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RadNet company DeepHealth has signed a $103m deal to acquire iCAD, an AI-powered breast cancer screening company based in New Hampshire, US.
The merger agreement’s terms equate to an all-stock buyout of iCAD at approximately $3.61 per share on a fully diluted basis. Subject to customary closing conditions, the transaction is expected to complete by Q3 2025.
According to Dr Andrew S Thompson, director of therapy research and analysis in medical devices for GlobalData, the timing of the deal is interesting given US President Trump's support for Project Stargate, a strategy to reindustrialise the US by driving serious AI infrastructure projects. The project will support and accelerate the use of AI in medical imaging and is earmarked to be a major application in medtech for the foreseeable.
“However, there is a lot of competition, and it’s getting to be quite a crowded field without a clear leader,” Dr Thompson said.
According to GlobalData analysis, the global breast imaging market is set to reach a valuation of $4.7bn in 2025, driven in part by technological advancements and increasing awareness of breast cancer screening.
Dr Thompson continued: “There are significant challenges in generating internationally universal solutions based on AI; one of the reasons for mammogram inaccuracy is breast tissue density, and this is related to ethnicity. A training dataset based on US women may not be applicable to Japanese women, for instance.
“These doubts may delay regulatory approvals. The regulators themselves may need access to patient healthcare data to test manufacturer claims. The regulators are struggling to understand the technology, and consequently, there can be expected changes to regulations, which will probably not be coordinated at the international level.”
Dr Thompson added that iCAD’s pipeline also includes some near market products in brachytherapy for colorectal cancer, prostate cancer and brain cancer, which seem “less relevant to RadNet's diagnostic imaging business”.
“I am not sure if that means the creation of a new business for the company, in cancer treatment, or if this is a part of the business it might look to divest,” he added.
RadNet president and CEO Dr Howard Berger commented: “iCAD’s ProFound Breast Health Suite and RadNet’s DeepHealth AI-powered breast screening solutions, together, have the power to materially expand and improve patient diagnosis and outcomes on a global basis through further enabling accuracy and early detection.
“This business combination is expected to accelerate our global leadership and commitment to AI-powered breast cancer screening and positions us to further advance population health.”