Darwin's Our Take 5.11.26: UPMC to acquire Trinity Health from CommonSpirit, WakeMed to merge with Advocate’s Atrium Health

Two of the nation’s largest nonprofit health systems announced substantial deals earlier this month.

In one of the deals, Chicago-based CommonSpirit signed a definitive agreement to transfer ownership of Trinity Health System, a three-hospital system based in Steubenville, Ohio, to Pittsburgh-based University of Pittsburgh Medical Center (UPMC).

CommonSpirit and Trinity Health have been seeking a regional buyer for Trinity for over a year. UPMC announced its interest in acquiring Trinity last October. Although UPMC operates other hospitals and outpatient facilities outside of Pennsylvania — in Maryland, New York, West Virginia, and abroad — the move would be UPMC’s first foray into Ohio.

Trinity Health’s hospitals include Trinity Center West, a 200-bed hospital in Steubenville; Trinity Hospital Twin City, a 25-bed hospital in Dennison, Ohio; and St. Clairsville Neighborhood Hospital, a 10-bed micro-hospital that opened late last summer.

CommonSpirit has been selling hospitals to shore up its financial performance and focus on core markets. Currently, the Catholic health system operates more than 2,200 care sites, including nearly 137 hospitals, across 24 states.

UPMC operates more than 40 hospitals and over 800 outpatient sites.

Financial terms of the agreement were not disclosed. The health systems anticipate completing the transaction this fall if regulatory clearance is obtained and other closing conditions are satisfied.

The other major health system transaction involves combining two nonprofit health systems in North Carolina — Charlotte-based Atrium Health, the largest health provider in the state and part of Advocate Health, and Raleigh-based WakeMed Health & Hospitals.

As part of the announced deal, Atrium Health would invest $2 billion in Wake County to create more than 3,300 new healthcare jobs, expand services across the state (including virtual care), and develop North Carolina’s largest nonprofit behavioral health network.  

In North Carolina, Atrium Health consists of the Atrium Health Carolinas Medical Center in Charlotte, 11 hospitals, and more than 900 care locations. The health system also operates hospitals and care locations in South Carolina, Georgia, and Alabama.

WakeMed Health & Hospitals comprises three full-service hospitals, a mental health and well-being hospital, eight emergency departments, a Children’s Hospital and Rehabilitation Hospital, two trauma centers, and a network of more than 900 providers.

The proposed combining of the two health systems requires a vote by the Wake County Board of Commissioners on amending a 1997 transfer agreement between WakeMed and the county, as well as changes to WakeMed’s articles of incorporation. The transfer agreement stipulates that WakeMed must maintain or improve the level of services it provides to residents, including indigent and community healthcare; otherwise, control of the hospital specified in the agreement reverts to the county.

At the urging of state officials, the board postponed the vote to allow time for the health systems to engage with the community and get feedback on the proposed merger.

On Friday, a smaller proposed regional merger was announced between two other nonprofit health systems: Sioux Falls, N.D.-based Sanford Health and North Memorial Health, which is based in Minnesota’s Twin Cities.

Sanford Health’s CEO, Bill Gassen, said the combined health system would invest $600 million to sustain North Memorial’s Robbinsdale Hospital as a critical safety-net provider of Level 1 trauma and emergency services and to expand capacity and outpatient care at North Memorial’s Maple Grove Hospital.

Organizations such as the Minnesota Nurses Association and SEIU Healthcare Minnesota & Iowa, a labor union representing more than 50,000 care workers, expressed doubts about the proposed merger.

“It is especially concerning because previous merger attempts by Sanford Health to come into Minnesota have failed due to their values and corporate behavior,” the union told MPR News. Union members asked the state’s attorney general, Keith Ellison, to provide oversight.

Ellison said his office would review the proposed transaction with the state’s health department to evaluate the impact it would have on patients and healthcare workers, MRP News reported.

OUR TAKE: Regional and rural health systems are looking for ways to strengthen their financial positions as the cost of providing care continues to increase, more patients are uninsured or underinsured due to cuts in Medicaid and the loss of ACA subsidies, and demand grows to invest in technology if they want to remain competitive.

