Acquisitions / Business / Health tech

Wound care startup Tissue Analytics was acquired by Pittsburgh’s Net Health. Here’s what it means for Baltimore

It's a milestone moment for the five-year-old wound care startup founded out of Johns Hopkins' CBID. Now it will help grow predictive analytics to a Pittsburgh-based company with a leading role in health records software.

Tissue Analytics' Kevin Keenahan (left) and Josh Budman demonstrate old-school wound measurement techniques. (Photo by Stephen Babcock)

Tissue Analytics, a Baltimore startup bringing tech tools to wound care and applying predictive analytics, was acquired by Pittsburgh-based Net Health, which provides cloud-based electronic health record software.

Matching product acumen with scale, the acquisition will help Net Health expand its wound care offerings into more settings and advance the use of predictive analytics across its products, Net Health CEO Josh Pickus said.

All 30 members of Tissue Analytics’ team will join Net Health, and the company’s Inner Harbor and Kansas City offices will remain. In Net Health, it joins a company that already had six offices and whose software is used in 14,000 facilities. Tissue Analytics CEO Kevin Keenahan said it’s a leader in outpatient care settings.

“In Net Health, we saw the strongest possible partner to realize our goal of a fully connected wound care continuum,” Keenahan said, adding that he considers the company lucky to have found a partner so well-suited for expansion in the market given its roots in the clinic.

Founded in 2014 by Keenahan and CTO Josh Budman, the company set out to improve care for patients with chronic wounds like venous or diabetic ulcers, burns and surgical wounds. While in grad school at Johns Hopkins’ Center for Bioengineering Innovation and Design (CBID), they saw rounded edges of wounds being measured with straight rulers, and found that the field involved lots of guesswork.

Seeing a chance to get more certainty through technology, Tissue Analytics grew with a focus on building a product with imaging (including 3D) and measurement that would automate tracking. It also recently launched a remote monitoring app that would bring those tools to smartphones.

The “user-friendly, mobile capability” was among the product offerings that will expand Net Health’s offerings. “This is a very substantial upgrade,” Pickus said. Net Health also has a big presence in outpatient care settings, and Tissue Analytics brings a presence in inpatient and acute care settings, as well as clinical trials and product manufacturing. The company will keep the Tissue Analytics brand, but will integrate the technology under Net Health offerings, as well.

Tissue Analytics has put just as much of a priority on ensuring that technology could be interoperable with the electronic medical records systems used by clinicians that would allow it to be deployed. Pickus said the work that Tissue Analytics has already done to integrate with electronic medical records systems like Cerner, Epic, athenahealth and Allscripts was also appealing.

“Those are hard to get right and they matter a lot,” Pickus said.

Third, Tissue Analytics has a portal for clinicians that applies machine learning and analytics to help with decision making. The acquisition will help Net Health prepare for electronic health records of the future, in which analytics and other techniques could be applied to the data collected to make recommendations for patients that could potentially help improve care or reduce costs.

Net Health sees predictive analytics “as a really important piece of our future, not just for wound care, but across the product line, so this was an opportunity to accelerate our sophistication in that area,” Pickus said.

Kevin Keenahan of Tissue Analytics pitching at the Extreme Tech Challenge, CES 2018. (Photo via Twitter)

It’s a milestone moment for a company that has been tabbed as promising since returning to Baltimore after a stint in Dreamit Health’s Philly accelerator. A Beta City pitch competition winner, Tissue is among the prominent of members of a cluster of health IT companies that were formed by technologists out of Baltimore medical institutions, and grew a headquarters in the city. At the same time, it built a national presence, forging partnerships and raising funds beyond the city’s borders, then opening a Kansas City office in 2018.

Now both of the cofounders are taking on leadership roles with Net Health, with Keenahan continuing on with Net Health in a business development role, and Budman in predictive analytics.

Going forward, Net Health is planning to expand the Tissue Analytics team as part of wider hiring plans. In Baltimore and Pittsburgh, Keenahan said it now has a presence in two cities that are perhaps best-suited to its work given the proximity of medical and technology talent.

Exact terms of the acquisition weren’t disclosed. Net Health is a portfolio company of investment firms The Carlyle Group, Level Equity and Silversmith Capital Partners. Silversmith invested additional equity to support the acquisition.

“We think that it really is a fabulous not just company but group of people, but we paid them a fair price,” Pickus said.

For Baltimore, this exit of Tissue Analytics serves as an entrance of Net Health. Adding a well-known name in town is always high on the agenda for economic development, and it’s one that has for years been pursued with incentive packages for big companies. But these kinds of startup acquisitions show how homegrown firms that are drawn from categories where Baltimore has a particular advantage can help to chart a different path. With M&A like this, Analytical Informatics‘ deal with Philips and Harpoon Medical’s acquisition by Edwards Lifesciences, there’s a sign that the best prescription for business growth in the health sector may lie more with hatching companies than stealing from the nest.

Companies: Tissue Analytics

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