Months after the first rumors began to swirl, chronic disease management startup Livongo Health has officially filed for an IPO on the Nasdaq Global Select Market.
The company has not yet determined a price range or the number of shares going on offer. Morgan Stanley & Co., Goldman Sachs & Co. and JP Morgan Securities will serve as the lead book runners.
Sources close to Livongo told MobiHealthNews that the company is eying September for their listing. A representative from Livongo declined to comment on the company’s plans in this regard when asked.
WHY IT MATTERS
The digital health industry had been in a bit of an IPO lull until whispers of Livongo’s plans began to take shape in March. However, the startup has gained some compatriots in the time since, with both connected bike maker Peloton and patient check-in innovator Phreesia both announcing their own plans to go public as well.
Still, Livongo’s debut has the potential to make a splash, with early reports suggesting that the company was eying a valuation of more than $1 billion.
What’s more, the accompanying S-1 filing offers an up-to-date look into the scale and anticipated growth of the startup’s current business.
According to the document, Livongo’s revenue for the three months ending on March 31, 2019 dwarfed that of those same months in the year prior ($32.1 million versus $12.5 million), while its net loss also increased from $4.2 million to $15 million for those same quarters. As of March 31, the company reports 679 clients and more than 164,000 enrolled in its Livongo for Diabetes program, as well as an accumulated deficit of $128.6 million.
“Our initial solution is focused on, and the vast majority of our historical sales have come from, the management of diabetes, one of the fastest-growing chronic conditions in the world,” the company wrote in the S-1 filing.
“Based on our estimates of the percentage of people receiving healthcare coverage from their employer, the prevalence of diabetes within this subgroup, and our average solution costs, we believe the immediately addressable market size for employees of self- and fully-insured employers with diabetes in the United States is approximately $12.3 billion. Over the longer term we see an additional $15.9 billion opportunity for adults with diabetes receiving healthcare coverage from Medicare or Medicaid. These estimates assume that the prevalence of diabetes between fully-insured and self-insured employer populations is the same.”
THE LARGER TREND
Planning for an upcoming IPO is likely to command the focus of any startup, but the rest of Livongo’s business hardly seems to have slowed down. Just a few days ago the digital health startup announced two-way integrations for many of the leading consumer smartwatches, and in April released one of the first HIPAA-friendly consumer health apps for Amazon Alexa. Further, the Livongo purchased behavioral health app MyStrength for more than $10 million at the beginning of the year and just a few months later unveiled behavioral health tools designed specifically for new and expecting parents.
