AI company that got first-of-its-kind FDA device approval makes acquisition

Artificial-intelligence diagnostics company Digital Diagnostics said Tuesday it has purchased 3Derm Systems, a move to expand its technology to detect more illnesses.

Digital Diagnostics, formerly known as IDx, scored Food and Drug Administration approval for its medical device that uses AI to detect diabetic retinopathy without input from a doctor. It's the first such device with that approval. Now, the company hopes to develop 3Derm's AI system, which detect skin cancer.

That was a vision behind the company's rebrand as Digital Diagnostics, as it plans to continue to expand into medical specialties beyond its initial focus on eye care.

As part of the acquisition, Digital Diagnostics will take on 3Derm's employees, according to Dr. Michael Abramoff, founder and executive chairman of Digital Diagnostics.

Liz Asai, 3Derm's chief executive officer and co-founder, will join Digital Diagnostics as vice president of dermatology. Elliot Swart, 3Derm's chief technology officer and co-founder, will join the company as chief architect.

"We are thrilled to continue our work as part of a larger organization focused on doing AI the right way, and that offers a broad commercial platform," Asai said in a statement.