HealthPartners, Essentia Health agree to combine amid persistent increase in health system M&A activity

Heading into the final quarter of 2026, the uptick in health system merger-and-acquisition activity that began in the first quarter continues.  

The largest transaction reported recently is between two Minnesota nonprofit health systems: HealthPartners, based in Bloomington, and Essentia Health, based in Duluth. They announced on Wednesday that their boards of directors had approved an affiliation agreement for the organizations to combine.

The resulting health system would operate under the HealthPartners name and would have 22 hospitals, along with more than 135 clinics and 6,000 clinicians. HealthPartners’ current president and CEO, Andrea Walsh, would lead the combined organization. Dr. David Herman, Essentia Health’s CEO, would serve as president of combined clinical care group operations.

Currently, HealthPartners serves patients in Minnesota and Wisconsin, as well as   health plan members in five states, while Essentia operates hospitals and clinics in Minnesota, North Dakota, and Wisconsin.

If the necessary regulatory approvals are obtained, the health systems anticipate that the combination will be effective Jan. 1. Specific financial terms were not disclosed, but Becker’s Hospital Review reported that “no money is changing hands.”

In separate news, University of Pittsburgh Medical Center (UPMC) finalized a transaction with Chicago-based CommonSpirit that transferred ownership of Trinity Health System, which is based in Steubenville, Ohio, to UPMC on Oct. 1. The deal was announced in

Trinity Health’s hospitals include Trinity West and Trinity East in Steubenville, Trinity Twin City Medical Center in Dennison, and Trinity St. Clairsville Neighborhood Hospital, a 10-bed micro-hospital that opened last year.

UPMC announced its plans to acquire Trinity a year ago and signed a definitive agreement with CommonSpirit in May to transfer ownership of Trinity to UPMC.

Although financial terms were not disclosed, Fierce Healthcare reported that documents filed with the attorney general’s office in Ohio indicate UPMC paid $120 million for Trinity.

Meanwhile, Florida State University and Tallahassee Memorial HealthCare finalized core agreements to establish a long-term framework for FSU Health, the university’s integrated academic health system.

Along with Tallahassee Memorial Hospital, the agreements include a planned FSU Health hospital in Panama City Beach, Fla.

In other news, Penn Medicine entered into a strategic partnership with Independence Blue Cross and Nashville, Tenn.-based Regent Surgical to launch a new company that will support the creation of at least 18 ambulatory surgery centers in Penn Medicine’s service area, which includes Pennsylvania, New Jersey, and Delaware.

“Together, we have an opportunity to create a model that expands access, lowers costs, and preserves hospital resources for the patients who need them most,” said Travis Messina, Regent’s CEO, in a press release.  

And in yet another deal, Greenville, S.C.-based Prisma Health agreed to acquire 36 urgent care centers from Novant Health, which is based in Winston-Salem, N.C.

The urgent care centers, all located in South Carolina, previously operated under the name Doctor’s Care. They will be rebranded as Prisma Health Urgent Care when the transaction closes, which is expected to happen on Nov. 1.

When the deal is finalized, patients will have access to Prisma Health’s primary, specialty, and hospital-based services in addition to the walk-in and virtual care services already offered at the urgent care centers.

Our Take: Minnesota has seen more than its fair share of health system M&A activity lately. The news of HealthPartners and Essentia Health’s intent to combine marks the third significant announcement in the state in a six-month period.

Just last month, Sioux Falls, S.D.-based Sanford Health gained entry into the Twin Cities region when it finalized a partnership with Robbinsdale, Minn.-based North Memorial Health. The two organizations now operate as a combined 22-hospital system.

In March, Sacramento, Calif.-based Sutter Health announced a proposed merger with Allina Health, which would also give Sutter access to the Twin Cities market. If that deal is completed by the end of this year, as anticipated, the result would be a combined, integrated nonprofit health system with 39 hospitals.

Essentia Health has previously entered into proposals that didn’t pan out.

For instance, Essentia signed an integration agreement in July 2023 with Marshfield (Wis.) Clinic Health System to form a 25-hospital regional health system serving rural and mid-urban communities in Michigan, Minnesota, North Dakota, and Wisconsin — but that deal fell apart by early 2024. Marshfield Clinic Health System merged with Sanford Health at the start of 2025.

Early in 2025, Essentia was involved in negotiations with the University of Minnesota to create a $1 billion “all-Minnesota health solution,” potentially including Fairview Health Services in the arrangement, but those discussions were also unsuccessful.

Fairview Health considered merging with Sanford Health back in 2022 but called off that proposed transaction in 2023. The University of Minnesota, however, finalized a 10-year agreement with Fairview Health and M Physicians in June. That agreement is set to go into effect at the start of 2027.