The uncertainty among healthcare leaders that existed after the federal tax legislation was passed last summer has abated to some extent, Anu Singh, managing director at Kaufman Hall told Chief Healthcare Executive in February.

“There was a period of time when momentum [in merger activity] was suspended so we could go through [the tax bill], and now we’re back on the trajectory we were before,” Singh said.

“I think overall, across all channels, we’re going to see increased levels of M&A,” he added. “Going forward, the momentum is going to continue and probably increase, and that’s because hospitals themselves, right now, have determinations about their future going forward.”

Not everyone agreed, however.

Chief Healthcare Executive reported that Kevin Holloran, section leader of the nonprofit healthcare group at Fitch Ratings, said earlier this year that plenty of people were expecting hospital merger activity to “shoot through the roof,” but he wasn’t one of them.

“I think you’re going to see a lot of talk about M&A, but I don’t think you’re going to see a whole lot of activity, just over the near term,” Holloran said.  

Holloran pointed out, however, that some of the larger health systems are doing as CommonSpirit has, taking steps to divest hospitals in areas where they aren’t the market leaders.

“You’re starting to see those organizations … do complete exits from markets where they don’t have that essentiality, that density,” he said.

According to Kaufman Hall, there were just 46 mergers and acquisitions among hospitals in 2025 — a decrease from 72 a year earlier and the lowest number of hospital-related M&A transactions in 15 years. Activity picked up in the fourth quarter, when 17 of the deals were announced.

Moreover, 43% of the mergers and acquisitions among hospitals in 2025 involved an organization in financial distress, the Kaufman Hall report indicated.

“I think what we’re seeing is more distress in the industry as a whole, with a consistent number of transactions,” Singh told Chief Healthcare Executive in February.

But Kaufman Hall released new numbers in April, and there were 22 announced M&A deals among hospitals in the first quarter, reflecting the highest amount of first-quarter activity since 2020.

One of those deals was the announcement in March that Minnesota-based Allina Health planned to become part of California’s Sutter Health.

Expect to see more of these transregional mergers as larger health systems opt for synergistic partnerships with smaller but financially viable health systems.

What else you need to know

Roche signed a definitive agreement to acquire PathAI, a digital pathology company based in Boston, in a deal that could be worth more than $1 billion. Digital pathology makes it possible to create high-resolution digital images from patients’ tissue samples on slides, Roche explained in the news release announcing the acquisition. With access to these digital images, pathologists can use AI tools to facilitate diagnostic workflows and reduce the time needed to provide results.

Roche and PathAI established a partnership in 2021 and subsequently expanded it to include the development of AI-enabled companion diagnostic algorithms, Roche noted. If the acquisition is completed later this year as anticipated, PathAI will become part of Roche’s diagnostics division.

Given that PathAI also has solutions for clinical trial support and translational research, the Swiss drugmaker said the acquisition would help accelerate clinical therapy development and promote the discovery of new biomarkers, potential drug targets, and novel diagnostic tools.

Digital pathology has the potential to improve precision diagnosis of cancer and enable physicians to offer better tailored treatment regimens,” said Matt Sause, CEO of Roche Diagnostics. “Bringing PathAI into Roche Diagnostics will allow us to combine their first-in-class digital pathology tools with our leading oncology diagnosis platforms to deliver better insights for physicians and potentially better outcomes for patients worldwide.”

Under the agreement, Roche will pay $750 million up front and milestone payments of up to $300 million. The transaction is subject to customary closing conditions, including regulatory approval.

Belgian biopharma company UCB agreed to pay $2 billion up front to acquire Candid Therapeutics, a privately held clinical-stage biotech firm based in San Diego that focuses on treatments for autoimmune and inflammatory diseases through novel T-cell engagers. The acquisition could include another $200 million in milestone payments.

Candid’s lead investigational therapy, cizutamig, is a potential best-in-class bispecific antibody directed to B-cell maturation antigen (BCMA) on plasma cells and CD3 on T-cells. Designed to maintain cytotoxicity while limiting cytokine release, the drug has been evaluated in multiple myeloma and autoimmune diseases and is being assessed in Phase I trials in more than 10 autoimmune indications, Roche said in the announcement.

