February 22, 2000
FOR IMMEDIATE RELEASE
MEDICALOGIC AND MEDSCAPE AGREE TO MERGE;
MEDICALOGIC ALSO TO ACQUIRE TOTAL eMED
Combination will Create the Premier Online Health Record,
News and Information Standard For Medical Professionals and Consumers
HILLSBORO, Ore. -- MedicaLogic Inc. (NASDAQ: MDLI) today announced it has
agreed to merge with Medscape, Inc. (NASDAQ: MSCP) and to acquire privately held
Total eMed, Inc.
The new company, to be known initially as MedicaLogic/Medscape, is expected
to take healthcare efficiency and the doctor-patient experience to new and
unprecedented levels. The transactions bring together MedicaLogic, the nation's
leading provider of online health records; Medscape, the premier source of
authoritative health, news and medical information on the Internet; and Total
eMed, the first provider of Web-based transcription services designed for
ambulatory care physicians.
MedicaLogic/Medscape will have a first-to-market position with key
technology for creating online health records, enabling physicians to create and
retrieve information in ways that fit their workflow and personal preferences -
including desktop and laptop computers, personal digital assistants, and even
telephones - from any location, at any time. Medscape's professional and
consumer sites, medscape.com and CBSHealthWatch by Medscape, respectively, will
be able to introduce new levels of connectivity to registered members, including
access to physician-generated medical records, appointment scheduling, filling
of prescriptions, the ability to engage in two-way communication with the
physician and his/her office, and other services not available on competing
sites.
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Medscape shareholders will receive 0.323 shares of MedicaLogic common stock
for each share of Medscape. Total eMed is to receive 8 million shares of
MedicaLogic common stock for all of its outstanding shares and options. The
transactions will become effective upon approval by the shareholders of the
three companies and the satisfaction of other customary conditions. When
approved, the merger and acquisition would give MedicaLogic/Medscape an employee
workforce of over 1,000 healthcare and Internet experts in Portland, New York,
Nashville, San Francisco, Houston and other locations. The combined company will
operate as three business units focusing on their areas of expertise, while
delivering coordinated services in the online environment.
"Our new company has the potential to significantly improve the healthcare
experience for patients and physicians - advancing our shared vision while
creating value for partners and shareholders, " said Mark Leavitt, MD, PhD, who
will retain the title of CEO as well as becoming chairman of the board of the
combined company. "With our complementary products and services, individual
strategic partnerships and new financial strength, we will focus our energies at
the point of care where patient and physician come together to drive the major
decisions in healthcare today."
"This merger will allow us to leverage Medscape's vast audience of
healthcare professionals and consumers and our extraordinary breadth and scope
of content and features," said Paul Sheils, Medscape's CEO, who will become vice
chairman of the new company and remain president of Medscape. "We have always
believed quality content is a key to success in eHealthcare. With the
integration of products and services from MedicaLogic and Total eMed, we will
set out to prove our point, to the benefit of physicians, patients, and others
in the healthcare community."
David Moffenbeier will remain president of the MedicaLogic business
division. Richard Rehm, MD, currently the CEO of Total eMed, will take the
position of president of the Total eMed division located in Nashville. "With
this combination, we will enable the 65% of U.S. physicians using transcription
services to connect with MedicaLogic's clinical tools to create online health
records," said Rehm. "By serving physicians where they work today,
MedicaLogic/Medscape will become the online health record and information
standard."
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Leavitt said that Total eMed adds value to the new company on a number of
fronts. It offers the first pure-play, premium, Web-based medical transcription
and complementary healthcare information services utilizing digital voice
capture, dedicated circuits and the Internet to connect physicians and
professional medical transcriptionists through a national data center. Moreover,
the transcribed data can be tagged using a structured vocabulary that can be
interfaced to the MedicaLogic technology. "Once integrated, the transcribed
health record will also be enriched by Medscape data," Leavitt said. "Total eMed
provides caregivers the option of dictating their health notes and creating the
health records without typing the data themselves."
Making the Patient-Physician Relationship Stronger and Safer
The new company could also improve medical care by helping to reduce
medical errors, according to Medscape editor in chief George D. Lundberg, MD,
former editor of JAMA, who will continue his role in the new company. "We know
that large numbers of patients die annually in hospitals due to medical errors
in the United States," he said. "This loss of life is said to be the equivalent
of a jumbo jet crashing each day this year. The combination of MedicaLogic's
online health records and Medscape's authoritative content can help to reduce
medical errors and make the patient-physician relationship stronger, safer and
more efficient."
A Number of Strategic Opportunities
Leavitt and Sheils cited the following examples among many strategic
opportunities for MedicaLogic/Medscape:
o The new company will focus on providing products and services in places like
the examining room, at the "point of care." By creating the online health
record in this setting, communication between patient and physician
improves, and errors are reduced. This contrasts with the approach of other
companies that focus on the "back-office" reduction of paperwork between the
physician's clerical staff and payer.
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o Medscape's deep penetration of the medical community complements a customer
base of nearly 8,000 clinicians now using MedicaLogic products to maintain
8.1 million health records. Medscape's authoritative content and useful
features have attracted more than 1.7 million members registered as
physicians, allied health professionals and consumers. Medscape also offers
specialty sites addressing the needs of office managers, nurses,
pharmacists, medical students and others.
o The individual Web sites that Medscape creates for physician practices -
nearly 9,000 to date - could also gain a significant competitive advantage
by incorporating the connectivity features available through MedicaLogic's
products and services. MedicaLogic/Medscape can now offer the creation of
such web sites to MedicaLogic's 40 major integrated delivery network
customers.
o MedicaLogic and Medscape also plan to use Medscape's audience and assets to
gain exposure among the managed care community, and to invite Medscape's
strong base of pharmaceutical advertisers and sponsors to support the series
of new online health record products being developed that deliver content
specific to a practitioner's specialty or a patient's health interest.
