Doximity, a networking platform for healthcare professionals, announced it acquired Montreal-based Pathway Medical, a company that provides AI-driven clinical decision support, in a deal worth $63 million.
According to Doximity, the transaction closed on July 29, for "cash consideration of $26 million and not exceeding $37 million in additional equity grants."
Doximity provides members with digital tools to help them collaborate with colleagues, obtain medical news and research, oversee their careers and on-call schedules, conduct virtual patient visits, and help with documentation and administrative tasks.
The company says its medical network includes more than 80% of physicians and an increasing number of nurse practitioners, physicians and pharmacists.
Pathway Medical provides clinicians with answers to medical questions. The company's client base includes licensed medical doctors, medical residents, medical students and other licensed healthcare professionals.
"We’re thrilled to welcome the Pathway team to Doximity," Jeff Tangney, cofounder and CEO of Doximity, said in a statement. "They’ve painstakingly built one of the best datasets in medicine and it’s going to take our clinical reference capabilities to an entirely new level."
Jon Hershon, CEO of Pathway, noted that there is an increasing need for clinical tools that combine trusted evidence with the speed and adaptability of AI.
"Hundreds of thousands of users have registered for Pathway and thousands pay $300 per year for our premium product," Hershon said in a statement. "With Doximity, one of the most trusted platforms in healthcare, we’re now bringing that experience to millions for free, built directly into the tools they already use at the point of care."
THE LARGER TREND
In 2022, Doximity acquired Amion, an on-call physician scheduling and messaging app.
According to a filing with the Securities and Exchange Commission, Doximity acquired Amion for $53.5 million in cash at the time of closing, plus an earnout consideration of up to $24 million, subject to performance.
The company also gave around $5 million worth of restricted stock units to some employees joining Doximity.
Doximity went public in 2021. The stock is currently trading on Nasdaq under the ticker symbol DOC at $61.83 per share.
In February, OpenEvidence, an AI-enabled medical research aggregate platform for doctors, filed a lawsuit in the United States District Court of Massachusetts against Pathway Medical, alleging that Pathway engaged in "brazen efforts, over a period of many months, to compromise OpenEvidence’s leading artificial intelligence (AI) medical information platform using stolen credentials and malicious inputs, steal OpenEvidence’s highly valuable trade secrets and utilizing this stolen information, develop a 'copycat' company and platform that directly competes with OpenEvidence."
Additionally, the complaint alleges the "defendants improperly and under false pretenses invaded the OpenEvidence AI platform repeatedly, executing dozens of 'prompt injection' attacks, a type of cyberattack that is uniquely harmful to AI systems in which hackers and other bad actors disguise malicious inputs as legitimate prompts, which are designed to bypass the restrictions implemented on a generative AI (genAI) system and manipulate that system into divulging sensitive and proprietary information or worse."
In June, Pathway Medical asked a Massachusetts federal judge to dismiss the lawsuit brought forth by OpenEvidence.
In the company's request to dismiss, Pathway said the complaint was an attempt to thwart competition based solely on speculation.
According to LAW360, Pathway Medical in its motion to dismiss rival OpenEvidence's lawsuit, "denied stealing or using any secret information from the Cambridge-headquartered startup by simply accessing its website and using its chatbot, which Pathway said amounts to a common business practice that OpenEvidence has also engaged in."
The case is ongoing and the next hearing is scheduled for Aug. 15.
