UPDATE: Feb. 28, 2024: Veradigm will be delisted from Nasdaq Thursday for failing to file timely financial reports or hold an annual meeting of its shareholders.
The healthcare IT company disclosed the update in a filing with the Securities and Exchange Commission on Tuesday. In the filing, Veradigm said it is working to restore its listing "as soon as practicable," but that it's not certain if the company will return to Nasdaq.
Dive Brief:
- Veradigm will likely be delisted from Nasdaq because the company won’t meet the stock exchange’s deadline to comply with financial reporting requirements, the healthcare IT firm announced Tuesday.
- The company, formerly known as Allscripts, had until Tuesday to file its annual financial report for 2022 as well as quarterly updates for the first, second and third quarters for 2023. Veradigm expects to receive a delisting notice from Nasdaq on Feb. 28, and be suspended from trading.
- Also on Tuesday, Veradigm announced it had signed a definitive agreement to acquire ScienceIO, which makes healthcare large language models, for $140 million in cash.
Dive Insight:
Veradigm has been out of compliance with Nasdaq’s financial reporting requirements for months. The company determined in March last year that its financial statements could “no longer be relied upon” due to errors in previously reported revenue from internal problems, according to a filing with the Securities and Exchange Commission.
The healthcare IT firm received a delisting notice in September, but it appealed the decision. Months later, Nasdaq decided it wouldn't remove Veradigm from the stock exchange — if the company could come into compliance by Feb. 27.
Now, Veradigm doesn’t expect to meet Nasdaq’s deadline. The company is still working to file the financial statements, and will retake its listing “as soon as practicable,” Veradigm said in a press release.
Still, analysts think the company has a path to regain compliance.
Veradigm has a healthy balance sheet, and it could present a positive long-term financial opportunity if it can return to the stock exchange and rebuild confidence with investors, TD Cowen analysts wrote in a note on Tuesday.
The company adopted a shareholder rights plan that could protect against a potential hostile takeover as it manages its delisting. Veradigm also reaffirmed unaudited financial information released in January — an encouraging sign, according to TD Cowen analysts.
The company estimated revenue between $608 million and $622 million for its fiscal year 2023. Net income from continuing operations is estimated between $49 million and $58 million, according to the filing.
Alongside the anticipated delisting, the company said it would acquire ScienceIO. Founded in 2019, the company offers artificial intelligence models that can be used to structure medical data and identify protected health information as well as redact that data to protect patient privacy, according to the company’s website.
Veradigm said in a press release it will use the deal to build proprietary large language models using its own dataset, which includes a network of over 200 million patients. The acquisition will close as soon as possible.
The deal announcement comes months after Veradigm announced it had purchased revenue cycle management firm Koha Health.
