Pace of health-sector IPO action finally slows, but deal sizes grow, proving lots of cash still parked on the sidelines.

jarmoluk / Pixabay

Three tech companies in the health sector entered the public market last week, raising a total of $601 million. Here are the proud IPOs and a glance at this week’s expected newcomer.

Castle Biosciences Inc., which sells genetic tests used to diagnose skin cancers, raised $64 million by offering 4.0 million shares at $16, the high end of the range of $14 to $16. The company sold an additional 0.67 million shares on the offering. Insiders had indicated on purchasing $15 million of the IPO. At the $16 offer price, the company commands a fully diluted market cap of $288 million.

The Friendswood, TX-based skin cancer-focused company provides doctors and patients with personalized clinically actionable genomic information to support more precise treatment decisions. Its non-invasive products use proprietary algorithms to assess a patient’s specific risk of metastasis or recurrence of their cancer, enabling physicians to identify those who may benefit from more aggressive care and those who do not need certain medical and surgical interventions.

Castle Biosciences was founded in 2007 and booked $28 million in sales for the 12 months ended March 31, 2019. It lists on the Nasdaq under the symbol “CSTL.” SVB Leerink and Baird acted as lead managers on the deal. Shares closed the week up 44% at $22.99.

Elsewhere, Livongo Health Inc., which provides a chronic condition management platform to self-insured employers, raised $355 million by offering 12.7 million shares at $28, above the upwardly revised range of $24 to $26. Existing shareholder Kinnevik AB had indicated on purchasing up to $20 million of the IPO.

Mountain View, CA-based Livongo develops solutions for patients with chronic diseases that leverage technology and data science. It began with a focus on diabetes, but now has offerings for hypertension, prediabetes and weight management and behavioral health. Its diabetes solution includes a cellular-connected interactive blood glucose meter, an unlimited supply of test strips, personalized Health Nudges to support behavioral change, various digital tools and coaching/monitoring services.

Livongo was founded in 2008 and booked $88 million in sales for the 12 months ended March 31, 2019. It lists on the Nasdaq under the symbol “LVGO.” Morgan Stanley, Goldman Sachs and J.P. Morgan acted as lead bookrunners on the deal. Shares closed the week up 36% to $38.12.

And Health Catalyst Inc., which provides a data analytics platform and services to healthcare organizations, raised $182 million by offering 7 million shares at $26, above the range of $24 to $25. The Salt Lake City, UT-based company plans to raise $129 million by offering 6 million shares at a price range of $20 to $23.

More than 500 hospitals and an estimated 5,000 clinics use the Salt Lake City, UT-based company’s software, which extracts data from patient medical and genetic records, lab results, billing systems and customer surveys for analysis, the WSJ reports. The company presents the health information in a user-friendly format, and Health Catalyst developers collect data from various hospitals to establish algorithms that can assist hospitals in identifying inefficiencies or enhance medical care.

Health Catalyst was founded in 2008 and booked $127 million in sales for the 12 months ended March 31, 2019. It lists on the Nasdaq under the symbol “HCAT.” Goldman Sachs, J.P. Morgan, William Blair, Piper Jaffray, Evercore ISI and SVB Leerink acted as lead managers on the deal. Shares closed the week up 47% at $38.30.

———-

Among issues expected to price this week, RAPT Therapeutics Inc. is developing therapies for difficult-to-treat cancers and inflammatory diseases. The South San Francisco-based company, backed by The Column Group and Kleiner Perkins, hopes to raise $75 million by offering 5 million shares at between $14 to $16 per share. It plans to list on the Nasdaq under the symbol “RAPT.”  Underwriters will be led by BOA Merrill Lynch and Wells Fargo.

Print Friendly, PDF & Email