Maybe Essentia will fare better in its negotiations with HealthPartners, though local labor unions and other organizations are already calling upon the state’s attorney general’s office to conduct a thorough and transparent review of the proposed transaction.

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What else you need to know

AstraZeneca agreed to make a $2 billion equity investment in Summit Therapeutics, a Miami-based biopharma that focuses on discovering and developing cancer therapies. A clinical collaboration between the two companies centers on ivonescimab, a potential first-in-class PD-1/VEGF bispecific antibody licensed by Summit, and sonesitatug vedotin (sone-ve), an antibody-drug conjugate licensed by AstraZeneca.

Under the clinical collaboration agreement, the companies intend to start studies evaluating the two investigational therapies as a combination treatment for gastrointestinal tumors, according to Summit’s press release. The companies also executed a nonbinding memorandum of understanding that could lead to additional clinical trials to assess ivonescimab in combination with other cancer therapies and ADCs in AstraZeneca’s portfolio.

Under the share purchase agreement, AstraZeneca will buy approximately 109,000 shares of convertible preferred stock, resulting in an ownership stake in Summit of about 12%.

Separately, Merck signed a licensing agreement with SciBrunch Therapeutics, a biotech firm based in Shanghai, for an investigational preclinical oral KRAS G12D (ON) inhibitor known as SPR2015. Potential milestone payments and an upfront payment of $400 million could make the total value of the transaction as high as $2.13 billion.

The deal gives Merck exclusive global rights to develop and commercialize SPR2015. George Addona, a senior executive at Merck Research Laboratories, described SPR2015 in a press statement as “a potent engineered inhibitor for one of the most prevalent mutant forms of KRAS found in human cancers.”

In another deal, Eli Lilly entered into strategic research collaboration and license agreement with InnoCare Pharma, a biopharma based in Beijing that focuses on treatments for cancers and autoimmune diseases.

Under the agreement, InnoCare is eligible to receive upfront and near-term payments valued at up to $100 million, as well as approximately $3.25 billion in milestone payments. InnoCare said in a news release that it would use its proprietary platform to discover and advance compounds against as many as five targets to address unmet critical needs. Additional details were not provided.

The FDA approved Eli Lilly’s once-weekly basal insulin, Onswik (insulin efsitora alfa-gobe), to improve glycemic control in adults with type 2 diabetes. Onswik will compete with Novo’s Awiqli, which was approved in March. Lilly said in its announcement of the approval that it plans to launch the Onswik KwikPen in the U.S. in the coming months. Novo launched Awiqli in August.

AbbVie’s Juvmo (tavapadon) has been approved for Parkinson’s disease. The oral drug is the first selective D1/D5 receptor agonist to gain the FDA’s approval for this indication and is “the first dopaminergic breakthrough for Parkinson’s disease in decades,” Dr. Roopal Thakkar, AbbVie’s chief scientific officer, said in a press release. Juvmo is administered once daily, with or without levodopa therapy. The company expects Juvmo to be available to patients in the U.S. this month. AbbVie added tavapadon to its pipeline in 2024 when it finalized the $8.7 billion acquisition of Cerevel.

Executive moves

Robert Hunter has been named president of UnitedHealthcare. Hunter has held various roles in the 15 years he’s been with the company, the most recent of which was CEO of government programs. In a LinkedIn post announcing his new leadership position, Hunter said he will focus on helping to accelerate the company’s modernization agenda. Tim Noel will continue to serve as CEO of UnitedHealthcare.

Dr. Robert Callender will retire as president and CEO of Memorial Hermann Health System at the end of the year. Dr. Callender has served in the role since 2019. The Houston-based health system’s chief financial officer, Alec King, will succeed Dr. Callender, effective Jan. 1, 2027, according to the announcement.

Robert Garrett plans to retire as CEO of Hackensack Meridian Health on June 30, 2027. Garrett’s career started at Hackensack University Medical Center 45 years ago. In 2009, he became president and CEO of Hackensack University Health Network. After the health system merged with Meridian Health in 2016, forming Hackensack Meridian Health, Garrett served as co-CEO until he became the sole CEO in 2019. The health system’s board of trustees stated in a news release that it will conduct a national search for Garrett’s successor.

What we’re reading

Can pancreatic cancer be stopped in its tracks? Radical tactic raises hopes. Nature, 10.1.26

‘Zombified’ C.D.C., Hobbled by Cuts, Struggles to Fulfill Scientific Mission. NY Times, 9.26.26 (subscription or registration required)

Equitable Access to GLP-1 Receptor Agonists—Essential but Not Accessible. JAMA, 10.1.26 (subscription or registration required)