Health-tech is hot, and two more fast-growing but unprofitable IPOs are on deck for the week ahead. They’re joined by one of the the world’s largest hosts of marathons and triathlons (including the Ironman brand), along with a solar installation company, a specialty insurer, and a cancer diagnostics seller.
Backed by General Catalyst, diabetes management platform Livongo Health (LVGO) is the deal to watch, expected to raise $230 million at a market cap of $2.4 billion. That’s a large market cap for a company with only $88 million in sales, though it targets a massive market, and revenue spiked 157% in the 1Q19 to $32 million. Sequoia-backed healthcare analytics company Health Catalyst (HCAT) expects to raise $129 million at a market cap of $826 million. It grew sales at a 71% clip in the 1Q19, with a 51% gross margin.
Those two could see interest based on the performance of technology IPOs this year, along with the more than 35% gain from this past week’s health-tech provider Phreesia (PHR).
| U.S. IPO CALENDAR | |||
|---|---|---|---|
| ISSUER BUSINESS | DEAL SIZE MARKET CAP | PRICE RANGE SHARES FILED | TOP BOOKRUNNERS |
| Castle Biosciences (CSTL) Friendswood, TX | $50M $259M | $14 – $16 3,333,334 | Leerink Baird |
| Sells genetic tests used to diagnose skin cancers. | |||
| Health Catalyst (HCAT) Salt Lake City, UT | $129M $826M | $20 – $23 6,000,000 | Goldman JP Morgan |
| Provides a data analytics platform and services to healthcare organizations. | |||
| Livongo Health (LVGO) Mountain View, CA | $230M $2,366M | $20 – $23 10,700,000 | Morgan Stanley Goldman |
| Provides a unified healthcare platform for chronic illness management. | |||
The following IPOs are expected to price this week:
Castle Biosciences (CSTL), which sells genetic tests used to diagnose skin cancers, plans to raise $50 million by offering 3.3 million shares at a price range of $14.00 to $16.00. At the midpoint of the proposed range, Castle Biosciences would command a market value of $259 million. Castle Biosciences, which was founded in 2007, booked $28 million in sales over the last 12 months. The Friendswood, TX-based company plans to list on the Nasdaq under the symbol CSTL. SVB Leerink and Baird are the joint bookrunners on the deal. Insiders intend to purchase up to $15 million of the IPO (30% of the deal).
Health Catalyst (HCAT), which provides a data analytics platform and services to healthcare organizations, plans to raise $129 million by offering 6.0 million shares at a price range of $20.00 to $23.00. At the midpoint of the proposed range, Health Catalyst would command a market value of $826 million. Health Catalyst, which was founded in 2008, booked $127 million in sales over the last 12 months. The Salt Lake City, UT-based company plans to list on the Nasdaq under the symbol HCAT. Goldman Sachs, J.P. Morgan, William Blair and Piper Jaffray are the joint bookrunners on the deal.
Livongo Health (LVGO), which provides a unified healthcare platform for chronic illness management, plans to raise $230 million by offering 10.7 million shares at a price range of $20.00 to $23.00. At the midpoint of the proposed range, Livongo Health would command a market value of $2.4 billion. Livongo Health, which was founded in 2008, booked $88 million in sales over the last 12 months. The Mountain View, CA-based company plans to list on the Nasdaq under the symbol LVGO. Morgan Stanley, Goldman Sachs and J.P. Morgan are the joint bookrunners on the deal. Insider Kinnevik AB intends to purchase up to $20 million of the IPO (9% of the deal).
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