Healtheon/Medical Manager merger still a go - COO
NEW YORK, March 21 (Reuters) - Internet healthcare company Healtheon/WebMD Corp. <HLTH.O> said Tuesday it was "absolutely committed" to its merger with Medical Manager Corp. <MMGR.O> and its unit CareInsite Inc. <CARI.O>
Speaking to analysts and reporters at the ING Barings Health Internet Conference, Healtheon Chairman and Chief Operating Officer Mike Long said he was confident that the merger would be completed despite the fact that Healtheon's share price had taken a beating since the merger had been announced.
The sentiment was echoed by CareInsite Chairman Martin Wygod.
"The major strategic reasons for the merger are as strong today as they were when we made the announcement. The combined entity will be a winner in the space...it will be an interesting challenge for someone to displace us," Wygod said.
One analyst said Wygod's presence was a bonus for Healtheon.
"Having Wygod on board is a strength for them," said Claudine Singer, an analyst with Jupiter Communications. "He's a healthcare visionary, he creates he new markets within healthcare. If he pulled out there would be a problem."
The Atlanta-based Healtheon has been on a spree to set up partnerships and financing in the online health market, but its stock has taken a hit in the past few months. In February, when Healtheon announced its intention to acquire Medical Manager the stock was at 72, the shares closed Tuesday at 29-13/16.
"The decline in the stock is reflective of general market agita and distrust in the sector," said Singer.
Despite the setback, the company plans to form partnerships over the coming year, Chief Executive Jeff Arnold said. Current partners include Microsoft Corp. <MSFT.O>, the number 1 U.S. chemical company DuPont Co. <DD.N> and drug group Eli Lilly and Co. <LLY.N>
If Eclipsys Corp. <ECLP.O> succeeds in its bid to acquire Shared Medical Systems Corp. <SMS.N>, Long said Healtheon would be interested in a partnership. "We would love to have a connectivity relationship with that installed base."
Long also responded to a published report which said that Healtheon would "burn" through its cash by September.
He said the company had 192 months worth of remaining cash, and questioned the formula used to tally the burn rate.
Pegasus Research International, which calculated the burn rate of dozens of Internet high-flyers, released a statement on Tuesday that Healtheon was more solvent than originally reported and ranked it number 68, rather than 30, on the list of 207 Internet companies featured in the study.
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