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Eclipsys Becomes Part of the On/Off Merger Story

In a move that is becoming all too predictable in the healthcare ASP arena, solutions deliverer Eclipsys Corporation today announced the termination of all merger agreements with Neoforma.com.

The break-up was a mutual agreement and is effective immediately, according to both companies.

In related news, Eclipsys' healthcare Internet affiliate HEALTHvision , Inc. has followed suite and agreed with Neofroma.com to end their previously announced merger agreement.

A rising theme lately seems to be the on-again, off-again news of merger and merger break-ups (see related ASP-News story, Mergers Coming to Halt for Healthcare ASPs, May 17th, 2000).

According to Eclipsys, even after word of the merger call-off with Neoforma.com, its relationship with HEALTHvision will still allow the companies to provide new e-health solutions and remain attractive to stockholders.

Harry Wilson, chief executive officer, believes the ties between Eclipsys and HEALTHvision will continue to evolve. "Our staffs work collaboratively to develop and provide advanced Internet solutions," he said.

Wilson said that together the two companies provide the key to improving healthcare organization's processes and outcomes all by enabling it to link its key constituents.

In related news, the company also announced it was moving faster to a subscription-based pricing model. Most ISVs shy away from this model because it implies a short-term dip in revenues as the monthly payment model defers revenue that would otherwise come in a single up-front payment.

Eclipsys remains confident in its choice. "Subscription-based methodology is increasingly sought by capital-constrained healthcare organizations, and this move will significantly increase Eclipsys' percentage of recurring revenues," Wilson said

Eclipsys previously announced it expected to hit the $3 million mark this year. Now, Greg Wilson, senior vice president and chief financial officer, said, "Eclypsis anticipates 2000 revenues in the range of $210 million to $220 million." 2001 revenues are plotted at $260 to $270 million.

The revised numbers reflect the loss of some anticipated cross-selling opportunities that would have been available through the relationship with Neoforma.com and HEALTHvision.

But Eclipsys believes the company is still well positioned for growth.

"We expect that our new ASP payment methodology will continue to enable Eclipsys to gain market share," Harvey Wilson said.



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