UPDATE: April 20, 2021: Cigna announced Monday it had completed the acquisition. MDLive will operate as part of Evernorth's portfolio that also includes pharmacy benefit manager Express Scripts.
- Cigna's health services division Evernorth has entered into a definitive agreement to acquire fast-growing telehealth vendor MDLive, banking on continued demand for virtual care post-COVID-19.
- The deal, which is expected to close in the second quarter of this year, will mean MDLive's telemedicine offerings will be available to Evernorth's third-party clients, along with Cigna's medical customers and clients in the U.S. Financial terms of the acquisition were not disclosed.
- Cigna expects to reaffirm its previously projected full-year revenue guidance of at least $165 billion on its investor day March 8, according to an SEC filing on Friday. The Bloomfield, Connecticut-based payer expects adjusted income from operations of at least $6.95 billion or $20 a share in 2021. The outlook includes the impact of the MDLive acquisition.
The telehealth market has become increasingly saturated as demand for virtual care snowballed amid COVID-19. Smaller vendors have been jockeying for space against more entrenched telehealth giants like Teladoc and Amwell, which are racing to expand their suite of services to get closer to the ultimate goal — end-to-end, whole-person virtual care — before their competitors.
Cigna has been a long-term partner of MDLive and investor in the business, but bringing the telehealth vendor permanently under its umbrella will help fuel MDLive's growth strategy in this fast-paced environment. Key goals are earlier identification and diagnoses of care needs, faster referrals to providers, including specialists, and more convenient access to appropriate care sites and medication fulfillment, the company said in a statement announcing the deal.
Speculation had grown in recent months that MDLive would follow many of its competitors and go the IPO route, but Friday's announcement makes it clear that's not in the cards.
The acquisition also benefits Cigna, as insurers increasingly look to bring more health services in-house to offer more coordinated care to clients, in lieu of them seeking out disparate point solutions from rival companies.
Cigna rebranded its health services division as Evernorth in September in a bid to spur more interest in its products from potential industry clients. Evernorth, the parent company of pharmacy benefit manager Express Scripts, specialty pharmacy Accredo and medical benefit manager eviCore, brought in $116.1 billion in revenues for Cigna last year, a 20% jump from 2019, according to Cigna's annual report.
Like its peers, private vendor MDLive has seen accelerating visit volume last year as consumers sought out digital channels to access healthcare in the relative safety of their own homes. In the first half of 2020, MDLive saw its virtual visits rise by 95% and total bookings up a whopping 300%, with specialty visits like behavioral health and dermatology especially in demand.
Since launching in 2009, MDLive has brought in almost $200 million in funding, with Cigna's venture arm as a key investor. Most recently, the company announced a $50 million investment in September to build out its virtual primary care platform.