Combination Will Allow Companies to Leverage Services and Partnerships
Beyond the internal strength of the combined companies, the merger would
allow them to leverage their existing strategic partnerships for greater revenue
opportunities. Medscape's partnership with CBS Corporation (NYSE:CBS), for
example, brings $150 million in advertising and promotion on CBS media
properties over seven years, as well as exposure on CBS News through an exchange
of editorial content. Medscape also has partnerships with National Data
Corporation (NYSE: NDC), America Online (NYSE: AOL) and Women.com (NASDAQ:
WOMN), while MedicaLogic has agreements with leading prescription drug, content
and delivery providers, including CVS.com (NYSE: CVS), PlanetRx (NASDAQ: PLRX),
MD Consult, Dell Computers (NASDAQ: DELL), Lernout & Hauspie (NASDAQ:LHSP) and
Envoy, to name a few.
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MedicaLogic was advised on both transactions by Donaldson Lufkin &
Jenrette. Medscape was advised by Lazard Freres. Total eMed was advised by
Credit Suisse First Boston.
About MedicaLogic
MedicaLogic Inc. (NASDAQ: MDLI), the online health record company(TM),
brings the Internet to the point of care with e-healthcare products and services
for physicians and their patients. These products and services connect patients
and physicians in ways that enhance the quality, delivery and cost-effectiveness
of healthcare. Building upon physician acceptance of Logician(R) software, the
leading EMR at integrated delivery networks nationwide, MedicaLogic delivers
Internet services and communications tools enabling physicians to manage their
health records and their practice.. Based in Hillsboro Ore, the company also
maintains product development offices in San Francisco and Houston. For
additional information about MedicaLogic, go to http://www.medicalogic.com.
MedicaLogic and Logician are registered trademarks of MedicaLogic, Inc. in
the United States. Other MedicaLogic logos, product names, and service names are
also trademarks of MedicaLogic, Inc., which may be registered in other
countries. Other product and brand names are trademarks of their respective
owners.
This release contains forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. The forward-looking statements are based on management's current
expectations or beliefs as well as on a number of assumptions about future
events, and are subject to factors and uncertainties that could cause actual
results to differ materially from those described in the forward-looking
statements. The reader is cautioned not to put undue reliance on forward-looking
statements, which are not a guarantee of future performance and are subject to a
number of uncertainties and other factors, many outside MedicaLogic's control.
About Medscape
Medscape, Inc. (NASDAQ: MSCP), the leading provider of authoritative health
and medical information on the Internet since 1995, currently operates two
primary healthcare Web sites. Medscape.com, www.medscape.com, provides
comprehensive, authoritative and timely medical information and interactive
programs to physicians, allied healthcare professionals and consumers, and
includes the following specialty sites and pages: Medscape Japan,
http://www.medscape.com/Home/MedscapeJapan/MedscapeJapan.html, Medscape General
Medicine, or MedGenMed, www.medscape.com/journal/MedGenMed, believed to be the
first and only peer-reviewed online general medical journal; Medical Office
Management, http://MedOffice.medscape.com, Medscape Nursing,
http://nursing.medscape.com; Medscape Pharmacology,
http://pharmacotherapy.medscape.com, for pharmacists; Medscape Med Students,
http://www.medscape.com/medstudent; and Today on Medscape,
http://www.medscape.com/today, featuring the latest health and medical news. As
of December 31, 1999, Medscape.com had more than 1.7 million registered members
worldwide, including over 280,000 registered as physicians, 860,000 registered
as allied healthcare professionals and 630,000 registered as consumers.
The Company also operates CBSHealthWatch by Medscape,
http://cbs.healthwatch.com, the recently launched consumer site designed to help
families and individuals make better informed healthcare decisions and to
simplify management of their healthcare needs. Developed jointly with CBS
Corporation, the site provides personalized, authoritative medical content
written for the consumer, access to professional content on Medscape.com and
interactive personal health management tools, such as health diaries. CBS and
the CBS eye device are registered trademarks of CBS Broadcasting Inc.
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The statements made in this press release contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that involve a number of
risks and uncertainties. Actual events or results may differ from Medscape's
expectations.
About Total eMed
Total eMed is a privately held Nashville-based medical information
management company offering a new approach to physician-driven medical
transcription. Total eMed provides premium web-based medical transcription
services to over 1000 ambulatory physicians in seven states utilizing digital
voice capture, dedicated circuits, and the Internet to connect physicians and
professional medical transcriptionists through a national data center. The
company's unique clinical application improves medical transcription efficiency
and accuracy while capturing the record of the patient-physician encounter in
digital format.
MedicaLogic and Medscape have scheduled a conference call about this
announcement on Tuesday, February 22, 2000 at 8:30 a.m. EST. To access the call,
please dial 1-800-720-5830 and use access code 5668830. If you plan to dial in,
please call at least 5 minutes before the start. A live Webcast of the call is
available through Vcall at www.vcall.com and through Medscape's investor
relations site, investor.medscape.com. A recording of the call will be available
later in the day and may be accessed by telephone at 1-800-252-6030, access code
5668830, or via the Internet at Medscape's investor site.
Media Contacts:
Krista Foxwell David Fluhrer Randy Hurlow
MedicaLogic Medscape Publicis Dialog
503-531-7180 212-760-3138 206-270-4642
krista.foxwell@medicalogic.com david_fluhrer@mail.medscape.com rhurlow@publicis-usa.com
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