Giving Healthcare a Checkup

I know, I know: another healthcare post.

Look, we’d love to write about something else, but we gotta call it like we see it, and for the past 13 and a half months, we’ve been seeing a whole lot of stethoscopes. Healthcare continues to set pole position in the IPO market. After 2014’s historic run of 103 new issuances and four posts on the Ipreo Blog, the sector continues its torrid pace.

Already in 2015, 11 healthcare IPOs have priced, with five of them coming this week (two have already priced, another three are expected before EOD). That’s more than half of the 19 total IPOs that have hit the market in the first month and a half of this young year. It’s not all low cholesterol and strong heartbeats though, as the deal size continues to trend small, with the average Healthcare raising a modest $129.0M. Furthermore, Healthcare’s combined proceeds of $1.4B accounts for only 36% of 2015’s total IPO proceeds of $3.9B. healthcare, valentine's day, inovalon, IPO, Ipreo, market intelligence, new issuance, finance, equity, capital markets

Joining the fray this week was cloud-based Healthcare analytics firm Inovalon Holdings ($600.0M), which currently stands as the year’s second largest debut on a proceeds basis (#1 Columbia Pipeline Partners, $1.2B). Inovalon’s premiere marks only the 7th market entrance from the Healthcare Information Technology space since 2012, in spite of booming volume elsewhere in the sector during that timeframe.

While Healthcare IT IPOs have traditionally fared well out of the gate, returning an average of 20.4% in their opening sessions, performance has faltered as time has gone on. Inovalon is hoping its cloud-based service model will help it buck that trend. Based on Veeva Systems, the only other one of the eight Healthcare IT IPOs (Inovalon aside) to operate in the cloud space, which boasts the highest offer/1 day (+85.8%) and offer/current (+49.6%) of the group, they may be right.

We’ll be sure to let you know in our next healthcare post, which, at this rate, is a foregone conclusion, one way or another.