain adequate procedures for implementing corrective and preventive action
  • Failure to establish and maintain adequate procedures for receiving, reviewing, and evaluating complaints by a formally designated unit
  • Failure to review, evaluate, and investigate complaints involving the possible failure of a device, labeling, or packaging to meet any of its specifications unless such investigation has already been performed for a similar complaint and another investigation is not necessary
  • Failure to establish and maintain adequate procedures for finished device acceptance to ensure each production run, lot, or batch of finished devices meets acceptance criteria before being released for distribution
  • Failure to establish and maintain adequate procedures to control all documents
  • Failure to adequately analyze service reports with appropriate statistical methodology

Merge executives were unavailable for comment on the letter as of press time.

Merge takes iConnect order, August 24, 2012

Merge adds subscription customers, August 15, 2012

SimonMed installs Merge software, August 13, 2012

Merge nets 13-hospital network in Midwest, August 3, 2012

Merge sales up in Q2, but loss widens, July 31, 2012

Copyright © 2012

Last Updated 9/6/2012 9:47:14 AM

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