Sheba sells ARC innovation arm to Redesign Health in deal valued at tens of millions of dollars
The deal transfers management of ARC’s global network and the rights to establish new hospital innovation centers to the U.S. healthcare venture builder, while Sheba retains its stakes in portfolio companies.
Sheba Medical Center is selling its innovation arm, ARC, to U.S. healthcare venture builder Redesign Health in a deal valued at tens of millions of dollars. The transaction will transfer ARC’s expertise in establishing and managing hospital innovation centers to the combined entity, while ARC will continue operating the innovation center at Sheba and those it runs at other medical centers worldwide. It will also retain its stakes in portfolio companies.
Under the agreement, management of ARC’s global network and the rights to establish additional innovation centers within hospitals will pass to the combined entity. Proceeds from the transaction will go to Sheba, with the state receiving approximately 10% of the total under existing agreements governing intellectual property transactions.
The deal is intended to combine Sheba’s clinical, technological and research capabilities, along with ARC’s experience in developing and implementing healthcare innovation, with Redesign Health’s expertise in building companies, raising investment and expanding into international markets.
Established at Sheba in 2019, ARC was founded on the premise that some of the most significant advances in healthcare can emerge from within the medical system itself. Its model brings together physicians, medical staff, hospital administrators, entrepreneurs, technology companies and investors to identify challenges in healthcare and develop solutions.
ARC currently supports more than 130 startups, including three unicorns, one of which is Aidoc, known for using artificial intelligence to analyze medical imaging. Its portfolio is valued at approximately $6.7 billion, and its companies have raised more than $1.5 billion in capital and recorded eight exits. Among the most notable are the $330 million sale of Belkin Vision, which developed a laser-based treatment for glaucoma, and the $300 million sale of Innovalve, which developed a heart valve that can be implanted using minimally invasive techniques. Companies in ARC’s portfolio employ approximately 4,300 people.
In recent years, ARC has expanded beyond Sheba to build an international network spanning 12 countries, 31 health systems and more than 300 hospitals.
As part of the transaction, Prof. Eyal Zimlichman, president of ARC Global, will become vice chair of Redesign Health. Dr. Stephen Klasko, the former CEO of Jefferson Health, will serve as chair of the board of the combined entity.
Founded in New York in 2018, Redesign Health builds healthcare companies and develops technology solutions for medical systems. Its model combines investment with engineering and product development, artificial intelligence expertise and support for building and scaling businesses. It has also developed a partnership with Cedars-Sinai, the prominent Los Angeles-based medical center.
The deal comes as healthcare systems worldwide face mounting pressure from workforce shortages, rising costs and the need to integrate new technologies, including artificial intelligence, more quickly. Despite substantial investment and growing expectations for AI, many healthcare technologies struggle to move beyond pilot projects and achieve widespread adoption or a measurable impact on hospital operations.
The combined model aims to address that gap by starting with problems identified inside healthcare systems, in collaboration with clinicians, administrators and technologists. Solutions are then developed around hospitals’ needs, turned into companies with viable business models, supported through investment and implementation, and expanded to other healthcare systems once their value has been demonstrated.
