Phytel’s Rapid Growth Attracts $14.2 Million from Strategic Investment Partners

DALLAS -- (BUSINESS WIRE) -- Phytel, the leader in empowering physicians to drive better patient outcomes through technology, announced today that it experienced exceptional year-to-year growth in 2009. Phytel’s solid business model and approach to improving healthcare delivery recently attracted $14.2 million in funding from investors, including Polaris Venture Partners, Caris, Ltd. and LAH Investments, LP. The investment will be used, in part, to advance product development initiatives that will expand Phytel’s market share and help the company support the efforts of physicians across the country to improve patient care.

Explaining the company’s stellar results, Steve Schelhammer, CEO of Phytel, said, “Phytel increases the engagement of patients in their care through the use of automated coordinated-care tools and services that extend the reach of the physician beyond the office. The increased compliance of patients with their care plans results in improved outcomes and higher profitability for physician practices. The rapidly rising demand for Phytel’s services reflects the new emphasis that healthcare organizations are placing on care coordination and the reporting of quality data.”

Currently, Phytel’s Proactive Patient Outreach solution – which enables physicians to ensure that more of their patients receive recommended preventive and chronic disease care – is being used across the country by more than 100 leading physician groups serving over 15 million patients. More and more physician organizations are seeing the value of a technology-driven population management approach that uses evidence-based, nationally recognized protocols to bring patients in for the services they need to stay healthy or to keep their chronic conditions under control.

David Barrett, a general partner of Polaris Venture Partners, commented, “Phytel’s combination of visionary leadership and superb timing has made its offering a winner in today’s healthcare marketplace. The company’s web-based service helps doctors better manage their patients, and, as importantly, Phytel has proven its ability to help grow practice revenues through increased bookings. As investors, we see Phytel’s value proposition as compelling. We share the company’s excitement for its new and future products, and believe that healthcare reform initiatives will increase the demand for Phytel’s services even further.”

Jon Halbert, chairman of the board of Phytel, said, “Phytel’s superior product and its proven business model offer strong reasons to invest in the company, and we welcome participation by Polaris, Caris, and LAH. Phytel is uniquely positioned to benefit from widespread efforts to help physicians provide better, more timely care to their patients.”

About Phytel

Phytel is the premier company empowering physician-led health improvement. Phytel provides physicians with proven technology to deliver timely, coordinated care to their patients. Phytel’s state-of-the-art registry uses evidence-based chronic and preventive care protocols to identify and notify patients due for service, while tracking compliance and measuring quality and financial results. For more information, please visit www.phytel.com.

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About Polaris Venture Partners

Founded in 1996, Polaris Venture Partners is a partnership of experienced investors, operating executives and entrepreneurs. The firm's mission is to identify, invest in and partner with seed, early stage, and middle market businesses with exceptional promise and help them grow into market-leading companies. Polaris invests in businesses across a number of markets including software, digital media, consumer, EnerTech and life sciences. Based in Boston and with offices in San Francisco and Seattle, the firm has over $3 billion under management and current investments in more than 115 companies. Selected current and past investments include: Accordant Health Services, Adnexus Therapeutics, Akamai, Allaire, Alnylam Pharmaceuticals, Athenix, e-Rewards, GlycoFi, LegalZoom, LogMeIn, Momenta Pharmaceuticals, Sirtris Pharmaceuticals, and Quantcast. For more information, please visit www.polarisventures.com.

About Caris, Ltd.

Caris, Ltd. is a privately held investment partnership with over $350 million of assets initially under management. Caris invests in health care, energy, retail and financial services companies. Its founder is David D. Halbert, who was formerly chairman and CEO of AdvancePCS, a leading pharmacy benefit manager that merged with Caremark Rx in 2004. For more information, please visit www.carisltd.com.