The acquisition is subject to the usual closing conditions and is expected to close within the next few months.  

Bayer will acquire San Francisco-based Perfuse Therapeutics, a biopharma company that develops treatments for ischemia-induced ocular diseases. The transaction could be valued as high as $2.45 billion, with $300 million of that total being paid up front and the remainder as potential milestone payments. The deal is subject to approval by Perfuse’s shareholders and regulatory officials.

Perfuse’s lead asset, PER-001, is a small molecule endothelin receptor agonist in Phase II development as a treatment for glaucoma and diabetic retinopathy. The companies noted in a press release that PER-001 represents one of the first treatments for these diseases being evaluated for its ability to improve the visual field for patient with glaucoma and to improve contrast sensitivity and reduce ischemia in patients with diabetic retinopathy.

Acquiring Perfuse gives Bayer a potential successor to Regeneron Pharmaceuticals’ Eylea (aflibercept), an anti-VEGF drug Bayer markets in Europe as a treatment for various retinal diseases. Eylea is losing patent exclusivity, and biosimilars are expected to erode sales of the product at a higher rate starting this year.

Pennsylvania is suing Character.AI, an artificial intelligence platform. The lawsuit alleges the company’s AI companion bots have claimed to be licensed medical professionals — for instance, a chatbot called Emilie professed to be a psychiatrist, going so far as to offer a false state license number, according to a press release issued by Gov. Josh Shapiro’s office. The Pennsylvania Department of State is seeking a preliminary injunction to stop Character.AI from “misrepresenting its AI companion bots as licensed medical professionals who can provide medical advice.” A spokesperson for Character.AI told news outlets the company does not comment on pending litigation but said the company has “taken robust steps” to make it clear that characters on its site are fictitious and that users should not rely on characters for any type of professional advice.

Hartford HealthCare and CVS are partnering to offer in-network adult primary care at Connecticut’s 20 MinuteClinic locations for members of insurance plans the health system accepts. Jeffrey Flaks, CEO of Hartford HealthCare, said in a press statement the collaborative effort would “greatly expand access statewide by allowing for more convenient entry points, more flexible hours, and a simpler way to connect to ongoing and coordinated care. … This partnership is an important step forward in helping us improve access, deliver better outcomes, and make care more affordable for communities.”

DC developments

FDA officials prevented publication of studies demonstrating the safety of COVID-19 and shingles vaccines, The New York Times and STAT News reported. FDA scientists who conducted two studies examining COVID-19 vaccines used in 2023 and 2024 were told in October to withdraw the studies after they had been accepted for publication in medical journals. In February, FDA officials chose not to approve the submission of abstracts on a shingles vaccine to a drug safety conference, according to the Times.

Working with data firms to analyze millions of patient records, scientists at the FDA who conducted the studies found serious vaccine-related side effects to be very rare. Dr. Vinay Prasad, who led the Center for Biologics Evaluation and Research, the FDA’s vaccine division, at the time, has since left the agency.

HHS spokesman Andrew Nixon said the COVID-19 vaccine studies were withdrawn from publication “because the authors drew broad conclusions that were not supported by the underlying data.” He added, “The FDA acted to protect the integrity of its scientific process and ensure that any work associated with the agency meets its high standards.” With respect to one of the shingles vaccine studies, which demonstrated the vaccine’s effectiveness, Nixon said the study’s design “fell outside the agency’s purview.”

More recently, Dr. Jay Bhattacharya, who is serving as the acting director of the Centers for Disease Control and Prevention, nixed the publication of a report that found the COVID-19 vaccine significantly reduced the risk of hospitalization and visits to the emergency department last winter, citing alleged limitations with the study.

Since taking office, Health Secretary Robert Kennedy Jr., a long-time critic of vaccines, has sought to cast doubt on the safety and effectiveness of vaccines in general. The administration has also slashed funding for research into vaccine development.  

What else you need to know

Industry Voices—Value-based care won the policy argument. Now it has to deliver. Fierce Healthcare, 5.1.26

Most Favored Nation Drug Pricing: Anchoring To A Moving Target. Health Affairs, 5.6.26

Ushering in the next era of frontline nursing with AI. McKinsey & Co., 5.5.26

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