Dive Brief:
Amwell is selling its virtual psychiatric care business to fellow telehealth provider Avel eCare for about $21 million in cash, the company said Thursday.
The divestiture, which includes an additional earn-out payment for Amwell if the business meets financial targets, includes the psychiatric care segment’s technology and personnel along with Asana, a clinical network that employs and contracts with the unit’s clinicians.
Amwell CEO Ido Schoenberg said in a statement the sale strengthens the telehealth firm’s balance sheet and “fortifies our confidence” to reach positive cash flow in 2026.
Dive Insight:
Amwell purchased the Asana medical group in 2019 with the acquisition of telehealth and telepsychiatry provider Aligned Telehealth. In 2021, the company launched Amwell Psychiatric Care, which used Asana clinicians to offer telepsychiatry services to hospitals and health systems.
The unit’s sale will bring about 40 health system clients in multiple states to Avel eCare, a spokesperson told Healthcare Dive.
Amwell will continue to offer behavioral healthcare, including therapy services and its SilverCloud digital mental health offering, through its medical group, the telehealth company said in a press release. Amwell Medical Group included 3,000 providers at the end of 2023, according to a securities filing.
The telehealth company said the divestiture will help focus its product portfolio on growth initiatives.
During a third quarter earnings call in October, Schoenberg noted that Amwell would hone in on its core services subscriptions for providers and payers, “de-emphasizing any other businesses and focuses that are less accretive and less relevant to our overall strategy.”
Still, the company doesn’t have any plans for additional divestitures at this time, a spokesperson told Healthcare Dive.
Amwell’s stock price has plummeted in the years since it went public during the COVID-19 pandemic in 2020. Last summer, the telehealth vendor implemented a reverse stock split to avoid being booted from the New York Stock Exchange because its stock price was trading below minimum standards.
In the third quarter, Amwell reported a $44 million net loss, compared with a $137 million loss in 2023 when the company logged a non-cash goodwill impairment charge.
On Thursday, the telehealth vendor reiterated its 2024 guidance, expecting revenue between $247 million and $252 million and adjusted earnings before interest, taxes, depreciation and amortization to be a loss of $137 million to $142 million.
