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Neoforma kills Eclipsys merger, sells shares to Novation owners

    Neoforma.com (Nasdaq: NEOF) couldn't have had a busier day than Thursday.

    The provider of an online marketplace, auction and content for buying health care supplies dissolved a previously announced merger with Eclipsys (Nasdaq: ECLP), restructured an agreement with Novation, and reorganized its own company.

    Shares of Neoforma.com fell 1 7/16 to 9 1/2 in Thursday's regular trading.

    The company originally planned to buy Eclipsys and its Healthvision affiliate with stock worth a total of $2.1 billion when the deal was announced in March. Since then, Neoforma shares have fallen 70 percent.

    On Thursday morning, Neoforma.com said it would abandon the acquisitions and replace them with marketing and distribution deals. The company last week was considering the move.

    Neoforma.com also changed its 10-year contract with Novation, which handles more than 30 percent of the B2B procurement market in health care, according to estimates. Novation's parents, healthcare alliances VHA and University HealthSystem Consortium, will own a combined 45 percent of Neoforma.com under the new deal.

    VHA and UHC also get warrants that would let them buy millions in additional Neoforma.com shares, with the actual amount depending on how many members of their respective groups use Neoforma.com. VHA also gets to appoint two of seven board members.

    After market close Thursday, Neoforma.com announced a related reorganization that includes 80 job cuts. The move is designed to help the company focus on health care delivery networks and doctors' offices.>